Chapter 8 Flashcards
Chapter 8 test
- Process where managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals
- Formal, target-setting, monitoring, evaluation and feedback systems that provide managers with information about how well the organization’s strategy and structure are working
Controlling
Control system
Organizational culture/clan control
Behavior control
Output control
Three Organizational Control Systems
Measures of how efficiently managers convert resources into profits
Return on investment (ROI)
Measures of how well managers protect resources to meet short term debt—current and quick ratios
Profit ratios
Liquidity ratios
Measures of how much debt or equity is used to finance operations—debt-to-asset and times-covered ratios
Measures of how efficiently managers are creating value from assets—inventory turnover, days sales outstanding ratios.
Leverage ratios
Activities ratios
- Goals that challenge and stretch managers’ ability but are not out of reach and do not require an impossibly high expenditure of managerial time and energy
Stretch goals
Operating Budget - A blueprint that states how managers intend to allocate and use the resources they control to attain organizational goals effectively and efficiently
Operating budget
Objective financial measures
Challenging goals and performance standards
Appropriate operating budgets
Three components are the essence of effective output control.
Actively monitor and observe the behavior of their subordinates
Teach subordinates the behaviors that are appropriate and inappropriate
Intervene to take corrective action as needed
Direct Supervision involves managers who:
A goal-setting process in which managers and each of his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate the extent to which the subordinate is achieving those goals
Management by Objectives (MBO)
Control of behavior by means of a comprehensive system of rules and standard operating procedures
Bureaucratic Control
The shared set of beliefs, expectations, values, norms, and work routines that influences how members of an organization relate to one another and work together to achieve organizational goals
Control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations
Organizational Culture -
Clan Control -
Culture whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective
Culture that leads to values and norms that fail to motivate or inspire employees
Leads to stagnation and often failure over time
Adaptive culture
Inert culture
Movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness
Organization change
Process through which managers try to increase organizational members’ abilities to understand and appropriately respond to changing conditions
Impetus for change
Can help members make decisions about changes
Organizational learning
- A fast, revolutionary approach to change in which top managers identify what needs to be changed, decide what to do, and then move quickly to implement changes throughout the organization
- A gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change
- Process of comparing one company’s performance on specific dimensions with the performance of other high performing organizations
Top down change
Bottom up changing
Benchmarking
