MGMT 339 // U3: Control
Which of the following is one of the factors on which performance standards can be set? a) market share b) employee happiness c) quality d) knowledge e) the principle of exception
*C) Quality*
Effective Control Systems
1. Establish effective performance standards/control systems 2. Provide adequate information to employees 3. Ensure acceptability to employees 4. Maintain open communication between managers and employees 5. Use multiple approaches
Downside of Bureaucratic Control
1. Rigid bureaucratic behavior 2. Tactical behavior 3. Resistance to control
Control Cycle
1. Setting performance standards. 2. Measuring performance. 3. Comparing performance against the standards and determining deviations. 4. Taking action to correct problems and reinforce successes.
with clan control, why is empowerment a necessary factor than managers must consider
1. employees jobs have changed and the nature of work is evolving 2. the nature of management has changed 3. the employment relationship has changed
Debt to Equity Ratio
A leverage ratio that indicates the company's ability to meet its long-term financial obligations.
Return on Investment (ROI)
A ratio of profit to capital used, or a rate of return from capital.
Balance sheet
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity. financial control
profit and loss statement
An itemized financial statement of the income and expenses of a company's operations. financial control
market control
Control based on the use of pricing mechanisms and economic information to regulate activities within organizations
feedback control
Control that focuses on the use of *information about results* to correct deviations from the acceptable standard after they arise *"Let's make sure we DID it right"*
management myopia
Focusing on short-term earnings and profits at the expense of longer-term strategic obligations.
budgetary control
The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences
bureaucratic control
The use of rules, regulations, and authority to guide performance
Current Ratio
a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities
management audit
an evaluation of the effectiveness and efficiency of various systems within an organization. Includes internal and external audits
What is a control?
any process that directs the activities of individuals toward the achievement of organizational goals
The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences is referred to as
budgetary control
Dana's company relies on rules, as set forth in the employee handbook, the authority of managers, and regular employee reviews to guide performance. Dana's company uses _____ control.
bureaucratic
Types of Control
bureaucratic, market, clan
Which of the following is a symptom of an out-of-control company?
lack of periodic reviews
Evelyn had to buy a lot of equipment to open her beauty salon. She bought most of it on credit. The amounts of money that she owes her creditors are called
liabilities.
Control based on the use of pricing mechanisms and economic information to regulate activities within organizations is referred to as _____ control.
market
bureaucratic control systems are designed to do what?
measure progress toward set performance goals AND, if necessary, to apply corrective measures
market controls
price becomes an indicator of value of the good or service price competition has the effect of controlling productivity and performance
transfer price
price charged by one unit for a good or service provided to another unit within the organization business unit control
An itemized financial statement of the income and expenses of a company's operations is called the
profit and loss statement.
Types of Budgets
sales, production, cost, cash, capital, master
financial control
the use of monetary based statements to monitor the firm
Debt to Equity Ratio Formula
total liabilities/total stockholders equity
Current Ratio Formula
current assets - current liabilities
clan control
Control based on the cultural norms, values, shared goals, and trust among group members.
ROI formula
Net Operating Income / Average Operating Assets
Balanced Scorecard (BSC)
control system combining four sets of performance measures: financial, customer, business process, and learning/growth
Feed forward control
control that takes place before operations begin. It includes *policies, procedures, and rules* designed to ensure that planned activities are carried out properly *"Let's make sure we WILL do it right"*
concurrent control
control that takes place while plans are being carried out and includes *directing, monitoring, and fine-tuning* activities. *"Let's make sure we ARE doing it right"*
At what levels do market controls exist
corporate, business unit, and individual
At Key Agricultural Supply Co., all assembly workers must wear specialized gear to reduce possible injuries from minute particles in the manufacturing environment. This requirement best reflects _____ control.
feedforward
Which of the following controls is future oriented and aims to prevent problems before they arise?
feedforward control