KEY TERMS – CHAPTER 18

controlling The process of monitoring, comparing, and

correcting work performance.

market control An approach to control that emphasizes the

use of external market mechanisms to
establish the control standards.

bureaucratic control An approach to control that emphasizes

organizational authority and relies on
administrative rules, regulations, procedures,
and policies.

clan control An approach to control in which employee

behavior is regulated by the organization’s
culture.

control process A three-step process including measuring

actual performance, comparing actual
performance against a standard, and taking
managerial action.

range of variation The acceptable parameters of variance

between actual performance and the
standard.

immediate corrective action Corrective action that corrects problems at

once to get performance back on track.

basic corrective action Corrective action that looks at how and why
performance deviated and then proceeds to
correct the source of deviation.

performance The end result of an activity.

organizational performance The accumulated end results of all the

organization’s work activities.

productivity The overall output of goods or services

produced divided by the inputs needed to
generate that output.

organizational effectiveness A measure of how appropriate

organizational goals are and how well an
organization is achieving those goals.
feedforward control A type of control that takes place before a
work activity is done.

concurrent control A type of control that takes place while a

work activity is in progress.

management by walking around A term used to describe when a manager is

out in the work area interacting directly with
employees.

feedback control A type of control that takes place after a

work activity is done.

economic value added (EVA) A financial tool for measuring corporate and
divisional performance, calculated by taking
after-tax operating profit minus the total
annual cost of capital.

market value added (MVA) A financial tool for measuring the stock
market’s estimate of the value of a firm’s
past and expected investment projects.

management information system (MIS) A system used to provide management with

needed information on a regular basis.

data Raw, unanalyzed facts.

information Processed and analyzed data.

balanced scorecard A performance measurement tool that looks

at four areas—financial, customer, internal
processes, and people/innovation/growth
assets—that contribute to a company’s
performance.

benchmarking The search for the best practices among

competitors or noncompetitors that lead to
their superior performance.

employee theft Any unauthorized taking of company

property by employees for their personal
use.

service profit chain The service sequence from employees to

customers to profit.
corporate governance The system used to govern a corporation so
that the interests of corporate owners are
protected.