Management- Chapter 19

Question 1

Organizational Control

Answer 1

The systematic process through which managers regulate organizational activities to meet planned goals and standards of performance.

Question 2

Balanced Scorecard

Answer 2

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.

Question 3

Responsibility center

Answer 3

Any organizational department or unit under the supervision of a single person who is responsible for its activity.

Question 4

Expense Budget

Answer 4

Outlines that anticipated and actual expenses for a responsibility center.

Question 5

Revenue Budget

Answer 5

Lists forecasted and actual revenues of the organization.

Question 6

Cash Budget

Answer 6

Estimates receipts and expenditures of money on a dailey or weekly basis to ensure that an organization has sufficient cash to meet its obligations.

Question 7

Capital Budget

Answer 7

A budget that plans and reports investments in major assets to be depreciated oer several years.

Question 8

Top-Down Budgeting

Answer 8

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.

Question 9

Bottom-up Budgeting

Answer 9

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.

Question 10

Balance Sheet

Answer 10

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

Question 11

Income Statement

Answer 11

Summarizes the firm’s financial performance for a given time interval.

Question 12

Liquidity Ratio

Answer 12

Indicates the organization’s ability to meet its current debt obligations.

Question 13

Activity Ratio

Answer 13

Measures the organization’s internal performance with respect to key activities defined by management.

Question 14

Profitability Ratio

Answer 14

Describes the firm’s profits relative to a source of profits, such as sales or assets.

Question 15

Hierarchical Control

Answer 15

Involves monitoring and influencing employee behavior through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems and other formal mechanisms.

Question 16

Decentralized Control

Answer 16

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.

Question 17

Open-book Management

Answer 17

Allows employees to see for themselves the financial condition of the organization and encourages them to think and act like business owners.

Question 18

Total Quality Management (TQM)

Answer 18

An organization-wide effort to infuse quality into every activity in a company through continuous improvement.

Question 19

Quality Circles

Answer 19

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.

Question 20

Benchmarking

Answer 20

Another option for tracking quality is benchmarking, the continuous process of measuring products, services, and practices against major competitors or industry leaders.

Question 21

Six Sigma

Answer 21

A quality control approach that emphasizes a relentless pursuit of higher quality and lower costs.

Question 22

Cycle Time

Answer 22

A reduction is cycle time, the stps that are taken to complete a company process, improves overall company performance as well as quality.

Question 23

Continuous Improvement

Answer 23

Or Kaizen is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis.

Question 24

ISO 9000 Standards

Answer 24

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.

Question 25

Economic Value-Added (EVA)

Answer 25

Measurement systems gauge financial performance in terms of after-tax profits minus the cost of capital invested in tangible assets.

Question 26

Market Value-added (MVA)

Answer 26

A control system that monitors the stock market’s estimate the value of a company’s past and expected capital investment projects.

Question 27

Activity-based Costing (ABC)

Answer 27

A control system that identifies the various activities needed to provide a product and allocates costs accordingly.

Question 28

Corporate Governance

Answer 28

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.