eman 003 control systems

7/31/2019 Eman 003 Control Systems

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CONTROL SYSTEMS


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IntroductionA critical task of managers is to control the

activities of their organization.

Controls are necessary to make sure anorganization is operating efficiently and in a

manner consistent with its intended strategy.


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Without adequate controls, control loss occurs

and the organizations performance will

suffer.


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Control systemManagement control is a systematic effort

to set performance standards with planning

objectives, to design information feedback systems, to compare actual performance with these

predetermined standards, to determine whether there are any deviations

and to measure their significance


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Control systemAnd to take any action required to assure that all

corporate resources are being used in the most

effective and efficient way possible inachieving corporate objectives.


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Within organizations, control can be viewed as

the process through which managers regulate

the activities of individuals and units so theyare consistent with the goals and standards of

the organization.

A key element in the control process isgenerating the right goals and standards.


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Standard is defined as a performance

requirement that the organization is meant to

attain on an on going basis.


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Types of organizational control There are three primary types of

organizational control:strategic control,

management control, and operational control.


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Strategic control, the process of evaluating

strategy, is practiced both after the strategy is

formulated and after it is implemented.Strategy is defined as long-term action plan for

achieving a goal


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Management control focuses on the

accomplishment of the objectives of the

various substrategies comprising the masterstrategy and the accomplishment of the

objectives of the intermediate plans (for

example, "are quality control objectives being

met?").


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Operational control is concerned individual

and group performance as compared with the

individual and group role as required byorganizational plans ( for example, "are

individual sales quota being met?").


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Each of these types of control is not a separate

and distinct entity and, in fact, may be

indistinguishable from others.Moreover, similar measurement techniques may

be used for each type of control.


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Strategic controlStrategic control is concerned with tracking the

strategy as it is being implemented, detecting

any problems areas or potential problemareas, and making any necessary adjustments.


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Steering control is to highlight some importantcharacteristics of strategic control.

Ordinarily, a significant time span occursbetween initial implementation of a strategyand achievement of its intended results.

During that time, numerous projects are

undertaken, investments are made, andactions are undertaken to implement the newstrategy.


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Strategic controls are necessary to steer the firm

through these events.

They must provide some means of correcting thedirections on the basis of intermediate

performance and new information.


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Operating ControlOperational control systems are designed to

ensure that day-to-day actions are consistent

with established plans and objectives.It focuses on events in a recent period.

Operational control systems are derived from the

requirements of the management controlsystem.


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Corrective action is taken where performance

does not meet standards.

This action may involve training, motivation,leadership, discipline, or termination.


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Differences Between Strategic

And Operational Control

The differences between strategic and

operational control are highlighted by

reference to a general definition ofmanagement control: "Management control

is the set of measurement, analysis, and

action decisions required for the timely

management of the continuing operation of

a process".


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Differences Between Strategic

And Operational Control: Measurement

Strategic control requires data from more

sources. The typical operational control

problem uses data from very few sources. Strategic control requires more data from

external sources. Strategic decisions are

normally taken with regard to the externalenvironment as opposed to internal operating

factors.


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Strategic control are oriented to the future. This is

in contrast to operational control decisions in which

control data give rise to immediate decisions that

have immediate impacts.

Strategic control is more concerned with

measuring the accuracy of the decision premise.

Operating decisions tend to be concerned with thequantitative value of certain outcomes


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Strategic control standards are based on external

factors. Measurement standards for operating

problems can be established fairly by past

performance on similar products or by similar

operations currently being performed.

Strategic control relies on variable reporting

interval. The typical operating measurement isconcerned with operations over some period of time:

pieces per week, profit per quarter, and the like.

eman 003 control systems

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