Managing Quality and Performance

Managing Quality and Performance

1. "Doy mi palabra que he realizado esta actividad con integridad académica" Daft,R. (2008) Management. South-Western Cengage Learning. Ohio:E.U.A

2. Organizational control is the systematic process of regulating the organizational activities of a business to give them consistence to establish plans, targets and standards of performance.

3. The balanced scorecard is a comprehensive management control system that presents a balance of traditional financial measures and operational measures. It has four major perspectives:

   • Financial Performance- a concern of improving short as well as long-term financial performance.
   • Customer Service- measure things like customer's satisfaction.
   • Business Process- focus on production and operation statistics.
   • Potential for Learning and Growth- focuses on the well management of resources and human capital.

4. Feedback Control Model

   • Steps:
     • 1. Establish Standards of Performance
     • 2. Measure actual performance
     • 3. Compare performance to standards
     • 4. If Adequate: Do nothing or provide reinforcement. If Inadequate: Take corrective action
     • 5. Feedback after an adequate reinforcement to establish strategic goals
   • Application to budgeting.
     • Budgetary control is the process of setting targets for an organizations expenditures to monitor their results and compare them to the budget to make the necessary changes.
       • A budget must be established for very department.
         • An expense budget outlines the anticpated and actual expenses.
         • A revenue budget lists the forecasted and actual revenues.
         • The cash budget estimates daily or weekly expenses.
         • The capital budget lists planned investments in major assets.
     • A responsibility center is a department under the supervision of a single person.

5. Financial Control

   • Financial Statements provide the basic information used in financial control.
     • Blanace Sheet. It shows the firm's financial position on assets and liabilities.
     • Income Statement. Summarized the firm's financial performance of a given period.
     • Financial Analysis is needed to evaluate the statements and know the organization's performance.
       • A liquidity radio indicates the organization's ability to pay its debts.
       • An activity ratio measures performance internally (management activities).
       • A profitability ratio states the profits related to its source.
       • A leverage ratio measures the funding of activities with loans.

6. The Changing Philosophy of Control

   • Hierarchical control// It involved monitoring and influencing the behavior of employees through rules, policies, authority and other mechanisms.
   • Decentralized control// It is based on values and assumptions and rules aren't as used.
   • An Open-Book Management allows employees to see the organization's financial condition, it shows them how their job is essential for the big picture and ties employee rewards to the company's success.

7. Total Quality Management TQM

   • It is an organization effort to put quality into every single activity or operation.
     • Quality Circles, it's a group of volunteer employees who meet and discuss problems to solve them.
     • Benchmarking, it's the process of measuring products, services, and practices and comparing them to the toughest competitors.
     • Six Sigma, is a quality standard that specifies a goal no larger than 3.4 defects per million parts.
     • Reduced Cycle Time, they are the steps taken to complete a process of the company.
     • Continuous Improvement, or Kaizen, is the implementation of large number of small improvements.

8. Trends in Quality and Financial Control

   • International Quality Standards
     • ISO 9000
   • New Financial Control Systems
     • Economic Value-Added (to organizational activities)
     • Market Value-Added (measures stock market's value of a company's past investment projects)
     • Activity-Based Costing (allocates costs across processes)
     • Corporate Governance (system of governing where interests are protected)