Chapter 16: Controlling And Such Flashcards Preview

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Flashcards in Chapter 16: Controlling And Such Deck (45)
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1

Controlling

Monitoring performance, comparing it with goals, and taking corrective action when needed

2

Six reasons why control is needed

1) to adapt to change and uncertainty
2) to discover irregularities and errors
3) to reduce costs, increase productivity, or add value
4) to detect opportunities or increase innovation
5) to provide performance feedback
6) to decentralize decision making, and facilitate teamwork

3

Control process steps
(4 steps)

1) establish standards
2) measure performance
3) compare performance to standards
4) take corrective action if needed

4

Control standard

The first step in control process

The desired performance level for a given goal

5

Control charts

Visual statistical tool used for quality control purposes

6

Management by exception

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

7

Feedforward control

Focussed on preventing future problems

8

Concurrent Control

Entails collecting performance information in real time

9

Feedback control

Amounts to collecting performance information after a task or project is done

10

3 levels of control

Strategic control by top managers

Tactical control by middle managers

Operational control by first line managers

11

Strategic control

Monitoring performance to ensure that strategic plans are being implemented and taking corrective action when needed

12

Tactical control

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

13

Operational control

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

14

Six areas of control

Physical
Human
Informational
Financial
Structural
Cultural

15

Physical area

Includes buildings, equipment, and tangible products

16

Human resource area

Monitor employees personality tests l, drugs tests, performance tests, job satisfication

17

Informational area

Production schedules
Sales forecasts
Analyses of competition
Public briefings

18

Financial area

What’s the advertising budget, how much is owed, is there enough cash on hand

19

Structural area

Who reports to who

2 types: beaurocratic and decentralized

20

Bureaucratic control

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

21

Decentralized control

An approach to organizational control that is characterized by informal and organic structural arrangements, opposite of bureaucratic control

22

Supply chain

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

23

Budget

Formal financial projection

24

Incremental budgeting

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

25

Fixed budget

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

26

Variable budget

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

27

Financial statement

Summary of some aspect of an organizations financial status

28

Balence sheet

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

29

Income statement

Summary of an organizations financial results - revenues and expenses - over a specified period of time

30

Audits

Formal certifications of an organizations financial and operational systems