MGMT Final Chapter 16

__________ is the last step in the control process.

take corrective action if necessary

control process steps

1. establish standards 2. measure performance 3. compare performance to standards 4. take corrective action, if necessary

two core principles of TQM

1. people orientation - everyone involved with the organization should focus on delivering value to customers 2. Improvement orientation - everyone should work on continuously improving the work process

incremental budgeting

Allocating increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed

fixed budget

Allocation of resources on the basis of a single estimate of costs

Deming management

Ideas proposed by W. Edwards Deming for making organizations more responsive, more democratic, and less wasteful

Kaizen

Is a Japanese philosophy of small continuous improvement that seeks to involve everyone at every level of the organization in the process of identifying opportunities and implementing and testing solutions

lean six sigma

Quality-control approach that focuses on problem solving and performance improvement—speed with excellence—of a well-defined project

ISO 9000 Series

Quality-control procedures companies must install—from purchasing to manufacturing to inventory to shipping—that can be audited by independent quality-control experts, or "registrars,"

ISO 14000 series

Set of quality-control procedure that extends the concept of the ISO 9000 series, identifying standards for environmental performance

Enterprise Resource Planning (ERP)

Software information systems for integrating virtually all aspects of a business

bureaucratic control

The use of rules, regulations, and authority to guide performance

Total Quality Management (TQM)

a comprehensive approach - led by top management and supported throughout the organization - dedicated to continuous quality improvement, training, and customer satisfaction

management by exception

a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards

PDCA cycle

a plan-do-check-act cycle using observed data for continuous improvement of operations

six sigma

a rigorous statistical analysis process that reduces defects in manufacturing and service-related processes

statistical process control

a statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability

balance sheet

a summary of an organizations overall financial worth -- assets and liabilities -- at specific point in time

internal audit

a verification of an organization's financial accounts and statements by the organization's own professional staff

variable budget

allow the allocation of resources to vary in proportion with various levels of activity

decentralized control

an approach to organizational control that is characterized by informal and organic structural arrangements

Ensuring that employees follow instructions fully and completely is the purpose of which one of the following management functions?

control

Which of the following is not a reason why control is needed?

control allows one to maintain authority over employees

The PDCA cycle is part of

demining management

concurrent control

entails collecting performance information in real time

A company that determines the acceptable number of consumer complaints it will expect for the upcoming year has set a statistical target.

false

As part of their strategic control of the organization, the CEO and senior managers at Ford review the daily performance of the company's suppliers to determine which should be kept.

false

Control systems affect each other and thus must remain independent of each other.

false

Management by measurement is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.

false

Productivity is monitoring performance, comparing it with goals, and taking corrective action.

false

feedforward control

focuses on preventing future problems

external audit

formal verification of an organization's financial accounts and statements by outside experts

audits

formal verifications of an organization's financial and operational systems

balanced scorecard

gives top managers a fast but comprehensive view of the organization via four indicators: (1) customer satisfaction, (2) internal processes, (3) innovation and improvement activities, and (4) financial measures

A company that works to create a culture that encourages rank-and-file employees to make suggestions and question the status quo, and also measures employee growth, is developing which perspective of the balanced scorecard?

innovation and learning perspectives

Which of the following is not a characteristic of a successful control system?

it is inflexible

______ focuses on problem solving and performance improvement, or speed with excellence, of a well-defined project.

lean six sigma

operational control

monitoring performance to ensure that operational plans - day-to-day goals - are being implemented and taking corrective action as needed

strategic control

monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed

tactical control

monitoring performance to ensure that tactical plans - those at the divisional or departmental level - are being implemented and taking corrective action as needed

control standard

performance standard or simply standard, is the desired performance level for a given goal

A budget is a formal financial

projection

reduced cycle time

reduction in steps in a work process

Bureaucratic control attempts to elicit employee compliance using strict rules, a rigid hierarchy, well-defined job descriptions, and administrative mechanisms such as budgets, performance appraisals, and compensation schemes.

true

In recent years, productivity has been declining globally.

true

The income statement summarizes an organization's financial results, its revenues and expenses, over a specified period of time such as a quarter or a year.

true

The simplest definition of productivity is outputs divided by inputs.

true

outsourcing

using suppliers outside the company to provide goods and services

strategy map

visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization

supply chain

the sequence of suppliers that contribute to creating and delivering a product, from raw materials to production to final buyers