Management- Chapter 19 Flashcards
Organizational Control
The systematic process through which managers regulate organizational activities to meet planned goals and standards of performance.
Balanced Scorecard
a comprehensive management control system that balances traditional financial measures with measures of customer service, internal business processes and the organization’s capacity for learning and growth.
Responsibility center
Any organizational department or unit under the supervision of a single person who is responsible for its activity.
Expense Budget
Outlines that anticipated and actual expenses for a responsibility center.
Revenue Budget
Lists forecasted and actual revenues of the organization.
Cash Budget
Estimates receipts and expenditures of money on a dailey or weekly basis to ensure that an organization has sufficient cash to meet its obligations.
Capital Budget
A budget that plans and reports investments in major assets to be depreciated oer several years.
Top-Down Budgeting
Many companies use top-down budgeting, which means that the budgeted amounts for the coming year are literally imposed on middle- and lower-level managers.
Bottom-up Budgeting
On the other hand, bottom-up budgeting involves lower-level managers anticipating their department’s budget needs and passing them up to top management for approval.
Balance Sheet
Shows the firm’s financial position with respect to assets and liabilities at a specific point in time.
Income Statement
Summarizes the firm’s financial performance for a given time interval.
Liquidity Ratio
Indicates the organization’s ability to meet its current debt obligations.
Activity Ratio
Measures the organization’s internal performance with respect to key activities defined by management.
Profitability Ratio
Describes the firm’s profits relative to a source of profits, such as sales or assets.
Hierarchical Control
Involves monitoring and influencing employee behavior through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems and other formal mechanisms.
Decentralized Control
The organization fosters compliance with organizational goals through the use of organizational culture, group norms, and a focus on goals rather than rules and procedures.
Open-book Management
Allows employees to see for themselves the financial condition of the organization and encourages them to think and act like business owners.
Total Quality Management (TQM)
An organization-wide effort to infuse quality into every activity in a company through continuous improvement.
Quality Circles
Offer one technique for implementing total quality management and include a group of 6-12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work.
Benchmarking
Another option for tracking quality is benchmarking, the continuous process of measuring products, services, and practices against major competitors or industry leaders.
Six Sigma
A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs.
Cycle Time
A reduction is cycle time, the stps that are taken to complete a company process, improves overall company performance as well as quality.
Continuous Improvement
Or Kaizen is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.
ISO 9000 Standards
As global business expands, many companies have adopted a universal benchmark for quality management practives which represents and international consensus of what constitutes effective quality management as outlined by the International Organization for Standardization.
Economic Value-Added (EVA)
Measurement systems gauge financial performance in terms of after-tax profits minus the cost of capital invested in tangible assets.
Market Value-added (MVA)
A control system that monitors the stock market’s estimate the value of a company’s past and expected capital investment projects.
Activity-based Costing (ABC)
A control system that identifies the various activities needed to provide a product and allocates costs accordingly.
Corporate Governance
Many organizations are moving toward increased control from the top in terms of corporate governane, which refers to the framework of systems, rules and practices by which an organization ensures accountability, fairness, and transparency in the firm’s relationship with stakeholders.
