Controlling Flashcards
Process of measuring performance against established standards
Systematic effort to regulate organizational activities that ensures they are processing as planned
A fundamental function that involves monitoring, evaluating and regulating activities
Controlling
4 components of controlling
- Establishing standards
- Measuring performance
- Comparing performance and standards
- Taking corrective action
Controlling begins with setting clear and measurable standards against which performance can be assessed
Establishing standards
Standards can be
qualitative or quantitative
deal with numbers. They measure things you can count, calculate, or measure, like speed, weight, time, or how many items are made.
quantitative standards
They measure how good something is, based on opinions, descriptions, or satisfaction levels.
qualitative standards
standards may relate to various aspects of the organization like quality, time, cost, or customer satisfaction
establishing standards
Involves collecting data and information through various means such as reports, key performance indicators, and performance evaluation
Once the standard are set, the next step is to _____ actual _____ bagainst these standards
Measuring performance
The gathered data are then compared to the established standards
Comparing performance and standards
variance between actual and expected performance are the analyze
comparing performance and standards
If significant variances are detected, organizations must take _____. This may involve adjusting processes
Taking corrective action
this may involve adjusting processes, reallocating resources, providing additional training, or revising goals and plans
taking corrective action
3 Methods of controlling
Feedforward control
Concurrent control
Feedback control
Anticipating potential problems before they occur
proactive approach aims to identify and address issues before they impact performance
Feedforward control
Monitoring and regulating activities as they occur
allow immediate adjustments ensuring activities stay on course
Concurrent control
Involves monitoring after they have been completed
providing response and making adjustments as necessary
Feedback control
Inputs > conversion process > outputs
Feedforward control > Concurrent control > feedback control
Critical documents that provide a snapshot of a company’s financial performance and position at a specific point in time
Financial statements
these statements are essential tools for various stakeholders, including investors, creditors, management, and regulators, to assess financial health and viability of an organization
Financial statements
Types of financial statements
Balance sheet
Income statements
statement of financial position
balance sheet
profit and loss statement
income statement
showcase financial position by illustrating what the company owns and owes
balance sheet
Presents a snapshot of a company’s assets, liabilities, and equity.
Balance sheet
Three major parts of balance sheet
Assets
Liabilities
Owner’s equity
Resources owned by the company, including tangible assets like property and equipment, as well as intangible assets like patents and trademark
Assets
Represents obligations or debts by the company to external parties including loans, accounts payable, and accrued _____
Liabilities
Residual interest in the assets of the entity after deducting liabilities.
includes common stock, retained earnings, and additional paid-in capital
Equity
Reports an organization’s revenues, expenses and net income or loss over specific period
Income statement
provides insights into the profitability of the business
income statement
Three main part of income statement
Revenue
Expenses
Net income
Represents the total income generated by the company from its primary operation
Revenue
Include costs associated with running the business, such as operating _____, ibterest, and taxes
Expenses
refers to the amount an individual or business makes after deducting cost, allowances
net income
