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any process that directs the activities of individuals toward the achievement of organizational goals
control
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what are the types of control
bureaucratic, market, clan control
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uses formal rules, standards, hierarchy, and legitimate authority. Works best where task are certain and workers are independent
bureaucratic control
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Uses price, competition, profit centers, and exchange relationships. Works best where tangible output can be indentified and market can be established between parties
market control
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involves culture, shared values, beliefs, expectations, and trusts. Works best where there is "no one best way" to do a job and employees are empowered to make decisions.
clan control
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designed to measure progress toward a set performance goals, to apply corrective measures to ensure that performance achieves managers' objectives
bureaucratic control systems
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steps in the control cycle
- 1. setting performance standard
- 2. measuring performance
- 3. comparing performance with standard
- 4. taking corrective actions to correct problems and reinforce success
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what are the approaches to bureaucratic control
six sigma (a process is producing fewer than 3.4% defects per million units; operating at 99.99% of accuracy) , feedback control (used before operations begin including policies, procedures, and rules to ensure that planned activities are carried out properly), concurrent control (used while plans are being carried out including directing, monitoring, and fine-tuning activities as they are performed), feedforward control ( focuses on the use of information about previous results to correct deviations from acceptable standard)
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What is the downside of bureaucratic control
rigid bureaucratic behavior, tactical behavior, resistance control
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itemized financial statement of the income and expenses of a company's operations
profit and loss statement
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a leverage ration that indicated a company's ability to meet its long-term financial obligations
debt-equity ratio
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a ratio of profit to capital used, or rate of return from capital
ROI
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focusing on short-term profits at the expense of longer-term strategic obligations
marketing myopia
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How to design effective control system
establish effective control system, provide adequate information to employees, ensure acceptability to employees, maintain open communications, use multiple approaches
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define: control system combining 4 set of performance measure _____
balance scorecard: financial, customer, business process, learning and growth
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expected performance for a given goal; a target establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed
standard
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performance standards can be set with respect to the following:
quality, quantity, cost, time used
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how to do the step 2 in the control cycle
written reports, oral reports, personal information (must be timely information)
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a managerial principle stating that control is enhanced by concentrating on the exceptions to or significant deviations from the the expected result or standard
principle of exception : step 3 (managers should concentrate to the things they know and put their abilities to use)
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