Chapter 19 Managing Quality and Performance © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part The Meaning of Control Organizational control is the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets, and standards of performance © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 33     Establish Standards of Performance Measure Actual Performance Compare Performance to Standards Take Corrective Action © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 44 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 55 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 66 19.2 The Balanced Scorecard © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Hierarchical versus Decentralized approaches  Hierarchical controls include the monitoring of behavior through rules, policies, reward systems, and written documentation  Decentralized controls based on values and assumptions; rules are only used when necessary Culture is adaptive, uniting individuals and teams © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 19.3 Hierarchical and Decentralized Methods of Control © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part  Decentralized philosophy  Gets every employee thinking like an owner  Information sharing and teamwork  Allows employees to see the financial condition of company  Sees how his/her job fits into organizational success © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 10 19.4 Which Countries Have the Most Secretive Economies? © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 11    Infuse quality into every aspect of the business, all day-to-day activities Became popular in the U.S in the 1980s Focuses on: Teamwork Collaboration Identifying improvements  The goal of TQM is zero defects © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12  Quality Circles  Benchmarking  Six Sigma  Quality Partnering  Continuous Improvement © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 13 19.5 A Five-Step Benchmarking Process © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 14 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 15 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 16  Setting targets and monitoring expenditures  Budgets list planned and actual expenditures  Budgets are associated with a division or department The unit of analysis for budgeting is the responsibility center © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 17 17  Expense Budget  Revenue Budget  Cash Budget  Capital Budget Top-down Budgeting Bottom-up Budgeting  Zero-Based Budget © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 18 18 Financial Control Financial Statements provide basic information for financial control Balance Sheet shows firm’s financial position Income Statement profit-and-loss (P&L) statement highlights firm’s financial performance 19in part © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or 19 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 20 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 21    Managers need to evaluate financial reports Comparing performance with other data and industry standards Financial Analysis: Ratios Statistics  Review: Profits, assets, sales, and inventory © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 22 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 23  ISO 9000 standards – International Organization for Standardization Organization certification 157 Countries   Organizations demonstrate a commitment to quality Europe leads in certifications but the United States has had the greatest number of new certifications in recent years © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 24 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 25 [...].. .19. 4 Which Countries Have the Most Secretive Economies? © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 11    Infuse quality into every aspect of the business, all day-to-day activities Became popular in the U.S in the 198 0s Focuses on: Teamwork Collaboration... Sheet shows firm’s financial position Income Statement profit-and-loss (P&L) statement highlights firm’s financial performance 19in part © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or 19 © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website,... Sigma  Quality Partnering  Continuous Improvement © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 13 19. 5 A Five-Step Benchmarking Process © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 14 © 2016 Cengage ... financial performance 19in part © 2016 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or 19 © 2016 Cengage Learning... scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 19. 3 Hierarchical and Decentralized Methods of Control © 2016 Cengage Learning All Rights Reserved... scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 10 19. 4 Which Countries Have the Most Secretive Economies? © 2016 Cengage Learning All Rights Reserved