Chapter 16 Flashcards
What is control in an organizational context?
Any process that directs the activities of individuals toward the achievement of organizational goals.
What are some aspects of control?
Having oversight, tracking what’s going on in the organization, monitoring progress of goals.
What is bureaucratic control?
The use of rules, regulations, and authority to guide performance.
What is market control?
Control based on the use of pricing mechanisms and economic information to regulate activities within organizations.
What is clan control?
Control based on the norms, values, shared goals, and trust among group members.
What is the Control Cycle?
Setting performance standards.
Measuring performance.
Comparing performance against the standards and determining deviations.
Taking action to correct problems and reinforce successes.
What is a Standard?
Expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed.
How can performance be measured?
With written reports, oral reports, and personal observation.
What is the Principle of Exception?
A managerial principle stating that control is enhanced by concentrating on the exceptions to or significant deviations from the expected result or standard.
Describe the process of an After-Action Review.
- What were intended results?
- What were our actual results?
- What caused our results?
- What will we sustain? Improve?
A frank and open-minded discussion of four basic questions aimed at continuous improvement.
What is Feedforward Control?
The control process used before operations begin, including policies, procedures, and rules designed to ensure that planned activities are carried out properly.
What is Concurrent Control?
The control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed.
What is Feedback Control?
Control that focuses on the use of information about previous results to correct deviations from the acceptable standard.
What is a Management Audit?
An evaluation of the effectiveness and efficiency of various systems within an organization.
What is the difference between an External Audit and a Internal Audit?
An external audit is an evaluation conducted by one organization, such as a CPA firm, on another. An internal audit is a periodic assessment of a company’s own planning, organizing, leading, and controlling processes.
What is Budgeting?
Also called budgetary controlling.
The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences.
What are the 6 different types of budgets?
- Sales
- Production
- Cost
- Cash
- Capital
- Master
What is Activity-Based Costing?
A method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities.
What is a Balance Sheet?
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders’ equity.
Assets = Liabilities + Stockholders’ equity
What is the Profit and Loss Statement?
An itemized financial statement of the income and expenses of a company’s operations.
Controlling by profit and loss is most commonly used for the entire enterprise and, in the case of a diversified corporation, its divisions.
What are the different types of Financial Ratios?
- Current ratio: A liquidity ratio that indicates the extent to which short term assets can decline and still be adequate to pay short-term liabilities.
- Debt-equity ratio:A leverage ratio that indicates the company’s ability to meet its long-term financial obligations.
- Return on investment: A ratio of profit to capital used, or a rate of return from capital.
What is a Management Myopia?
Focusing on short-term earnings and profits at the expense of longer-term strategic obligations.
What steps do you take to design an effective control system?
- Establish valid performance standards.
- Provide adequate information to employees.
- Ensure acceptability to employees.
- Maintain open communication.
- Use multiple approaches.
