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Chapter 7
Organizational & Operational Control
| Term | Definition |
|---|---|
| ABC Classification | An inventory categorization system that optimizes inventory control by drawing management's attention to the most critical items according to annual consumption volume |
| Acceptance Sampling | A quality control tool used to predict product quality of a batch of raw materials or products by inspecting a random sample size for defects |
| Bar-code Technology | An optical, machine-readable representation of data that allows inventory to be recognized for automatic identification and data capture |
| Behavior Controls | Actions that shape employee behavior and motivate employees to work within an organization's structure |
| Bureaucratic Control | A comprehensive system of control comprised of rules and SOPs that shape and regulate the behavior of divisions, functions, and employees |
| Clan Control | The set of shared values, expectations, traditions, and norms that guide employee attitudes and behaviors to increase organizational performance |
| Concurrent Control | Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise |
| Control Chart | A graph that shows process changes over time and displays variances in output quality from what is expected |
| Control Systems | Formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organization's strategy and structure are working |
| Cost Control | The practice of monitoring and evaluating operating expenses in an effort to reduce costs and increase profits |
| Direct Supervision | The active monitoring and observation of subordinate behavior by a manager |
| Economic Order Quantity (EOQ) | The optimum order quantity that an organization should hold in inventory to minimize the costs associated with ordering, shipping, and holding a product |
| Enterprise Resource Planning (ERP) | The computer based integration of core buisness processes that can include purhcasing, production, planning, inventory management, shipping and delivery, and marketing and sales |
| Feeback Control | Control that gives managers information about customers' reactions to goods and services so corrective action can be taken if necessary |
| Feedforward Control | Control that allows managers to anticipate problems before they arise |
| Fixed Costs | Operating costs that remain relatively constant regardless of the level of production or service provided |
| Flowchart | A step-by step, visual representation of a process sequence that is used to identify a problem or decision points in a process |
| Histogram | A type of bar graph that shows a distribution of variables and the significance of the occurence of specific data |
| Inventory | The raw materials, work-in-process, and finished goods that are part of an organization's assets and are or will be offered for sale |
| ISO 14000 | A set of voluntary, international standards for environmental management |
| ISO 9000 | A set of international standards for quality management and quality assurance developed to help companies effectively document the elements of an efficient system |
| Just-in-time Inventory (JIT) | An inventory control system that attempts to eliminate waste by scheduling inventory to arrive and depart just as it is needed or on demand |
| Kaizen | A Japanese management philosophy for continuous quality improvement where all employees are responsible for identifying gaps and inefficiencies in existing processes and implementing continuous, incremental improvements |
| Lead Production | The relentless pursuit to eliminate waste from production and services, while ensuring quality |
| Management by Objectives | A formal system of managing subordinates based on their ability to achieve specific organizational goals, performance standards, or budget figures |
| Material Requirement Planning (MRP) | A computer-based production planning, scheduling, and inventory control system used to manage inventories so that the right amount is delivered to the right place at the right time |
| Operations Control | The process of monitoring, influencing, and regulating business activities at the operational level |
| Organizational Control | The process of monitoring, influencing, and regulating organizational divisions, functions, and employees at strategic and tactical levels to accomplish and organization's goals |
| Output Controls | Measurable performance results at the corporate, divisional, functional, and individual employee levels of an organization |
| Pareto Analysis | A type of histogram that focuses attention on the most important problem areas rather than all problems, both large and small |
| Process Quality | The quality of a product or service "in production" |
| Product Quality | The quality of the inputs and outputs of a system |
| Quality Assurance | A systematic process of building in quality for products and services |
| Quality at the Source (QATS) | A philosophy for quality improvement that makes each employee accountable for the quality of their work |
| Quality | The ability of a product or service to consistently meet or exceed specifications or standards |
| Rules | Short, written or verbal descriptions of required actions or behaviors within an organization |
| Safety Stock | The level of extra stock that is maintained by an organization as insurance against stockouts (items out of stock) caused by unexpected changes in supply and demand |
| Scatter Diagram | A graph that shows if a relationship exists between a pair of numerical data |
| Six Sigma | A data-driven approach to eliminating defects in business processes |
| Standard Operating Procedures (SOPs) | Formal, written instructions that outline a detailed set of steps to complete a task |
| Stratification | A technique used in combination with other data analysis tools that separates the data so that patterns can be seen |
| Stretch Goals | Goals that challenge a manager's ability but are not impossible to attain |
| Total Quality Management (TQM) | A management philosophy that involves all employees of an organization in a continuous effort to improve quality and achieve customer satisfaction |
| TQM Check Sheet | A document used for collecting data in real-time at the location where the data is generated |
| Variable Costs | Operating costs that change in relation to the level of production or service provided |
| 4 Steps of the Control Process | Step 1: Establish Standards of Performance Step 2: Measure Actual Performance Step 3: Compare actual performance against standards Step 4: Evaluate Actual performance and take action if needed |
| Profit Ratios | Measure how efficiently managers are using the organization resources to generate profits |
| Liquidity Ratios | Measure how well managers have protected organizational resources to be able to meet short-term obligations |
| Leverage Ratios | Measure the degree to which managers use debt or equity to finance ongoing operations |
| Activity Ratios | Show how well managers are creating value from organizational assets |
Created by:
aferrari11
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