Control Mechanisms at General Electric

1. Six Sigma is a management philosophy that sets objectives, collects data and analyzes results as a way to remove wasted expenses from its processes and help reduce the number of defective products produced. Six Sigma uses quality measures to strive for near perfection by eliminating errors and variables.

Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting 12.1 EyeMax Corporation . . Evaluation of Audit Differences

“The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure.” The Committee of Sponsoring Organizations of the Treadway Commission (COSO) published the Internal Control–Integrated Framework in 1992. As summarized above one can see the importance of the implementation of an effective control environment, as it sets the foundation for the other 4 components of internal control. The control environment is made up fundamental smaller components. The ones that were particularly relevant to BMIS are the use of board of directors and audit committee, management philosophy and operating style, and human resource policies and practices. If management doesn’t prioritize control, then the rest of the organization will not put precedence on following policies and procedures either. This was clearly evident at Bernard L. Madoff Investment Securities LLC (BMIS), and ultimately led to their downfall.

Kroger Co. holds management responsible for the company’s Internal Controls. With the participation of the chief executive Officer and the Chief Financial Officer, Kroger’s management conducted an evaluation of the effectiveness of the Internal Control for the company’s financial reporting. This evaluation was based on the framework and criteria established in Internal Control-Integrated Framework which was issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on the evaluation, the Kroger management concluded that the Company’s

Management must ensure control over each objective by maintaining and ensuring that performance does not veer away from standard. “Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary” (Web Books Publishing, 2010, para. 17). Performance measurement can be done in several different ways. There may be the use of financial statements, performance appraisals, customer satisfaction reports, or sales and production results. Two control techniques also

* Teams need to understand how they measure success. Will you be happy with net income to revenue percentage of 10% but a low customer satisfaction rating?

Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles

A quantitative study conducted by Lifvergren, Gremyr, Hellstrom, Chakhunashvili, and Bergman (2010) analyzed the experiences and from a hospital group during a three-year period after the introduction of Six Sigma. It reports on 22 large Six Sigma improvement projects, their results and influence on other improvement activities. The study shows that 75% of the completed projects reached their goals within 18 months. The average net cost savings per completed project/year was $55,300. Overall, the results showed that Six Sigma is a useful concept when trying to improve healthcare processes. They recommend that Six Sigma should be an addition to the improvement practices used in healthcare development initiatives. It was also observed that the Six Sigma program can create much organizational pull regarding quality management and improvement efforts if teamwork is applied.

Speak with clients regarding satisfaction. This gives the organisation another viewpoint to measure overall performance. A smiling face doesn't always translate into acceptable work practices. Including comment cards and setting up phone surveys can give customers an opportunity to address issues or give praise – very important for employees to perceive performance management as a way of acknowledging when their performance meets or exceeds established targets. Using this type of analysis can help ensure the organisation has a complete picture of employee performance.

| Measure: Surveys done to evaluate the whole morale in the working environment and their satisfaction. Feedback could also be approached, but anonymously. Target: Create a positive working environment that will be a proud part of BRF instead of their prior companies.

One way that GE ensures leaders play an active role in governance is by conducting regular annual review periods for key operating functions within the Company, including compliance, environment, health & safety, and people development. This allows GE to create a cycle of continuous improvement at the senior level and incorporate evolving best practices. These sessions provide a vital system of accountability and allow topical focus as needed through the year. They create a singular point of focus to surface any issues, review performance and disseminate new information.

The purpose of this paper is to analyze a case study related to issue of control and how organizations can utilize different approaches of control in order to improve quality and performance in all arenas, domestic and global. The focus of this case revolves around Lincoln Electric, an Ohio based company that has set the bar for how to develop and implement a successful management system. This paper will use the Lincoln Electric case analysis to present recommendations on how managers can use control methods to enhance employee performance, increase employee participation and empowerment, and improve organizational quality in

The concept of Six Sigma was developed in the early 1980’s at Motorola Corporation (Harry and Schroeder, 2000). Six Sigma can be defined as a statistical measure of the performance of a process or product (Kumi et. al., 2006). It is used as a quality control mechanism, which seeks to reduce defects or variations in a process to 3.4 per million opportunities thereby optimizing output and increasing customer satisfaction (Sambhe, 2012). Sigma is representing the standard deviation, a unit of measurement that designates the distribution or spread about the mean of a process (Six Sigma Academy, 2002). In addition, the Six Sigma uniquely driven by close understanding of customer needs, disciplined use of fact, data, and statistical analysis, and diligent attention to managing improving, and reinventing business processes (Pande, P., et. al. 2000). The Six Sigma methodology uses statistical tools to identify the factors that matter most for improving the quality of processes and generating bottom-line results. The Six Sigma DMAIC (Define, Measure,

In 1990’s Jack Welch launched Six Sigma in GE in a big way. He implemented Six Sigma in all areas and ensured that the entire organization participates in the initiative. He changed the performance incentives and made them based on individual’s ability and enthusiasm to take part in Six Sigma initiatives. He transformed GE to a state where Six Sigma had become the culture of the organization and not just a methodology for brining organization-wide improvements.

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include