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60 Cards in this Set
- Front
- Back
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CHAPTER 7
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STARTS HERE
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Benchmarking
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The process of studying and adapting the best practices of other organizations to improve the firm's own performance and establish a point of reference by which internal performance can be measured.
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Benchmarking (performance gap)
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The gap between actual performance and the performance level of the organization that established the benchmark level of performance.
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Committed costs
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These costs that a company incurs before knowing actual production or sales volumes. Also known as capacity-related resources.
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Concurrent design and engineering
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A method that is used to help design costs out of the product before manufacturing begins.
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Control
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Refers to the set of procedures, tools, performance measures, and systems that organizations use to guide and motivate all employees to achieve organizational objectives.
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Cooperative benchmarking
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The voluntary sharing of information through mutual agreements.
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Cross-functional product teams
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Made-up of individuals representing the entire value chain, both inside and outside the organization, to guide the target-costing process.
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Database benchmarking
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A policy in which companies usually pay a fee and in return gain access to information from a database operator
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Environmental costing
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A costing system that computes to cost of the effects an organization has on the environment
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Group benchmarking
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A business alternative in which participants meet openly to discuss their methods
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In control
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Refers to a system that is on a path to achieving its strategic objectives
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Indirect/third-party benchmarking
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A technique that uses an outside consultant to act as a liaison among firms engaged in benchmarking
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Kaizen costing
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A costing system that focuses on reducing costs during the manufacturing stage of the total life cycle of a product.
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Management accounting and control system
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The larger entity of central performance measurement systems
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Manufacturing cycle
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Begun after the RD&E cycle, this cycle is one in which costs are incurred in the production of the product.
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Out of control
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A state when a system is not on a path to achieving organization objectives.
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Postsale service and disposal cycle
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The portion of the life cycle that begins once the first unit of a product is in the hands of the customer.
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Price-led costing
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With this approach, a target selling price and target product volume are chosen on the basis of the company's perceived value of the product to the customer.
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Quality function deployment (QFD) matrix
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A tool that is typically used for systematically arraying information about the variables of features, functions, and competitive evaluation in a matrix format
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Relevance of information
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How useful information is for an organization's decision and control processes.
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Research development and engineering cycle
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A life-cycle concept that involves market research, product design, and product development.
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Scope of the MACS
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Includes the entire value chain of the organization.
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Supply chain management
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A management system that develops cooperative, mutually beneficial, long-term relationships between buyers and sellers
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Target cost
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The difference between the target selling price and the target profit margin.
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Target costing
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A method of cost planning used during the planning cycle to reduce manufacturing costs to targeted levels.
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Total-life-cycle costing
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Describe the process of managing all costs during a product's lifetime.
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Unilateral (convert) benchmarking
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A process inwhich companies independently gather information about one or several other companies that excel n the area of interest.
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Value engineering process
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The process of examining each component of a product to determine whether its cost can be reduced while maintaining functionality and performance.
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Value index
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This is the ratio of the value of a component to a customer and the percentage of total cost devoted to each component.
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CHAPTER 8
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STARTS HERE
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Balanced Scorecard
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A strategic management system that translates an organization's strategy into clear objectives, measures, targets, and initiatives organized by four perspectives.
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Cash bonus
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A payment method that pays cash based on some measured performance, Also called lumpsum reward, pay for performance, or merit pay.
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Data Falsification
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The process of knowingly altering company data in one's favor
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Diagnostic control systems
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Formal information systems that managers use to monitor organizational outcomes and correct deviations from standard measures of performance.
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Earnings management
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Methods by which managers knowingly manipulate the reporting of income.
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Employee self-control
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A managerial method in which employees monitor and regulate their own behavior and perform to their highest levels.
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Ethical control system
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A management control system based on ethics used to promote ethical decision making.
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Extrinsic rewards
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Rewards that are given by one person to another a recognize a job well done. Examples include: money, recognition in a corporate newsletter, stock options, or congratulations.
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Gain sharing
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A system for distributing cash bonuses from a pool when the total amount available is a function of performance relative to some target.
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Gaming the performance indicator
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An activity in which an employee may engage in dysfunctional behavior to achieve a single goal.
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Goal congruence
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The outcome when managers'and employees' goals are aligned with organizational goals.
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Human relations movement
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A managerial movement that recognizes that people have needs well beyond performing a simple repetitive task at work and that financial compensation is only one aspect of what workers desire.
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Human resources model of motivation
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A more contemporary managerial view that introduces a high level of employee responsibility for and participation in decisions in the work environment.
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Improshare
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A gainsharing program that determines its bonus pool by computing the difference between the target level of labor cost given the level of production and the actual labor cost.
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Incentive compensation
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Reward system that provides monetary rewards based on measured results. Also called pay-for-performance systems.
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Interactive control systems
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Formal information systems mangers use to involve themselves regularly and personally in the decision activities of subordinates.
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Intrinsic rewards
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Those rewards that come from within an individual and reflect satisfaction from doing the job and the opportunities for growth that the job provides.
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Monitoring
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Inspecting the work or behavior of employees while they are performing a task.
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Motivation
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An individual's interest or drive to act in a certain manner.
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Pay-for-performance systems
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Reward system that provides monetary rewards based on measured results. Also called incentive compensation.
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Prevention control
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An approach to control that focuses on preventing an undesired event.
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Profit sharing
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A cash bonus calculated as a percentage of an organization unit's reported profit; a group incentive compensation plan focused on short-term performances.
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Results control
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The process of hiring qualified people who understand the organization's objectives, telling them to do whatever they think best to help the organization achieve its objectives, and using the control system to evaluate the resulting performance, thereby assessing how well they have done.
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Rucker plan
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A form of gainsharing program.
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Scanlon plan
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A form of gainsharing program.
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Scientific management school
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A management movement with the underlying philosophy that most people find work objectionable, that people care little for making decisions or showing creativity on the job, and that money is the driving force behind performance.
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Smoothing
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The act of affecting the preplanned flow of information without altering actual behavior.
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Stock Option
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The right to purchase a unit of the organization's stock at a specified price, called the option price.
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Task control
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The process of developing standard procedures that employees are told to follow.
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