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Control
Management Exam #2
| Term | Definition |
|---|---|
| Control Process | ongoing cycle / cybernetic process; purpose is to ensure that activities are providing desired destination 6 Steps |
| Steps of the Control Process | Set Standard, Measure Actual Performance, Compare w/ Standard, Identify Deviations, Analyze Deviations, Take Corrective Action |
| Step 1 of Control Process | Setting the Standard; cutoff that determines the acceptable level for performance aka SMART goals |
| Step 2 of Control Process | Measure Actual Performance; most difficult since the standard could be impossible to measure |
| Step 3 of Control Process | Compare w/ Standard; step 2 minus step 1 |
| Step 4 of Control Process | Identify Deviations; anything other than a 0 is a deviation |
| Step 5 of Control Process | Analyze Deviations; could it be unrealistic standards? manufacturing too fast? what could explain the deviations - good or bad? |
| Step 6 of Control Process | Take Corrective Action; changing level of performance or change the standard |
| Characteristics of Service Provision | - Customer Participation; hard to standardize service - Consumed Immediately; depends on when customer wants it -Readily Available; where + when the customer wants it - Labor Intensive - Intangible; can only know if a service is good after getting it |
| Quality in Service Provision | R - reliable ; A - assurance ; be knowledgeable, timely, kind T - tangible; provide physical evidence that service is well run E - empathy R - responsiveness; work hard to fix a issue |
| Planning + Control Tools | - PERT Networks - rail line w/ branches; use prior data if available - Gantt Charts - waterfall chart Present same information in visually different ways |
| Types / Times of Control | each type is associated w/ a time period Feedward; monitor inputs + prevent problems before they occur Concurrent; monitor ongoing process + correct problems as they occur Feedback; monitor products + correct problems after they've occurred |
| Methods of Control | 5 different ways of setting standards; bureaucratic, objective, normative, concertive, self |
| Bureaucratic Method | rules; influence employee behavior to rules + procedures by rewarding or punishment --> decreases efficiency |
| Objective Method | measures; what output is desired + give employees autonomy to reach the result |
| Normative Method | values and beliefs; managers set norms (expected behavior) and measure how well people adhere to them |
| Concertive Method | groups; work groups set the norms |
| Self Method | Managers provide guidance but mainly on employee to regulate themselves |
| Budgets | most widely used control device; organizations have many budgets --> watch the baker budget video |
| Balanced Scorecard | measurement of performance in 4 areas... - Finances, Customers, Internal Operations, Innovation / Learning Advantages: forces setting goals + measuring performance, minimizes chance for suboptimization |
| Sub optimization | business is not as successful as it could be because one department works only on its own or only for its own success; performance improves in one area but decreases in another |
| Economic Value | Economic Value = amount by which company profits exceed the cost of capital in a given year importance; includes cost of capital + shows if a good / service is paying for itself |
| Components of Economic Value Added | 1. net operating profit after taxes 2. capital spent 3. rate paid for capital 4. multiply capital used by rate of capital 5. subtract total dollar cost of capital from net profit after taxes |
Created by:
Zetiris
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