Business Management and Organization

Yes, because it saves time and yet keeps the information flowing through the team.

When properly designed, controls lead to better performance by enabling the organization to
execute its strategy better.

1. Establish standards
2. Measure performance
3. Compare performance to standards

Financial costs – direct and indirect
Culture and reputation costs – intangible costs associated with any form of control.
Responsiveness costs – downtime between a decision and the actions required to implement it.
Poorly implemented controls – implementation is poor.

Cost and productivity control – ensures that the firm functions effectively and efficiently

Quality control – contributes to cost control and greater sales

Opportunity recognition – helps managers identify and isolate the source of positive surprises,
such as new market growth.

Manage uncertainty and complexity – keeps the organization focused on its strategy.

Decentralized decision making – allows the organization to be more responsive by moving
decision making to those closest to customers.

Strategic controls make sure that your ship is going in the right direction, while operating
controls make sure that the ship is in good condition before, during and after the voyage.

Strategic control makes sure to track the strategy as it is being implemented, detecting any
problems, and making necessary adjustments. Operation control, on the other hand, is
concerned with executing the strategy.

Major sub-systems of the organization such as business units, projects, products etc.

Feedback controls involve gathering information about a completed activity, evaluating that
information, and taking steps to improve similar activities in the future. It is necessary because
it allows managers to use information on past performance to bring future performance in line
with planned objectives.

Outcome controls are generally preferable when just one or two performance measures are
good measures on business health. Behavioral controls involve the direct evaluation of
managerial and employee decision making.

Financial controls involve the management of a firm’s costs and expenses to control them in
relation to a budgeted amount. Non-financial controls track aspects of the organization that
aren’t immediately financial in nature but are expected to lead to positive performance
outcomes. Financial controls are outcome controls.

Main difference between assets and liabilities is that assets provide a future economic benefit
while liabilities present a future obligation.

The balance sheet is a snapshot of the organizations financial position in a given point in time.
Income statements show the results of the organizations operations such as revenues,
expenses, profit, and loss. All the operations of the organization are transferred to the balance
sheet.

It helps the company determine whether the company has a positive or negative cash flow.

Are defined as controls where nonfinancial performance is measured. Examples are HR,
Marketing, Production, Purchasing etc.

The relationship should be indirect. Nonfinancial outcomes should cascade down to financial
performance.

Not using non-financial controls.
Not linked to strategy.
Failing to validate the links.
Failing to set appropriate performance targets.
Measurement failure.

Use non-financial controls.
Tie the controls to the strategy.
Validate the links between non-financial and financial controls.
Set appropriate performance targets.
Validate performance measures.

Is a system of non-financial controls used to improve product and service quality and decrease
waste.

Muda means a wasteful activity in all business operations which don’t add value. Some
examples are defects, overproduction, waiting etc.

1. Define value for the customer perspective
 a. Managers must identify how each specific product meets specific customer
 needs.
2. Describe the value stream for each product or service.
 a. Set of activities that a business is performing to bring a finished product to a
 customer.
3. Create flow in each value stream.
 a. Arrange the remaining activities sequentially so that products will move
 smoothly from one activity to the next.
4. Produce at the pace of actual customer demand.
 a. Reduced lead times and increased flexibility means the organization can respond
 to customer demand.
5. Strive to continuously improve all business operations.
 a. Conduct kaizen events.

BS is a control system that translates an organizations vision, mission, and strategy into specific,
quantifiable goals and to monitor the organizations performance in terms of achieving these
goals.

1. Top managers à responsible for developing the organizations strategy.
2. Functional managers à responsible for efficiency and effectiveness of an area.
3. Team managers à responsible for coordinating a subgroup.
4. Line managers à leads a function that constitutes to the products the org. creates.
5. Staff managers à leads a function that creates indirect inputs.
6. Project managers à responsible for planning, executing and closing projects.
7. General managers à responsible for managing a revenue producing unit.

3 Groups:
1. Interpersonal:
 a. Figure head: represents the organization in all matters of formality. 
 b. Liaison: interacts with people outside the organization.
 c. Leader: defines relationships between managers and employees.
 2. Informational:
a. Monitor: manager receives and collects information.
b. Dissemmator: manager transmits special information to the organization.
c. Spokesperson: manager transmits organizations information into the
environment.
3. Decisional:
a. Entrepreneur role: manager initiates change.
b. Disturbance handler: manager deals with the threats to an organization.
c. Negotiator role: manager negotiates on behalf of the organization.
d. Resource alocator role: decide where to allocate resources

1. Interpersonal: ensure information is provided
2. Decisional: make use of information
3. Informational: link all managerial work together

POLC

Planning, organizing, leading and controlling.

Social and informal sources of influence that you use to inspire action by others. (Mobilizing
others to struggle towards a common goal).

Recognition of opportunities and use of resources to implement innovative ideas for new
ventures.

How the organization will achieve its objectives.

1. Leadership is about who helps in leading the organization.
2. Entrepreneurship is about the what is the purpose of the organization.
3. Strategy is about how the right choices are made.

1. Planning:
 a. Vision and mission.
 b. Strategizing.
 c. Goals and objectives.
2. Organizing:
 a. Organizational design.
 b. Culture.
 c. Social networks.
3. Leading:
 a. Leadership.
 b. Decision making.
 c. Communications.
 d. Group/Teams.
e. Motivation.
4. Controlling:
 a. Systems/Processes.
 b. Strategic Human Resources.

Planners must:
1. Establish objectives.
2. Identify alternative courses for action for achieving objectives.
3. Evaluate success of plans.

Management that involves the developing of an organizational structure and allocating human
resources to ensure the accomplishment of objectives.

Involves the social and informal sources of influence that you use to inspire action taken by
others.

Ensuring that performance does not deviate from standards. It consists of three steps:
1. Establishing performance standards.
2. Comparing actual performance against standards.
3. Taking corrective action when necessary.

Because it determines the success of producing benefits for the owners of the organization.

social, environmental

Organizations consider the interests of society by taking responsibility of their activities on
communities, employees, and the environment.

It depends how the customers perceive the CSR practices undertaken by the organization. If the
customers perceive that the products and services are environmentally friendly for example
they might pay premium prices for these products of services.

Things you must do in your job.

Things that add value but are not part of the job description.