Chapter 16 - Management

monitoring performance, comparing it with goals, and taking corrective action as needed

controlling

What are the 4 steps in the control process?

establish standards

measure performance

compare performance to standards

take corrective action if necessary

the desired performance level for a given goal

performance standard

control principle that says managers should be informed of a situation only if data show a significant deviation from standards

management by excedption

visual statistical tool used for quality control purposes

control charts

What are the 3 levels of control?

strategic

tactical

operational

level of control that includes monitoring performance to ensure that strategic plans are being implemented and take corrective action as needed

strategic control

level of control that includes monitoring performance to ensure that tactical plans, those at the divisional or departmental level, are being implemented

tactical control

level of control that includes monitoring performance to ensure that operational plans (day-to-day goals) are being implemented, and then take corrective action as needed

operational control

an approach to organizational control that’s characterized by the use of rules, regulations, and formal authority to guide performance

bureaucratic control

an approach to organizational control that’s characterized by informal and organic structural arrangement

decentralized control

gives top managers a fast but comprehensive view of the organization by 4 indicators

balanced scorecard

What are the 4 indicators on the balanced scorecard?

customer satisfaction

internal business processes

innovation and learning activities

financial measures

The perspective on the balance scorecard that looks at profitability, growth, and shareholder values

financial

the perspective on the balanced scorecard that states that the priority is taking care of the customer

customer

this section of the balanced scorecard focuses on quality, employee skills, and productivity

internal business

this section of the balanced scorecard measure learning and growth of employees

innovation and learning

visual representation of the 4 perspectives of the balanced scorecard

also allows managers to communicate their goals to that everyone in the company can see and understand them

strategy map

formal financial projection

budget

allocates increased or decreased funds to a department by using the last udget period as a reference point

incremental budgeting

allocates resources on the basis of a single estimate of costs

fixed budget

allows the allocation of resources to vary in proportion with various levels of activity

variable budget

What are the 3 basic types of financial statements?

balance sheet

income statement

cash flow statement

summarizes an organizations overall financial worth (assets and liabilities) at a specific point in time

balance sheet

resources the organization controls

assets

claims, or debts, by suppliers, lenders, and other non-owners

liabilities

summarizes an organizations financial results (revenues and expenses) over a specified period of time

income statement

summarizes cash generated and used over a specified period of time

cash flow statement

indicate how easily a firm’s assets can be converted to cash

liquidity ratios

the efficiency in which a company uses its assets to generate revenue

asset turnover ratios

how effectively management is generating a return or profit

return ratios

formal verification of an organization’s financial and operational systems

audit

audit performed by outside experts

external audit

audit performed by the organization’s own profesional staff

internal audit

Who proposed 4 ideas for making organizations more responsive, more democratic, and less wasteful?

W. Edwards Deming

Deming said quality should be aimed at the needs of the _______.

consumer

Deming said companies should aim at improving the ______, not blaming workers.

system

Deming said improved quality leads to increased ________, increased company prospects, and increased employment.

market share

The PDCA Cycle stands for what?

plan

do

check

act

a comprehensive approach dedicated to continuous quality improvement, training, customer satisfaction

total quality management (TQM)

What are the two core principles of TQM?

people orientation

improvement orientation

core principle of TQM that that everyone involved in the organization should focus on delivering value to customers

people orientation

core principle of TQM that everyone should work on continuously improving work processes

improvement orientation

enables customers to rate the quality of service along 5 dimensions

RATER scale

What does RATER stand for?

reliability

assurance

tangibles

empathy

responsiveness

What are some TQM techniques?

outsourcing

reduced cycle time

ISO 9000 and 14000 series

statistical process control

six sigma and lean six sigma

quality-control procedures that can be audited by independent quality-control experts

ISO 9000

set of quality-control procedures that extends the concept of ISO 9000 series, identifying standards for environmental performance

ISO 14000

statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability

statistical process control

rigorous statistical analysis process that reduces defects in manufacturing and service-related industries

six sigma

quality control approach that focuses on problem solving and performance improvement of a well-defined project

lean six sigmao

outputs divided by inputs

productivity

What are the outputs measured in productivity?

goods and services produced

What are the inputs measured in productivity?

labor, capital, materials, and energy