Download - Management Control Powerpoint
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Controlling Reporter:
Lourdes C. Esberto
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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
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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
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Controlling as a Management
Function
Controlling
It helps maintaincompliance with
essential organizationalrules and policies.
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Controlling as a Management
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.
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The Control ProcessEstablish objectives and
standards.Measure actual performance.
Compare results with objectivesand standards.
Take necessary action.6
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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.
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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
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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
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Taking Corrective Action
Taking any action necessary tocorrect or improve things.
Management-by-Exception focuses
managerial attention on substantialdifferences between actual anddesired performance.
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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
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Effective ControlsThe Best Controls in Organizations
areStrategic and results oriented
UnderstandableEncourage self-control
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Effective ControlsThe Best Controls in Organizations
areTimely and exception oriented
Positive in natureFair and objective
Flexible 14
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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
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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.
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Types of Control
PostactionSometimes called feedbackcontrols, they take place after an
action is completed. They focuson end results, as opposed toinputs and activities.
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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
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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.
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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
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Organizational Control SystemsManagement ProcessesStrategy and objectives
Policies and proceduresSelection and trainingPerformance appraisalJob design and work structuresPerformance modeling, norms, and
organization culture
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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
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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
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The Hot Stove Rule
ImmediateFocus on
activity notpersonality
Consistent
InformativeOccur in a
supportivesetting
Support
realistic rules 24
To be Effective Discipline Should be:
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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
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Operations Management and
Control
PurchasingEconomic Order Quantity
automatic reorder points
Just-In-Time Scheduling
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Operations Management and
Control
Project ManagementProgram Evaluation andReview Technique (PERT) -
Identifies and controls themany separate events incomplex projects.
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End
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Madamo gid nga
salamat!