Test 5

Centralized control is also called ______ structural control. ______ structural control utilizes extensive employee and team participation with more reliance on group norms. - Which of the two above is more formal? -Which is more organic?

- Bureaucratic - Decentralized * Bureaucratic * Decentralized

Most organizations define areas of control in terms of the four basic types of resources used. Define each

-Physical: Control of physical resources includes inventory management (stocking neither too few nor too many units in its inventory), quality control (maintaining appropriate levels of output quality), and equipment control (supplying the necessary facilities and machinery) -Human: Control of human resources includes selection and placement, training and development, performance appraisal, and compensation. -Information: Control of information resources includes sales and marketing forecasting environmental analysis, public relations, production scheduling, and economic forecasting. -Financial: Financial control involves managing the organization's financial obligations so that they do not become excessive, ensuring that the firm always has enough cash on hand to meet its obligations but does not have excess cash sitting idly in a checking account, and ensuring that receivables are collected and bills are paid on a timely basis.

What are the four basic purposes of control?

1. Adapt to environmental change 2. Limit the accumulation of error 3. Cope with organizational complexity 4. Minimize costs

What are the levels/units of analysis of productivity?

1. Aggregate productivity is the total level of productivity achieved by a country. 2. Industry productivity is the total productivity achieved by all the firms in a particular industry. 3. Company productivity is an individual company's productivity. 4. Unit productivity is the achievement of a unit or department within an organization. 5. Individual productivity is the productivity level attained by a single person.

What are three examples of organizational technology?

1. Automation is the process of designing work so that it can be completely or almost completely performed by machines. 2. Computer-assisted manufacturing is technology that relies on computers to design or manufacture products. 3. Robotics refers to the science and technology of the construction, maintenance, and use of robots. A robot is any artificial device that is able to perform functions ordinarily thought to be appropriate for human beings.

Explain each of the steps of the control process

1. Establish Standards - A control standard is a target against which subsequent performance will be compared. Standards established for control purposes should be expressed in measurable terms. Control standards should also be consistent with the organization's goals. Control standards can be as narrow or as broad as the level of activity to which they apply and must follow logically from organizational goals and objectives. A final aspect of establishing standards is to identify performance indicators. Performance indicators are measures of performance that provide information that is directly relevant to what is being controlled. 2. Measure performance - Performance measurement is a constant, ongoing activity for most organizations. For control to be effective, performance measures must be valid. Daily, weekly, and monthly sales figures measure sales performance, and production performance may be expressed in terms of unit cost, product quality, or volume produces. Employees' performance is often measured in terms of quality or quantity of output, but for many jobs, measuring performance is not so straightforward. 3. Compare performance against standards - Performance may be higher than, lower than, or identical to the standard. In some cases, comparison is easy. The goal of each product manager at GE is to make the product either number one or number two (on the basis of total sales) in its market. Because this standard is clear and total sales are easy to calculate, it is relatively simple to determine whether this standard has been met. Sometimes, however, comparisons are less clear-cut. If performance is lower than expected, the question is how much deviation from standards to allow before taking remedial action. The timetable for comparing performance to standards depends on a variety of factors, including the importance and complexity of what is being controlled. For longer-run and higher-level standards, annual comparisons may be appropriate. In other circumstances, more frequent comparisons are necessary. 4. Determine need for corrective action - Decisions regarding corrective action draw heavily on a manager's analytic and diagnostic skills. After comparing performance against control standards, one of three actions is appropriate: maintain the status quo (do nothing), correct the deviation, or change the standards. Maintaining the status quo is preferable when performance essentially matches the standards, but it is more likely that some action will be needed to correct a deviation from the standards

Employees resist controls when they do not understand the reasons and managers develop flawed control systems. What are the four reasons for employee resistance?

1. Overcontrol occurs when an organization attempts to control too many things. Employees tend to resist if too many controls are placed on them. 2. If the control system focuses too much on quantitative variables or if the focus is too narrow, problems can occur. 3. Control systems must not reward inefficiency. Cutting departments' budgets the following year if not all of their resources are spent is an example of rewarding inefficiency. 4. Accountability for one's work is increased when control systems are in place and this may promote resistance

What are the eight dimensions of quality?

1. Performance. A product's primary operating characteristic; examples are automobile acceleration and a tv's picture clarity. 2. Features. Supplements to a product's basic functioning characteristics, such as power windows on a car 3. Reliability. A probability of not malfunctioning during a specific period 4. Conformance. The degree to which a product's design and operating characteristics meet established standards. 5. Durability. A measure of product life. 6. Serviceability. The speed and ease of repair 7. Aesthetics. How a product looks, feels, tastes, and smells 8. Perceived quality. As seen by a customer

What is a control standard?

A control standard is a target against which subsequent performance will be compared

Describe how a controller helps managers in H-form and M-form organizational designs.

A controller is responsible for helping line managers with their control activities, for coordinating the organization's overall control system, and for gathering and assimilating relevant information. Many businesses that use an H-form or M-form organization design have several controllers: one for the corporation and one for each division. The job of controller is especially important in organizations where control systems are complex

Who was Malcolm Baldridge?

A former secretary of commerce who championed quality in the U.S. industry. The award, administered by an agency of the Commerce Department, is given annually to firms that achieve major improvements in the quality of their products or services.

Define statistical quality control (SQC)

A set of specific statistical techniques that can be used to monitor quality; it includes acceptance sampling and in-process sampling.

Define service business organization

An organization that transforms resources into an intangible output and creates time or place utility for its customers.

Financial statements are useful control tools. Define each of the two most basic financial statements

Balance sheet- lists the assets and liabilities of an organization at a specific point in time Income statement- Summarizes financial performance over a period of time

_____ are the plans expressed in numerical terms and are the most common means of financial control

Budgets

What are the constraints with which purchasing managers must deal?

Buying too much ties up capital and increases storage costs. Buying too little might lead to shortages and high reordering costs. The manager must also make sure that the quality of what is purchased meets the organization's needs, that the supplier is reliable, and that the best financial terms are negotiated.

Define strategic control

Control aimed at ensuring that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals.

What are the characteristics of effective control?

Control systems tend to be most effective when they are integrated with planning and when they are flexible, accurate, timely, and objective.

What is cycle time?

Cycle time refers to the time needed by the organization to accomplish activities such as developing, making, and distributing products or services.

A number of ratios are used to compare and assess different aspects of the finances of businesses as controls. Define debt ratios and liquidity ratios

Debt ratios- Reflect ability to meet long-term financial obligations. Liquidity ratios- indicate how liquid (easily converted into cash) an organization's assets are

The _______ inventory control method relies coordination between the business and its suppliers

Just-in-time (JIT)

Manufacturing began a period of decline during what decade?

Manufacturing began a long period of decline in the 1970s when foreign competitors came onto the scene with new equipment and higher levels of efficiency.

_____ Businesses create form utility

Manufacturing, operations management provides form utility by combining many dissimilar inputs to create an output

Define operations control

Operations control is concerned with the processes that the organization uses to transform resources into products or services.

Operations control identifies three stages of control before, during, and after the task, transformation process. Define each and give an example

Preliminary- focus is on inputs to the organizational system. Screening- Focus is on how inputs are being transformed into outputs Postaction- Focus is on outputs from the organizational system. Ex (Textbook): The publishing company that produces this book screens inputs by hiring only qualified editors and graphic artists (preliminary). In addition, quality is checked during the transformation process, such as after the manuscript is typeset (screening), and the outputs- printed and bound books- are checked before they are shipped from the bindery (postaction)

The design of the operations system begins with determining the ______.

Product-Service mix

Define Quality What is TQM?

Quality- The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. -Total quality management (TQM) is a strategic commitment by top management to change its whole approach to business in order to make quality a guiding factor in everything the organization does.

The _______ sector of the US economy is responsible for the most growth in the last decade

Service. less than half US gross national product in 1947 but 75% in 1999

Define outsourcing

Subcontracting services and operations to other firms that can perform them cheaper or better.

What is the difference between ISO 9000 and ISO 14000?

The ISO 9000:2000 standard focuses on quality issues while ISO 14000 focuses on environmental performance.

Which country has the highest level of total productivity?

The United States

Define supply chain management

The process of managing operations control, resource acquisition and purchasing, and inventory so as to improve overall efficiency and effectiveness

Define Control

The regulation of organizational activities in such a way as to facilitate goal attainment

Explain how quality can be relative and absolute

ex: A Lexus is a higher-grade car than a Toyota. The difference in quality stems from differences in design and other features. The Toyota, however, is still considered a high-quality car relative to its engineering specifications and price.

An effective ongoing quality program must start with the strategic commitment of ______.

top management?