15: The Essentials of Control
- Page ID
- 24381
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 15.1: The Essentials of Control
- This page discusses organizational control, crucial for managers to ensure performance aligns with expectations. It explores control levels, types, and forms, including financial and non-financial controls, lean systems, and the Balanced Scorecard. The chapter highlights two main functions of organizational controls: evaluating strategy effectiveness and providing early warnings for plan deviations, emphasizing their importance in the planning-organizing-leading-controlling (P-O-L-C) framework.
- 15.2: Case in Point: Newell Rubbermaid Leverages Cost Controls to Grow
- This page outlines Newell Company's evolution from a curtain rod manufacturer in the 1950s to a diversified household goods producer through strategic acquisitions. The company's growth strategy focused on restructuring businesses with strong financial controls and cost management, prioritizing profitability. The notable acquisition of Rubbermaid in 1999 strengthened its market position, leading to Newell Rubbermaid being recognized as a top admired company in its sector by 2010.
- 15.3: Organizational Control
- This page discusses organizational control within the P-O-L-C framework, highlighting its role in achieving goals through standards and corrective measures. While it can involve costs like reduced flexibility and potential cultural damage, the benefits include improved cost management, quality, and responsiveness. The text emphasizes the significance of effective performance measurement for tracking productivity and supporting strategic objectives.
- 15.4: Types and Levels of Control
- This page distinguishes between strategic and operational controls in organizations, detailing strategic controls' role in aligning with objectives and operational controls' focus on execution. It covers various control types, including financial and nonfinancial metrics.
- 15.5: Financial Controls
- This page outlines fundamental learning objectives on financial controls, including balance sheets, income statements, and cash flow statements. It stresses their importance for effective management and proactive decision-making. The content explains key financial concepts such as long-term debt, owner’s equity, and the distinction between assets and liabilities.
- 15.6: Nonfinancial Controls
- This page emphasizes the crucial role of nonfinancial controls in enhancing long-term profitability and financial performance in organizations. It highlights common pitfalls in their implementation, including misalignment with strategy, inadequate performance targets, and measurement issues. Authors Ittner and Larcker stress the importance of effective integration and careful application of these controls, along with best practices, to avoid mistakes and maximize organizational performance.
- 15.7: Lean Control
- This page discusses lean control, a business methodology focused on enhancing quality and reducing waste through five core principles. Originating from Toyota, it promotes optimizing resources by eliminating non-value-added activities (muda) and emphasizes customer value and seamless process flow. Despite widespread applications across industries, confusion remains due to differing interpretations.
- 15.8: Crafting Your Balanced Scorecard
- This page explains the Balanced Scorecard, a performance management tool that combines financial and nonfinancial metrics to assess organizational performance across four perspectives: financial, customer, internal processes, and learning and growth. It highlights the creation of strategy maps and personal Balanced Scorecards to align personal and professional goals, promoting holistic development.