Key Terms
Management control system
Structure allowing managers to establish, implement, and monitor progress toward strategic goals.
Single loop learning
Evaluates whether the organization is meeting current goals. Binary result - meeting or not meeting objectives.
Double loop learning
Evaluates whether goals are being met AND whether the goals themselves are still relevant/should be adjusted. Requires q
Lower-level management
Provides basic supervision and oversight for operations.
Centralization
Business structure in which one individual makes important decisions and provides primary strategic direction.
Decentralization
Business structure in which decision-making is made at various levels.
Daily decisions
Ongoing, immediate decisions made frequently to effectively and efficiently meet the needs of customers. Example: how ma
Strategic decisions
Made infrequently; involve long-term goals of the organization. Example: whether to pursue a cost leadership strategy, w
Cost leadership perspective
Companies eliminate costs to produce a product or service with a price advantage over competitors. Still provides qualit
Segment
A uniquely identifiable component of the business with sufficient similarities in product lines, locations, or customers
NOT categorized by
Number of employees.
Purpose of segments
Provide efficiency in decision-making and effectiveness in operational performance.
Organizational chart
Graphical representation of authority for decision-making and oversight.
CENTRALIZED CHART
All lines connect directly to the president. Every segment reports to one person.
DECENTRALIZED CHART
Same segments exist but lines pass through intermediate management layers (e.g., regional managers). The president has f