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systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets. and standards of performance
focuses on human, material, and financial resources flowing into the organization - regulation of inputs to ensure that they meet the standards necessary for the transformation process
monitoring ongoing activities to ensure that they are consistent with standards - regulation of ongoing activities that are part of the transformation process to ensure that they conform to organizational standards - the heart of any control system
feedback control (post action or output)
focuses on the organization's outputs - regulation exercised after a product or service has been completed to ensure that the output meets organizational standards
Establish standards of performance - should be linked to an individual or team that is responsible for achieving it
target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed
Measure performance. performance data obtained from three sources. financial - administrative - production
Compare performance against standards. evaluate the quality of the information. usefulness - accuracy - objectiveness
management by exception
control is enhanced by concentrating on the significant deviations from the standard
use of rules, policies, hierarchy of authority, reward systems, and other formal devices to influence employee behavior and assess performance
use of organizational culture, group norms, and a focus on goals rather than rules and procedures, to foster compliance with organizational goals
group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work
continuous process of measuring products, services, and practices against major competitors or industry leaders
quality control approach that emphasizes a relentless pursuit of higher quality and lower costs. 3.4 defects per million opportunities in any process
implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis
steps of feedback control
establish standards of performance - measure actual performance - compare performance standards - take corrective action (if inadequate) - do nothing or provide reinforcement
the process of setting targets for an orgs exenditures, monitoring results and comparing them to the budget making changes as needed
an org unit under the supervision of a single person who is responsible for its activity
a budget that outlines the anticipated and actual expenses for a responsibility structure
budget that estimates and reports weekly or daily cash floyo ensure that the company has sufficient cash to meet its obligation
a bduget that plans and reports investments in major assets to be depreciated over several years
a budgeting rocess in which middle and lower level managers set departmental budget targets in accordance with overall company revenues and expenditures specified by top management
a bugdeting process in which lower-level managers budget their departments resource needs and pass them up to top management for approval
a financial statement that shows the firms financial statement with respect to assets and liabilities at a specific point and time
a ratio that measures the orgs internal performance with respect to key activities defined by management
certification based on a set of international standards for quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements
economic value added (EVA)
a control system that mesures performance in terms of after tx profits minus the cost of capital invested in tangible assets
market value-added (MVA)
control system that measures the stck markets estimate of the value of a company'es past and expected capital investment projects
activity based costing
a control system that identifies the various activities needed to provide a product and allocates costs accordingly
a comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes, and the orgs capacity for learning and growth
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