Podcast
Questions and Answers
What is the term used to describe the ability to convert an asset to cash quickly?
What is the term used to describe the ability to convert an asset to cash quickly?
- Marketability (correct)
- Leverage
- Solvency
- Liquidity
What type of ratios measure the degree to which an organization's current assets are adequate to pay current liabilities?
What type of ratios measure the degree to which an organization's current assets are adequate to pay current liabilities?
- Profitability ratios
- Liquidity ratios (correct)
- Leverage ratios
- Solvency ratios
What is the term used to describe the extent to which an organization uses debt to finance investments?
What is the term used to describe the extent to which an organization uses debt to finance investments?
- Liquidity
- Leverage (correct)
- Solvency
- Profitability
What is the result of a high liquidity ratio?
What is the result of a high liquidity ratio?
What is the relationship between liquidity and marketability?
What is the relationship between liquidity and marketability?
What type of ratios assess the degree to which an organization is able to meet its long-term obligations?
What type of ratios assess the degree to which an organization is able to meet its long-term obligations?
What is the primary focus of feedforward control?
What is the primary focus of feedforward control?
What is the function of checkpoints in concurrent control?
What is the function of checkpoints in concurrent control?
What is the primary concern of feedback control?
What is the primary concern of feedback control?
What is the purpose of supervision in concurrent control?
What is the purpose of supervision in concurrent control?
What is the primary characteristic of a cybernetic control system?
What is the primary characteristic of a cybernetic control system?
What is the function of multiple control systems?
What is the function of multiple control systems?
What is the primary advantage of feedforward control?
What is the primary advantage of feedforward control?
What is the role of feedback control in the planning process?
What is the role of feedback control in the planning process?
What is the primary characteristic of a non-cybernetic control system?
What is the primary characteristic of a non-cybernetic control system?
What is the primary purpose of planning in the control process?
What is the primary purpose of planning in the control process?
What is the outcome of comparing actual behavior and results against standards?
What is the outcome of comparing actual behavior and results against standards?
What is organizational productivity measured by?
What is organizational productivity measured by?
What is the purpose of evaluating and taking action in the control process?
What is the purpose of evaluating and taking action in the control process?
What is the primary role of managers in the control process?
What is the primary role of managers in the control process?
What is the purpose of monitoring ongoing organizational behavior and results?
What is the purpose of monitoring ongoing organizational behavior and results?
What is the relationship between organizational productivity and output?
What is the relationship between organizational productivity and output?
What is the primary purpose of inventory management?
What is the primary purpose of inventory management?
What type of ratio measures how effectively an organization manages its assets?
What type of ratio measures how effectively an organization manages its assets?
What is the term for the inputs needed to produce a finished product or good?
What is the term for the inputs needed to produce a finished product or good?
What is the result of transforming raw materials into a finished product or good?
What is the result of transforming raw materials into a finished product or good?
What type of ratio helps measure the management's ability to control expenses and earn profits?
What type of ratio helps measure the management's ability to control expenses and earn profits?
What is the term for raw materials that are being transformed into a finished product or good?
What is the term for raw materials that are being transformed into a finished product or good?
What is the primary objective of inventory management in terms of supply and demand?
What is the primary objective of inventory management in terms of supply and demand?
What type of ratio is used to measure the profitability of a company?
What type of ratio is used to measure the profitability of a company?
What is a potential concern in the use of monitoring and control technologies across different countries?
What is a potential concern in the use of monitoring and control technologies across different countries?
What is a primary goal of controlling customer interactions?
What is a primary goal of controlling customer interactions?
What is the primary function of the Board of Directors (BOD) in corporate governance?
What is the primary function of the Board of Directors (BOD) in corporate governance?
What is the result of overcontrol in the workplace?
What is the result of overcontrol in the workplace?
What is the primary purpose of the service profit chain?
What is the primary purpose of the service profit chain?
What is a characteristic of effective control in the workplace?
What is a characteristic of effective control in the workplace?
What is a key aspect of corporate governance?
What is a key aspect of corporate governance?
What is a consequence of undercontrol in the workplace?
What is a consequence of undercontrol in the workplace?
Study Notes
Liquidity
- Liquidity is characterized by a high level of trading activity
- Liquid assets can be easily bought or sold
- Liquidity is often calculated by using liquidity ratios
Liquidity Ratios
- Measure the degree to which an organization’s current assets are adequate to pay current liabilities
- Current Ratio
- Acid Test Ratio
- Leverage or debt management ratios assess the extent to which an organization uses debt to finance investments and meet long-term obligations
Types of Control According to Timing
Feedforward Control
- Also called preliminary control, precontrol, preventive control, or steering control
- Focuses on regulating inputs to ensure they meet standards necessary for the transformation process
- Emphasizes preventing problems before they arise
- Concern: Input
Concurrent Control
- Also called screening or yes-no control
- Involves regulating ongoing activities to ensure they conform to organizational standards
- Checkpoints are in place to determine whether to continue the process, take corrective action, or stop work altogether
- Corrects problems as they happen
- Concern: Processes
Feedback Control
- Regulation exercised after the product has been completed to ensure it meets organizational standards and goals
- Serves as a final means to check for deviations not detected earlier
- Provides information that will facilitate the planning process
- Provides information regarding employee performance
- Concern: Output
Other Control Systems
- Multiple Control System uses two or more of the feedforward, concurrent, and feedback control processes
- Cybernetic control system is a self-regulated control system that can automatically monitor situations and take corrective action when needed
- Non-cybernetic control system relies on human discretion as a basic part of the control process
The Traditional Control Model
- Establish standards
- Monitor ongoing organizational behavior and results
- Compare actual behavior and results against standards
- Evaluate and take action
Measures of Organizational Performance
- Organizational productivity is the overall output of goods and services produced divided by the inputs needed to generate that output
- Can be measured based on Output (e.g. sales revenue) and Input (e.g. labor hours)
- Debt to Asset Ratio
- Times Interest Earned
- Activity or asset management ratios measure how effectively an organization manages its assets
- Inventory turnover
- Total asset turnover
- Profitability helps measure the management’s ability to control expenses and earn profits
- Profit margin on sales
- Return on investment
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Description
Learn about non-cybernetic control systems, which rely on human discretion as a basic part of the control process. Understand the traditional control model and its application in management.
