Management-Leading & Collaborating in a Competitive World–Chapter 16

accounting audits
procedures used to verify account reports and statements
activity-based costing (ABC)
a method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities
assets
values of the various items the corporation owns
balanced scorecard
control system combining four sets of performance measures: financial, customer, business process, and learning and growth
balance sheet
a report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders’ equity
budgeting
the process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences; also called budgetary controlling
bureaucratic control
the use of rules, regulations, and authority to guide performance
clan control
control based on the norms, values, shared goals, and trust among group members
concurrent control
control process used while plans are being carried out, including directing, monitoring, and fine-tuning activities as they are performed
control
any process that directs the activities of individuals toward the achievement of organizational goals
current ratio
a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities
debt-equity ratio
a leverage ratio that indicates the company’s ability to meet its long-term financial obligations
external audit
an evaluation conducted by one organization, such as a CPA firm, on another
feedback control
control that focuses on the use of information about previous results to correct deviations from the acceptable standard
feedforward control
the control process used before operations begin, including policies, procedures, and rules designed to ensure that planned activities are carried out properly
internal audit
a periodic assessment of a company’s own planning, organizing, leading, and controlling processes
liabilities
the amounts a corporation owes to various creditors
management audit
an evaluation of the effectiveness and efficiency of various systems within an organization
management myopia
focusing on short-term earnings and profits at the expense of longer-term strategic obligations
market control
control based on the use of pricing mechanism and economic information to regulate activities within orgainizations
principle of exception
a managerial principle stating that control is enhance by concentrating on the exceptions to or significant deviations from the expected result or standard
profit and loss statement
an itemized financial statement of the income and expenses of a company’s operations
return on investment (ROI)
a ratio of profit to capital used, or a rate of return from capital
standard
expected performance for a given goal: a target that establishes a desired performance level, motivates performance, and serves as a benchmark against which actual performance is assessed
stockholders’ equity
the amount accruing to the corporation’s owners
transfer price
price charged by one unit for a good or service provided to another unit within the organization