Ch.19 Managing Quality and Performance

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Organizational Control
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is the systematic process through which managers regulate organizational activities to meet planned goals and standards of performance
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Balanced Scoreboard
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is a comprehensive management control system that balances traditional financial measures with measure of customer service,internal business processes and the organization’s capacity for learning and growth
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Responsibility Center
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is any organizational department or unit under the supervision of a single person who is responsible for its activity
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Expense Budget
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outlines the anticipated and actual expenses for a responsibility center
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Revenue Budget
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lists forecasted and actual revenues of the organization
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Cash Budget
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estimates receipts and expenditures of money on a daily or weekly basis to ensure that an organization has sufficient cash to meet its obligations
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Capital Budget
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A budget that plans and reports investments in major assets to be depreciated over several years
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Top-down budgeting
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which means that budgeted amounts for the coming year are literally imposed on middle-and lover level managers
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Bottom-up-budgeting
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involves lower level managers anticipating their department’s budget needs and passing them up to top management for approval
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Balance Sheet
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shows the firms financial position with respect to assets and liabilities at a specific point in time
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Income Statement
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summarizes the firm’s financial performance for a given time interval
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Liquidity Ratio
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indicates the organization’s ability to meet its current debt obligations
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Activity Ratio
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measures the organization internal performance with respect to key activities defined by management
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Profitability Ratio
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describes the firm’s profits relative to a source of profits such as sales or assets
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Hierarchical Control
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involves monitoring and influencing employee behavior through extensive use of rules,policies,hierarchy of authority,written documentation,reward systems,and other formal mechanisms
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Decentralized Control
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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
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Open-book Management
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Allows employees to see for themselves the financial condition of the organization and encourages them to think and act like business owners
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Total Quality Management (TQM)
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is an organization wide effort to infuse quality into every activity in a company through continuous improvement
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Quality Circle
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offer one technique for implementing total quality management and include a group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work
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Benchmarking
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tracking quality,the continuous process of measuring products,services, and practices against major competitors or industry leaders
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Six Sigma
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is a quality control approach that emphasizes a relentless pursuit of higher quality and lower costs
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Cycle Time
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the steps that are taken to complete a company process,improves overall company performance as well as quality
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Continuous Improvement
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or “kaizen”,is the implementation of a large number of small,incremental improvements in all areas of the organization on an ongoing basis
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ISO 9000 Standards
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universal benchmark for quality management practices,which represent an international consensus of what constitutes effective quality management as outlined by the International Organization of Standards
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Economic value-added (EVA)
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measurements systems gauge financial performance in terms of after-tax profits minus the cost of capital invested in tangible assets
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Market Value-added (MVA)
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A control system that monitors the stock markets estimate of the value of a company’s past and expected capital investment projects
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Activity-Based costing (ABC)
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is a control system that identifies the various activities needed to provide a product and allocates cost accordingly
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Corporate governance
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the framework of systems, rules and practices bu which an organization ensures accountability, fairness, and transparency in the firm’s relationship with stakeholders

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