Chapter 10

Question 1

The systematic process through which managers regulate organizational activities to make them consistent with expectations.

Answer 1

Organizational control

Question 2

A comprehensive managemente control system that balances traditional financial measures with measures of costumer service, internal business processes, and the organization’s capacity for growth.

Answer 2

Balanced scorecard

Question 3

This indicator reflects a concern that the organization’s capacity to improve short and long term financial performance.

Answer 3

Financial performance perspective

Question 4

This indicator measures the way customers view the organization as well as their satisfaction.

Answer 4

Customer-service indicators

Question 5

This indicator focuses on production, operating statistics, such as order fulfillment or cost per order.

Answer 5

Internal business process indicators

Question 6

Indicator that focuses on how well the human resources and capital are being managed.

Answer 6

Organization’s potential for learning and growth

Question 7

Goals for organizational departments in specific operational terms.

Answer 7

Standard of performance

Question 8

Four steps for feedback control

Answer 8

1. Establish standards
2. Measure actual performance
3. Compare performance to standards
4. Take corrective actions

Question 9

One of the most commonly used methods of managerial control, it consists in setting targets for the organization’s expenditures, monitoring results and comparing them to the budget.

Answer 9

Budgetary control

Question 10

An organizational unit under the supervision of a single person who is responsible for its activity.

Answer 10

Responsibility center

Question 11

A financial statement that shows the financial position with respect to assets and liabilities at one specific point of time.

Answer 11

Balance sheet

Question 12

A financial statement that summarizes the firm’s financial performance for a given time.

Answer 12

Income statement

Question 13

Another name for income statement

Answer 13

Profit and Loss statement

Question 14

Use of rules, policies, hirearchy of authority, reward systems ando other formal devices to influence employee behavior and performance.

Answer 14

Hierarchical Control

Question 15

Use of organizational culture, group norms, and focus on goals rather than on rules.

Answer 15

Decentralized control

Question 16

Sharing financial information and results with all employees in the organization.

Answer 16

Open-book management

Question 17

An organization wide commitment to infusing quality to their every activity through continuous improvement.

Answer 17

Total Quality Management

Question 18

TQM technique in which group of 6 to 12 volunteers who meet to discuss and solve problems that affect the quality of their work.

Answer 18

Quality Circle

Question 19

TQM technique that measures products, services and practices against major competitors or industry leaders.

Answer 19

Benchmarking

Question 20

Aproach used in TQM that emphasizes relentless pursuit of higher quality and lower costs.

Answer 20

Six Sigma

Question 21

Time taken to complete company process.

Answer 21

Cycle time

Question 22

Approach used in TQM that is the implementation of a number of small, incremental improvements in all areas of the organization on an ongoing basis.

Answer 22

Continuous improvement

Question 23

Set of standards as outlined by the IOS that represents an international consensus of what consitutes effective TQM.

Answer 23

ISO 9000 standards

Question 24

A control System that measures performance in terms of after tax profits minus the cost of capital invested in tangible assets.

Answer 24

Economic Value Added (EVA)