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Mgmt221
Finals
| Question | Answer |
|---|---|
| Characteristics of Management Control System | Total System Monetary Standards Definite Pattern Coordinated System Line Managers Emphasis on Planning and Control (Tall Men Don't Complain Loudly Enough) |
| Informal Factors Influencing Goal Congruence | External Culture Leadership Informal Organization Perception & Communication (Every Culture Leads Informal People) |
| Types of Control | Cultural Personnel Input/Action Output/Results (Cats Prefer Inside Outside) |
| Elements of Control Process | Detector Assessor Communications network Effector (DACE) |
| Management Control Activities | Planning Coordinating Communicating Evaluating Deciding Influencing |
| Types of Responsibility Centers | Revenue Centers (sales unit) Expense/Cost Centers (production dep't) Profit Centers (hotel branch) Investment Centers (autonomous business division) (REcPI -> recipe for cooking) |
| Concept of Strategy | Strengths – internal advantages Weaknesses – internal limitations Opportunities – external favorable conditions Threats – external risks (SW internal, OT external) |
| Business Unit Missions | Build - increase market share Hold - protect market share Harvest - maximize short-term earnings Divest - withdraw from the business |
| Michael Porter's Five Forces Model | Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitutes Intensity of rivalry among existing competitors |
| Balanced Scorecard Perspectives | Financial Customers Internal Process Learning & Growth |
| Explain Agency Theory and its major problems. | Principal = owner Agent = manager Problems: Self-interest Information asymmetry Risk aversion (SIR) Solutions: Monitoring Incentive contracts Reward |
| Determinants of the Level of Compensation | Market (what OTHERS pay) Human Capital (what THIS PERSON brings - experience) Institutional (what THIS COMPANY is like - culture) (MHI) |
| What is goal congruence? Why is it important in management control? | Goal congruence means that the goals of individ members should be consistent with the goals of the org. Self-interest aligned with org's best interests. It is important because employees may make decisions that benefit themselves but harm the org. |
| What is goal congruence? Why is it important in management control? Example | Example: A sales manager should not offer excessive discounts simply to meet a personal sales target if doing so significantly reduces company profitability |
| Differentiate formal and informal factors influencing goal congruence. | Formal factors are structured & usually documented mechanisms, such as the MCS, rules, SOPs. Informal factors arise from people & relationships & are not necessarily documented. These include ECLIP |
| Differentiate Strategy Formulation, Management Control, and Task Control. | Strategy Formulation: Creative & analytic, Long-term, Goals & strategies Management Control: Administrative & persuasive, Short-term, Strategy implementation Task Control: Routine or mechanical, Daily, Tasks carried out effectively & efficiently |
| Differentiate efficiency and effectiveness. | Efficiency refers to the relationship between output & inputs, or achieving output using resources effectively. Effectiveness refers to how much an organization's output contributes to achieving its objectives. |
| Differentiate efficiency and effectiveness. Give an example. | Example: A marketing campaign that greatly increases customer awareness may be effective because it achieves its objective, even if it is not the most efficient use of resources. Ideally, a responsibility center should be both efficient and effective. |
| What are the two levels of strategy? Explain each. | Corporate-level strategy – determines which industries the orga should compete in and how its business units should be coordinated. Business-unit-level strategy – determines the mission of BU & how it will compete to achieve competitive advantage. |
| Differentiate Strategy Formulation and Strategic Planning | Strat formulation -process of deciding org goals & developing strategies to achieve them. Creative, innovative, & unsystematic. Strat planning determines how strategies will be implemented through programs and activities. Systematic & follows procedures. |
| What are the characteristics of a budget? | Expressed mostly in monetary units Short-term Senior management must participate and approve it. Actual results must be compared with the budget. Variances should be investigated to determine whether corrective action is necessary. |
| Differentiate Top-Down and Participative Budgeting. | Top-down - prepared by senior mgmt w/ limited input from lower levels. Less accurate since lower-level have more opns info. Participative - gathers information from lower and middle management then submit upward. Better use of info but time-consuming. |
| Differentiate Leading and Lagging Indicators. Give examples. | Leading indicators measure activities that can influence future performance. They are forward-looking. Ex: Employee development Lagging indicators measure the results of activities that have already occurred. Backward-looking. Ex: Profit |
| Differentiate TQM and Six Sigma. | Total Quality Mgmt is broad, continuous, & culture-driven to quality improvement. Six Sigma is more structured & statistical methodology focused on reducing defects and improving processes. |
| What are the characteristics of good performance measures? | Simple Easy to understand Easy data collection Timely Clearly presented Not excessive Should lead to action Actual vs expected comparison |
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