CH9 - LEADING Flashcards
process of ascertaining whether organization objectives have been achieved
controlling
Steps in the control process
- establishing performance objectives and standards
- measuring actual performance
- comparing actual performance to objectives and standards
- taking necessary action based on the results of the comparisons
Types of Control
- feedforward control
- concurrent control
- feedback control
when management anticipates problems and prevents their occurrence
feedforward control
when operations are already ongoing and activities to detect variances are made
concurrent control
when information is gathered about a completed activity, and in order that evaluation and steps for improvement are derived
feedback control
components of organization control systems
- strategic plan
- long-range financial plan
- operating budget
- performance appraisals
- statistical reports
- policies and procedures
strategic control systems
- financial analysis
- financial ratio analysis
These ratios assess the ability of a company to meet its current obligations
Liquidity ratios
show how effectively certain assets or liabilities are being used in the production of goods and services
efficiency ratios
group of ratios designed to assess the balance of financing obtained through debt and equity
financial leverage ratios
these ratios measure how much operating income or net income a company is able to generate in relation to its assets, equity, and sales
profitability ratios
Identifying control problems
- executive reality check
- comprehensive internal audit
- general checklist of symptoms of inadequate control
employees at the frontline often complain that management imposes certain requirements that are not realistic
executive reality check
undertaken to determine efficiency and effectivity of the activities of an organization
internal audit
