GM 105 Chapter 11

12 terms by tchow2254

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exam 3

Appropriate Measures

measures such as ROI and EPS, that are used to evaluate a corporation's or a division's ability to achieve a profitability objective

Performance

the end result of activity

Steering controls

measure variables that influence future profitability
• Cost per passenger mile (airlines)
• Inventory turnover ratio (retail)
• Customer satisfaction

Output controls

specify what is to be accomplished by focusing on the end result

Behavior controls

specify how something is done through policies, rules, standard operating procedures and orders from supervisors; sales quota

Input controls

emphasize resources

Enterprise Risk Management

Management a corporate-wide, integrated process for managing uncertainties that could negatively or positively influence the achievement of objectives
1.Identify the risks using scenario analysis, brainstorming, or performing risk assessments
2.Rank the risks, using some scale of impact and likelihood
3.Measure the risks using some agreed-upon standard

Shareholder Value

the present value of the anticipated future streams of cash flows from the business plus the value of the company if liquidated

Economic Value Added (EVA)

measures the difference between the pre-strategy and post-strategy values for the business

EVA

after tax income-total annual cost of capital

Market Value Added (MVA)

measures the difference between the market value of a corporation and the capital contributed by shareholders and lenders
• Measures the stock market's estimate of the net present value of a firm's past and expected capital investment projects

Balanced score card

combines financial measures that tell results of actions already taken with operational measures on customer satisfaction, internal processes and the corporation's innovation and improvement activities
• Financial
• Customer
• Internal business perspective
• Innovation and learning

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