Chapter 15 - Managing Quality & Performance

Question 1

Organizational control

Answer 1

systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance

Question 2

Standard

Answer 2

different for every business & sets a point that every organization needs to hit

Question 3

Six sigma

Answer 3

is a quality standard that specifies a
goal of no more than 3.4 defects per million parts (DMAIC)

Question 4

Open book management

Answer 4

• Allows employees to see the financial condition of the company for themselves
• Shows the individual employee how his or her job fits into the big picture
• Ties employee rewards to the company’s overall
  success

Question 5

Inventory turnover ratio

Answer 5

Total sales / Average inventory

Question 6

Internal business processes

Answer 6

focus on production and operating statistics
- For an airline, business process indicators may include on-time arrivals and adherence to safety guidelines

Question 7

Feedback control model

Answer 7

help managers meet strategic goals by monitoring and regulating the organization’s activities and using feedback to determine whether performance meets established standards

Question 8

Liquidity ratio

Answer 8

indicates an organization’s ability to meet its current debt obligations

Question 9

Income statement

Answer 9

(profit-and-loss statement or P&L) summarizes the firm’s financial performance for a given time interval, usually one year

Question 10

Activity ratio

Answer 10

measures internal performance with respect to key activities

Question 11

Balance sheet

Answer 11

shows the firm’s financial position with respect to assets and liabilities at a specific point in time

Question 12

Profitability ratio

Answer 12

state profits relative to a source of profits

Question 13

Cash budget

Answer 13

estimates receipts and expenditures of money on a regular basis to ensure that an organization has sufficient cash to meet its obligations

Question 14

Capital budget

Answer 14

lists planned investments in
major assets

Question 15

Top down budgeting

Answer 15

means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers

Question 16

Bottom up budgeting

Answer 16

is a process in which lower-
level managers anticipate their departments’
resource needs and pass them up to top
management for approval

Question 17

Describe and understand the balanced scorecard

Answer 17

includes
1) financial performance (orgs. activities contribute to improving financial performance)
2) Customer service (customer retention & satisfaction)
3) Business process (production & operating statistics)
4) potential for learning and growth (how well human capital & resources are being managed)

Question 18

TQM

Answer 18

total quality management
-an organization-wide effort to infuse quality into every activity in a company through continuous
improvement

Question 19

ISO-9000 (which countries lead in the total number vs new amount of certifications)

Answer 19

represent an international consensus of what constitutes effective quality management
- UNIVERSAL BENCHMARK
- china, italy, germany (TOP)
- Greece, Mexico, Portugal (new certifications)