KEY TERMS – CHAPTER 18

controlling                                                       The process of monitoring, comparing, and correcting work performance.

market control                                                An approach to control that emphasizes the use of external market mechanisms to establish the control standards.

bureaucratic control                                       An approach to control that emphasizes organizational authority and relies on administrative rules, regulations, procedures, and policies.

clan control                                                     An approach to control in which employee behavior is regulated by the organization’s culture.

control process                                               A three-step process including measuring actual performance, comparing actual performance against a standard, and taking managerial action.

range of variation                                           The acceptable parameters of variance between actual performance and the standard.

immediate corrective action                          Corrective action that corrects problems at once to get performance back on track.

basic corrective action                                   Corrective action that looks at how and why performance deviated and then proceeds to correct the source of deviation.

performance                                                   The end result of an activity.

organizational performance                           The accumulated end results of all the organization’s work activities.

productivity                                                    The overall output of goods or services produced divided by the inputs needed to generate that output.

organizational effectiveness                          A measure of how appropriate organizational goals are and how well an organization is achieving those goals.

feedforward control                                        A type of control that takes place before a work activity is done.

concurrent control                                          A type of control that takes place while a work activity is in progress.

management by walking around                    A term used to describe when a manager is out in the work area interacting directly with employees.  

feedback control                                            A type of control that takes place after a work activity is done.

economic value added (EVA)                        A financial tool for measuring corporate and divisional performance, calculated by taking after-tax operating profit minus the total annual cost of capital.

market value added (MVA)                          A financial tool for measuring the stock market’s estimate of the value of a firm’s past and expected investment projects.

management information system (MIS)       A system used to provide management with needed information on a regular basis.

data                                                                 Raw, unanalyzed facts.

information                                                     Processed and analyzed data.

balanced scorecard                                        A performance measurement tool that looks at four areas—financial, customer, internal processes, and people/innovation/growth assets—that contribute to a company’s performance.

benchmarking                                                 The search for the best practices among competitors or noncompetitors that lead to their superior performance.

employee theft                                               Any unauthorized taking of company property by employees for their personal use.

service profit chain                                        The service sequence from employees to customers to profit.

corporate governance                                    The system used to govern a corporation so that the interests of corporate owners are protected.