BUS250 Chapter 16 - Control

control

a regulatory process of establishing standards to achieve organizational goals, comparing actual performance against the standards, and taking corrective action when necessary

standards

a basis of comparison for measuring the extent to which various kinds of organizational performance are satisfactory or unsatisfactory

benchmarking

the process of identifying outstanding practices, processes, and standards in other companies and adapting them to your company

comparison to standards

states that the quality of comparison between actual performance and actual standards depends on the organization’s measurement and information systems

corrective action

involves identifying performance deviations, analyzing those deviations, and developing and implementing programs to correct them

cybernetic

the process of steering or keeping on course

feedback control

a mechanism for gathering information about performance deficiencies after they occur

concurrent control

a mechanism for gathering information about performance deficiencies as they occur, thereby eliminating or shortening the delay between performance and feedback

feedforward control

a mechanism for monitoring performance inputs rather than outputs to prevent or minimize performance deficiencies before they occur

control loss

the situation in which behavior and work procedures do not conform to standards

regulation costs

the costs associated with implementing or maintaining control

cybernetic feasibility

the extent to which it is possible to implement each step in the control process

bureaucratic control

the use of hierarchical authority to influence employee behavior by rewarding or punishing employees for compliance or noncompliance with organizational rules, policies, and procedures

bureaucracy

exercise of control on the basis of knowledge, expertise, or experience

objective control

the use of observable measures of worker behavior or outputs to assess performance and influence behavior

behavior control

the regulation of behaviors and actions that workers perform on the job

output control 

the regulation of workers’ results or outputs through rewards and incentives

normative control

the regulation of workers’ behavior and decisions through widely shared organizational values and beliefs

concertive control

the regulation of workers’ behavior and decisions through work group values and beliefs

self-control (self-management)

a control system in which managers and workers control their own behavior by setting their own goals, monitoring their own progress, and rewarding themselves for goal achievement

balanced scorecard

the measurement of organizational performance in four equally important areas: finances, customers, internal operations, and innovation and learning

suboptimization

performance improvement in one part of an organization but only at the expense of decreased performance in another part

cash flow analysis

a type of analysis that predicts how changes in a business will affect its ability to take in more cash than it pays out

balance sheets

accounting statements that provide a snapshot of a company’s financial position at a particular time

income statements

accounting statements, also called “profit and loss statements,” that show what has happened to an organization’s income, expenses, and net profit over a period of time

financial ratios

calculations typically used to track a business’s liquidity (cash), efficiency, and probability over time compared to other businesses in its industry

budgets

quantitative plans through which managers decide how to allocate available money to best accomplish company goals

zero-based budgeting

a budgeting technique that requires managers to justify every expenditure every year

economic value added (EVA)

the amount by which company profits (revenues minus expenses minus taxes) exceed the cost of capital in a given year

customer defections

a performance assessment in which companies identify which customers are likely to leave and measure the rate at which customers are leaving

value

customer perception that the product quality is excellent for the price offered