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managing quality and performance

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  • 1. Managing Quality and Performance CHAPTER 13 0
  • 2. Learning Outcomes
    • Define organizational control and explain why it is a key management function.
    • Explain the benefits of using the balance scorecard to track performance and control of the organization.
    • Explain the four steps in the control process .
    • Discuss the use of financial statements, financial analysis , and budgeting as management controls .
    • Contrast the hierarchical and decentralized methods of control.
    • Identify the benefits of open-book management .
    • Describe the concept of total quality management and major TQM techniques, such as quality circles , benchmarking , Six Sigma principles , reduced cycle time , and continuous improvement .
    • Identify current trends in quality and financial control, including ISO certification , economic value-added and market value-added systems , activity-based costing , and corporate governance , and discuss their impact on organizations.
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 3. What Is Your Attitude Toward Control?
    • Managers must balance control with motivation and creativity
    • Managers control:
      • Work processes
      • Employee behavior
      • Financial resources
      • Profitability
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 4. The Meaning of Control
    • The systematic process of regulating organizational activities to meet expectations
      • Established plans
      • Targets
      • Standards
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 5. Choosing Standards and Measures
    • Common forms of control include financial performance
      • Sales
      • Revenue
      • Profit
    • There is a growing need to measure intangible aspects of performance
      • Customer Service
      • Customer Retention
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 6. The Balanced Scorecard
    • Comprehensive management control system that balances traditional financial measures with:
      • Customer Service
      • Internal Business Processes
      • Learning and Growth
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 7. Review the Scorecard Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 8. Steps of Feedback Control
    • Establish Standards of Performance
    • Measure Actual Performance
    • Compare Performance to Standards
    • Take Corrective Action
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 9. Feedback Control Model Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 10. Controlling and Budgeting
    • Budgets are reports that list planned and actual expenditures
    • Budget reports highlight the variance between budgeted and actual amounts
    • Budgets are created for all departments and divisions in an organization
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 11. Types of Budgeting
    • Expense Budget
    • Revenue Budget
    • Cash Budget
    • Capital Budget
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 12. Financial Control
    • Review performance and highlight potential problems
    • Most common financial statements
      • Balance Sheet
      • Income Statement or Profit & Loss Statement
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 13. Sample Financial Statements Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. Starting point for financial control 0
  • 14. Financial Analysis: Interpreting the Numbers
    • Managers need to be able to evaluate financial reports
    • Comparisons allow managers to see improvement and focus on competition
    • Ratios and statistics highlight relationships
    • Ratios are stated fractions or proportions
      • Liquidity, activity, profitability and leverage
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 15. Common Financial Ratios Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 16. The Changing Philosophy of Control
    • Hierarchical versus Decentralized Approaches
    • Open Book Management
    • Total Quality Management (TQM)
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 17. Hierarchical and Decentralized Methods Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 18. Open-Book Management
    • Information sharing
    • Teamwork
    • Encourage active participation
    • Commitment to goals
    • Open-book management allows employees to see for themselves—through charts, computer printouts, meetings, and so forth—the financial condition of the company
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 19. Total Quality Management
    • Total Quality Management (TQM) is a decentralized control philosophy
    • Infuse quality into every activity in a company through continuous improvement
    • Toyota is a good example of the results of TQM
    • TQM became attractive in the 1980s because of its success in Japan
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 20. International Opacity Index Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 21. TQM Techniques
    • Quality Circles
    • Benchmarking
    • Six Sigma
    • Reduced Cycle Time
    • Continuous Improvement
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 22. The Importance of Quality Improvement Programs Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 23. Quality Program Success Factors Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0
  • 24. Trends in Quality and Financial Control
    • International Quality Standards
    • New Financial Control Systems
    • Economic Value-Added (EVA)
    • Market Value-Added (MVA)
    • Activity-Based Costing (ABC)
    • Corporate Governance
    Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved. 0