MGT Chapter 14 (control)

balance sheet:

* type of financial control shows the financial picture of a company at a given time

what three elements does a balance sheet include?

-assets -liabilities -stockholders equity

when supervisors monitor behavior they are using ________ control but when they point out and correct improper performance they are using _________ control

-concurrent -feedback

Bureaucratic control comes what three approaches and how are they defined?

-feedforward control -concurrent control -feedback control defined by their timing

balanced scorecard includes what 4 performance measurements?

-financial -customer satisfaction -business process -learning and growth

steps in bureaucratic control process:

1: establish performance standards 2: measure performance 3: compare performance to standards 4: take corrective action as needed

What are the downsides/problems with bureaucratic control? pg-326

1: rigid bureaucratic behavior 2: tactical behavior 3: resistance to control

solvency:

ability to cover long-term obligations

profitability:

ability to generate return on investment

liabilities:

amonts the corporation owes to various creditors

stockholders' equity:

amount accusing to the corporations owners

external audits: pg-319

an evaluation conducted by one organization. financial appraisals by outside accountants.

control:

any process that directs activities of individuals toward achievement or the organizational goals

budgets:

are a formal financial projection

fixed/static budget:

budgeting where resources do not change within timeframe (ex: equipment/buildings)

incremental budgeting:

budgeting where you increase/decrease compared to the last time frame. (aka in increments)

zero-based budgeting:

budgeting where you start from scratch

variabel/flexible budgets:

budgets where cost vary depending on the level of activity or productivity.

Are clan control easy or difficult to implement? pg.333-334

can be difficult because there is no "one best way"

rigid bureaucratic behavior:

can result in rigid, inflexible behavior geared toward doing only what the system requires. (no innovation)

clan control relies on what?

empowerment and individual responsibility

feedforward control in bureaucratic control operation:

it is future oriented - its aim is to prevent problems before they arise. ensure planned activities are and can be carried out properly

tactical behavior as a problem in bureaucratic control:

manipulating information or reporting false performance data. "smooth out numbers" - cover up errors and poor performance "beating the system"

resistance to control as a problem in bureaucratic control:

people resist control systems - sometimes making bureaucratic control difficult

transfer price:

price charged by one unit for a good or service provided to another unit WITHIN the organization

budgeting:

process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences

concurrent control:

process used while plans are being carried out. - includes directing, monitoring, and fine tuning activities as they are performed.

market controls are business unit level:

regulates exchanges between departments and functions

market controls at the individual level:

salaries and etc

feedforward control:

the control process used before operations begin. (including policies, procedures, and rules designed to ensure that planned activities are carried out properly)

feedback control in bureaucratic control operation:

this is once everything is done and complete and performance data has been fathered and analyzed - and the results have been given to someone to make corrections.

Bureaucratic control:

use or rules, regulations, and authority to guide performance.

market controls at corporate level: pg-331

used to regulate independent business units that are profit centers.

market controls:

using economic forces to regulate performance

assets:

values of the various items the cooperation owns

Bureaucratic control occurs before, during, and after operations. (T/F)

TRUE

Clan control:

control based on the norms, values, shared goals, and trust among group members.

Market control:

control based on the use of pricing and economic information to regulate activities within organization

balanced scorescard:

control system combining four sets of performance measures: financial, customer, business process, and learning and growth. **goal is to broden management's horizon beyond short term results***

feedback control:

control that focuses on the use of information about previous results to correct deviations from the acceptable standard.

planning facilitates __________ and control facilitates ____________

control, planning.

What should control systems generally include?

financial and non financial performance targets.

income statement:

financial results (revenue minus expenses) over a period of time.

what does a balance sheet measure?

financial worth

management myopia: Pg-325

focusing on short-term earnings and profits at the expense of longer-term strategic obligations

advances in technology have created powerful concurrent controls how?

gives managers immediate access to data.

liquidity:

how easily can assets be converted into cash?

efficiency:

how productivity is org using its assets

Ratio Analysis:

is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. **using financial ratios**

internal audits: Pg-319

verification of financials and operating information by independent INTERNAL staff. (includes recommendations for improvement.) **asses what the company has done for itself and what it has done for its customers***

Audits:

verifications of financial/operational systems

concurrent control in bureaucratic control operation:

while plans are being carried out. it is the heart of any control system.