Productivity is defined by the formula of outputs divided by ______ for a specified period of time.

the formula of outputs divided by inputs for a specified period of time

all the goods and services produced

not only labor, but also capital, materials, and energy

enterprise resource planning (ERP)

software systems, information systems for integrating virtually all aspects of a business

monitoring performance, comparing it with goals, and taking corrective action as needed

six reasons why control is needed

(1) to adapt to change and uncertainty, (2) to discover irregularities and errors, (3) to reduce costs, increase productivity, or add value, (4) to detect opportunities, (5) to deal with complexity, (6) to decentralize decision making and facilitate teamwork

(1) establish standards, (2) measure performance, (3) compare performance to standards, and (4) take corrective action, if necessary

or "performance standard" or "standard;" the desired performance level for a given goal; "what is the outcome we want?"

"what is the actual outcome we got?"

compare performance to standards

"how do the desired and actual outcomes differ?"

a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards

take corrective action, if necessary

"what changes should we make to obtain desirable outcomes?" Three possibilities: (1) make no changes, (2) recognize and reinforce positive performance, (3) take action to correct negative performance

strategic, tactical, and operational

monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed

monitoring performance to ensure that tactical plans - those at the divisional or departmental level - are being implemented and taking corrective action as needed

monitoring performance to ensure that operational plans - day-to-day goals - are being implemented and taking corrective action as needed

physical, human, informational, financial, structural, and cultural

an approach to organizational control that is characterized by use of rules, regulations, and formal authority to guide performance

an approach to organizational control that is characterized by informal and organic structural arrangements

gives top managers a fast but comprehensive view of the organization via four indicators: (1) customer satisfaction, (2) internal processes, (3) innovation and improvement activities, and (4) financial measures

a visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization

four mechanisms of success

(1) top executives agree on strategy, (2) communication is clear, (3) there is better focus and alignment, (4) the organizational culture emphasizes teamwork and allows risk taking

four barriers to effective measurement

(1) objectives are fuzzy, (2) managers put too much trust in informal feedback systems, (3) employees resist new measurement systems, (4) companies focus too much on measuring activities instead of results

formal financial projection

allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed

allocates resources on the basis of a single estimate of costs; "static budget"

allows the allocation of resources to vary in proportion with various levels of activity; "flexible budget"

a summary of some aspect of an organization's financial status

summarizes an organization's overall financial worth - that is, assets and liabilities - at a specific point in time

summarizes an organization's financial results - revenues and expenses - over a specified period of time

the practice of evaluating financial ratios

indicate how easily an organization's assets can be converted into cash

indicate the degree to which an organization can meet its long-term financial obligations

indicate how effectively an organization is managing its assets, such as whether it has obsolete or excess inventory on hand

ROI or ROA; indicate how effective management is in generating a return, or profit, on its assets

formal verifications of an organization's financial and operational systems

a formal verification of an organization's financial accounts and statement by outside experts

a verification of an organization's financial accounts and statements by the organization's own professional staff

proposed ideas for making organizations more responsive, more democratic, and less wasteful

principles of Deming management

(1) quality should be aimed at the needs of the consumer, (2) companies should aim at improving the system, not blaming workers, (3) improved quality leads to increased market share, increased company prospects, and increased employment, (4) quality can be improved on the basis of hard data, using the PDCA cycle

a pan-do-check-act cycle using observed data for continuous improvement of operations

total quality management (TQM)

a comprehensive approach - led by top management and supported throughout the organization - dedicated to continuous quality improvement, training, and customer satisfaction

two core principles of TQM

(1) people orientation - everyone involved with the organization should focus on delivering value to customers - and (2) improvement orientation - everyone should work on continuously improving the work process

focusing everyone on delivering customer value

to meet or solve a special or onetime problem

focusing everyone on continuously improving work processes

ongoing small, incremental improvements in all parts of an organization

enables customers to rate the quality of a service along five dimensions - reliability, assurance, tangibles, empathy, and responsiveness - each on a scale from 1 to 10

a process by which a company compares its performance with the best practices of high-performing organizations

the subcontracting of services and operations to an outside vendor

reduction in steps in a work process

consists of quality-control procedures companies must install - from purchasing to manufacturing to inventory to shipping - that can be audited by independent quality-control experts, or "registrars"

extends the concept, identifying standards for environmental performance

statistical process control

a statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability

a rigorous statistical analysis process that reduces defects in manufacturing and service-related processes

focuses on problem solving and performance improvement - speed with excellence - of a well-defined project

keys to successful control systems

(1) they are strategic and results-oriented, (2) they are timely, accurate, and objective, (3) they are realistic, positive, and understandable and they encourage self-control, (4) they are flexible

barriers to control success

(1) too much control, (2) too little employee participation, (3) overemphasis on means instead of ends, (4) overemphasis on paperwork, (5) overemphasis on one instead of multiple approaches

What is the definition of productivity outputs divided by inputs?

What is the term for the set of guidelines ethics or ideas that represent the most efficient or prudent course of action?

What is defined as the subcontracting of services and operations to an outside vendor?

What budget allocates increased or decreased funds to a department by using the last budget period as a reference point?