management control powerpoint

7/27/2019 Management Control Powerpoint

1/29

Controlling Reporter:

Lourdes C. Esberto

1


2/29

Controlling as a Management Function

What is Controlling?

Controlling consists of verifying whether everything occurs inconformities with the plans adopted, instructions issued and principlesestablished. It ensures that there is effective and efficient utilization of

organizational resources so as to achieve the planned goals. Thismeasures the deviation of actual performance from the standardperformance, discovers the causes of such deviations and helps intaking corrective actions

According to Brech, Controlling is a systematic exercise which is

called as a process of checking actual performance against thestandards or plans with a view to ensure adequate progress and alsorecording such experience as is gained as a contribution to possiblefuture needs.

According to Donnell, Just as a navigator continually takes reading

to ensure whether he is relative to a planned action 2


3/29

Controlling as a Management

FunctionControlling

Done well, it ensures that the overalldirections of individuals and groupsare consistent with short and longrange plans.

It helps ensure that objectives andaccomplishments are consistent withone another throughout an

organization. 3


4/29


Function

Controlling

It helps maintaincompliance with

essential organizationalrules and policies.

4


5/29


FunctionCybernetic Control System

One that is self-contained in itsperformance monitoring andcorrection capabilities. (thermostat)

The control process practiced inorganizations is not cybernetic, but itdoes follow similar principles.

5


6/29

The Control ProcessEstablish objectives and

standards.Measure actual performance.

Compare results with objectivesand standards.

Take necessary action.6


7/29

Establish Objectives and Standards

The control process begins with

planning and the establishment ofperformance objectives.

Performance objectives are definedand the standards for measuringthem are set.

7


8/29

Establish Objectives and Standards

There are two types of standards:

Output Standards - measuresperformance results in terms ofquantity, quality, cost, or time.

Input Standards - measures workefforts that go into a performance

task. 8


9/29


10/29

Comparing Results with Objectives

and Standards

The comparison of actual performance

with desired performance establishesthe need for action.

Ways of making such comparisonsinclude:

Historical / Relative / Engineering

Benchmarking 10


11/29

Taking Corrective Action

Taking any action necessary tocorrect or improve things.

Management-by-Exception focuses

managerial attention on substantialdifferences between actual anddesired performance.

11


12/29

Taking Corrective Action

Management-by Exception can savethe managers time, energy, andother resources, and concentratesefforts on areas showing thegreatest need.

There are two types of exceptions:

Problems - below standard

Opportunities - above standard 12


13/29

Effective ControlsThe Best Controls in Organizations

areStrategic and results oriented

UnderstandableEncourage self-control

13


14/29

Effective ControlsThe Best Controls in Organizations

areTimely and exception oriented

Positive in natureFair and objective

Flexible 14


15/29

Types of ControlPreliminary

Sometimes called the feedforwardcontrols, they are accomplishedbefore a work activity begins.

They make sure that properdirections are set and that the rightresources are available to accomplish

them. 15


16/29

Types of ControlConcurrent

Focus on what happens during thework process. Sometimes calledsteering controls, they monitor

ongoing operations and activities tomake sure that things are being donecorrectly.

16


17/29

Types of Control

PostactionSometimes called feedbackcontrols, they take place after an

action is completed. They focuson end results, as opposed toinputs and activities.

17


18/29

Types of ControlsManagers have two broad options withrespect to control.

They can rely on people to exercise self-control (internal) over their ownbehavior.

Alternatively, managers can take directaction (external) to control the

behavior of others. 18


19/29

Types of ControlInternal Controls

Allows motivated individuals to exerciseself-control in fulfilling job expectations.

The potential for self-control is

enhanced when capable people haveclear performance objectives andproper resource support.

19


20/29

Types of ControlExternal Controls

It occurs through personal supervisionand the use of formal administrativesystems.

Performance appraisal systems,compensation and benefit systems,employee discipline systems, and

management-by-objectives. 20


21/29

Organizational Control SystemsManagement ProcessesStrategy and objectives

Policies and proceduresSelection and trainingPerformance appraisalJob design and work structuresPerformance modeling, norms, and

organization culture

21


22/29

Organizational Control SystemsCompensation and Benefits

Attract talented people andretain them.Motivate people to exert

maximum effort in theirwork.Recognize the value of their

performance contributions. 22


23/29

Organizational Control SystemsEmployee DisciplineDiscipline is defined as influencing

behavior through reprimand.Progressive Discipline ties

reprimand to the severity and

frequency of the employeesinfractions.Positive Discipline tries to involve

people more positively and directly

in making decisions to improve theirbehavior. 23


24/29

The Hot Stove Rule

ImmediateFocus on

activity notpersonality

Consistent

InformativeOccur in a

supportivesetting

Support

realistic rules 24

To be Effective Discipline Should be:


25/29

Organizational Control SystemsInformation and FinancialActivity-based costing - the true

cost of all products and services.Economic value added - examine

the value added by all activities.

Understand the implication of keyfinancial measures of (ratios)organizational performance

25


26/29

Operations Management and

Control

PurchasingEconomic Order Quantity

automatic reorder points

Just-In-Time Scheduling

26


27/29

Operations Management and

Control

Project ManagementProgram Evaluation andReview Technique (PERT) -

Identifies and controls themany separate events incomplex projects.

27


28/29


29/29

End

29

Madamo gid nga

salamat!

management control powerpoint

Documents