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siby notes1 - Ex 18-1 Type of Control Market...

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Ex 18-1 Type of  Control Characteristics Market Uses external market mechanisms, such as price competition and relative  market shard, to establish standards used in system. Typically used by  organizations whose products or services are clearly specified and distinct  and that face considerable marketplace competition Bureaucratic Emphasizes organizational authority. Relies on administrative and  hierarchical mechanisms, such as rules, regulations, procedures, polices,  standardization of activities, well-defined job descriptions and budgets to  ensure that employees exhibit appropriate behaviors and meet performance  standards Clan Regulates employee behavior by the shared values, norms, traditions,  rituals, beliefs, and other aspects of the organization’s culture. Often used by  organizations in which teams are common and technology is changing  rapidly. Ex 18-2                                                                       Ex 18-3      The control process     Step 1 measuring actual performance .Step 2  Comparing actual performance Step 3 Indentify the cause. Step 4 takes  managerial action                                  Ex 18-9  Types of control Planning Goals Objectives Strategies Plans Organizing Structure Human  resource Management Leading Motivation Leadership Communication Individual and  group behavior Controlling Standards Measurements Comparison Actions Ex 18-4 Advantages Drawbacks Personal Observations Get firsthand knowledge Information isn’t filtered Intensive coverage of work Subject to personal  biases Time-consuming Obtrusive Statistical Reports Easy to visualize Effective for showing  relationships Provide limited  information Ignore subjective factors Oral reports Fast way to get information Allow for verbal and  nonverbal feedback Information is filtered Information can’t be  documented Written reports Comprehensive Formal Easy to file and retrieve Take more time to  prepare
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Input Processes Output Feedforward control Concurrent Control Feedback control Anticipates problems     Corrects problems as they happen     Corrects problems after they occurs  Ex 18-10 Objective Ratio Calculation meaning Liquidity Current ratio Acid test CA /CL CA less inventories/ CL Tests the organizations  ability to meet short term  obligations Tests liquidity more  accurately when  inventories turn over  slowly or are difficulty to  sell Leverage Debt to assets Times interest earned Total debt/TA Profits before interest and  taxes/total interest  charged The higher the ratio, the  more leveraged the  organization
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