1. What Is Control? Control
the process of monitoring activities to ensure that they are being accomplished as planned and of correcting significant deviations
control systems are judged in terms of how well they facilitate goal achievement

2. Control is a critical issue facing every manager in every organization today
Quality control
Office productivity
Basic systems
allocating financial resources,
developing human resources,
analyzing financial performance, and evaluating overall productivity

3. Organizational Control
Organizational Control
The systematic process through which managers regulate organizational activities to make them consistent with expectations established in
Plans
Targets
Standards of performance

4. To effectively control an organization, managers need to decide
What information is essential
How will they obtain that information
How they can and should respond to it

5. Why Is Control Important?
Control is the Final Link in the Management Process
provides the critical link back to planning
only way managers know whether organizational goals are being met
Permits Delegation of Authority
provides information and feedback on employee performance

6. The Planning-Controlling Link
Goals
Objectives
Strategies
Plans
Planning
Structure
Human Resource
Management
Organizing
Standards
Measurements
Comparisons
Actions
Controlling
Motivation
Leadership
Communication
Individual and
Group Behavior
Leading

7. Measuring How We Measure
personal observation - permits intensive coverage
Management By Walking Around (MBWA)
drawbacks - subject to personal biases
consumes a great deal of time

8. oral reports - includes meetings, telephone calls
statistical reports - numerical data are easy to visualize and effective for showing relationships
drawbacks - not all operations can be measured
important subjective factors may be ignored
oral reports - includes meetings, telephone calls
may be best way to control work in a virtual environment
technology permits creation of written record from oral report
drawbacks - filtering of information

9. Comprehensive control efforts should use all four approaches
written reports - often more comprehensive and concise than oral reports
usually easy to file and retrieve
Comprehensive control efforts should use all four approaches

10. What We Measure what we measure more critical than how we measure
control criteria applicable to any management situation:
employee satisfaction, absenteeism, and turnover
keeping costs within budgets
control system needs to recognize the diversity of activities
some activities difficult to measure in quantifiable terms
most activities can be grouped into some objective segments that can be measured
when objective measures are not available, should rely on subjective measures

11. Comparing
determines the degree of variation between actual performance and standard
acceptable range of variation - deviations that exceed this range become significant

12. Defining The Acceptable Range Of Variation
Upper Limit
Standard
Lower Limit
Measurement of Performance
Acceptable
Range of
Variation t
t+1
t+2
t+3
t+4
t+5
Time Period (t)

13. Taking Managerial Action
Correct Actual Performance - action taken when the performance variation is unsatisfactory
immediate corrective action - corrects problems at once to get performance back on track
basic corrective action - identifies reason for performance variation
corrects the source of variation
Revise the Standard - variance results from an unrealistic standard
standard, not performance, needs correction
troublesome to revise the standard downward

14. Managerial Decisions in the Control Process

15. Organizational Control
Three types of control
Feed forward
Sometimes called preliminary or preventive control
Concurrent
Assesses current work activities, relies on performance standards
Includes rules and regulations for guiding employee tasks and behaviors
Intent to ensure that work activities produce the correct results
Feedback
Focuses on the organization’s outputs; also called post-action or output control

16. Feed forward Control
prevents anticipated problems
most desirable type of control
requires timely and accurate information that often is difficult to get
Concurrent Control
takes place while activity is in progress
corrects problem before it becomes too costly
best-known form is direct supervision

17. Feedback Control takes place after the activity is done
problems may already have caused damage or waste
the most popular type of control
feedback may be only viable form of control available
feedback has two advantages
provides meaningful information on the effectiveness of planning
can enhance employee motivation

18. Feedback Control Model
Adjust Standards
Adjust Performance
Establish Strategic Goals.
1. Establish standards of performance.
2. Measure actual performance.
3. Compare performance to standards.
4. Take corrective action. If
Inadequate
If Adequate
4. Do nothing or provide reinforcement.
Feedback

19. Control Philosophies
Bureaucratic control influencing employee behavior and assess performance through
rules
policies
hierarchy of authority
reward systems
written documentation
Decentralized control relies on
cultural values
traditions
shared beliefs
trust

20. Financial statement analysis Human resource accounting
TECHNIQUES OF CONTROL
Break even analysis
Budgetary control
Financial statement analysis
Human resource accounting
Management audit
MIS
TQM
PERT( Programme evaluation & review technique)
18-

21. Budgetary Control Most commonly used method of managerial control
Budgetary Control
Most commonly used method of managerial control
Process of setting targets
Used to monitor results and compare to budget

22. Budgets Managers Use Expense = anticipated and actual expenses
Expense = anticipated and actual expenses
Revenue = identifies forecasted and actual revenues
Cash = estimates and reports cash flows
Capital = plans and reports investments in major assets to be depreciated
Master budget

23. Financial Analysis
Managers need to be able to evaluate financial reports that compare the organization’s performance with earlier data or industry norms
Liquidity ratios
Activity ratios
Profitability ratios
Leverage ratios

24. Total Quality Management - TQM
Total Quality Management - TQM
Based on decentralized control philosophy
Organization wide commitment to infusing quality into every activity through continuous improvement
Quality circles
Benchmarking
Reduced cycle time
Continuous improvement

25. Human Resource Accounting
It is the accounting for people as an organizational resource involving measurement of the cost incurred in the acquisition and development of human assets and the measurement of economic value of employees to an organization.

26. MIS
MIS is a formal method of making available to management the accurate and timely information necessary to facilitate the decision making process and enable the organization’s planning, control and operational functions to be carried out effectively.

27. Management Audit
Independent and critical appraisal of the total managerial process.
It measures the deviations from the principles and practices of effective management at different levels of organization and their impact on the organization and on end results.

28. PERT
It is a very useful technique of managerial control particularly at the top level concerned with overall responsibility of a project.
PERT concentrates attention on critical elements that may need correction.
It facilitates control by exception.
It enables forward looking control as a delay will effect succeeding events, and possibly the whole project, unless the manager can somehow make up the time by shortening that of some action in the future.