12 terms

GM 105 Chapter 11

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
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
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