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Fundamentals of Controlling

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1 Fundamentals of Controlling
Supervision: Concepts and Practices of Management, Second Canadian Edition Hilgert, Leonard, Shemko, and Docherty © 2005 by Nelson, a division of Thomson Canada Limited

2 Learning Objectives Describe the nature and importance of the managerial controlling function. Identify three types of control mechanisms based on time. Explain the essential characteristics of effective controls. Describe the essential steps in the control process.

3 Learning Objectives Discuss the supervisor’s role in controlling through budgets. Discuss the supervisor’s role in maintaining cost consciousness and in responding to higher-level managers’ orders to reduce costs. Identify additional control areas and explain how the controlling function is closely related to the other managerial functions.

4 Controlling Ensuring that actual performance is in line with intended performance and taking corrective action, if necessary. Controls ensure that results match plans.

5 Controlling When performance and standards deviate from the plan, the supervisor must carry out the controlling function by taking corrective action, which may involve establishing new plans and different standards.

6 Employee Responses When controls are well designed and properly implemented, they can positively influence employee motivation and behaviour.

7 The Time Factor Feedforward controls—anticipatory
Concurrent controls—in-process Feedback controls—after-the-process

8 Types of Controls Feedforward control — anticipatory action taken to ensure that problems do not occur Concurrent control — corrective action taken during the production or delivery process to ensure that standards are being met Feedback control — action taken after the activity, product, or service has been completed

9 Closeness of Supervision
Supervisors must know how closely to monitor employees’ work based on the employees’ Experience Initiative Dependability Resourcefulness

10 Effective Controls Understandable Timely Suitable and economical
Indicational Flexible

11 Steps in the Control Process

12 Do’s and Don’ts for Controlling
Be clear about objectives and assignments. Get agreement on standards and measures. Solicit ideas for improvement. Do not micromanage. Take corrective action. Demonstrate consistently the importance of budgets, standards, and controls. Convey that you will not accept any unsatisfactory performance.

13 Standards Tangible standards—standards for performance results that are identifiable and measurable Intangible standards—standards for performance results that are difficult to measure and often relate to human characteristics

14 Motion and Time Studies
Motion study—analysis of work activities to determine how to make a job easier and quicker to do Time study—technique for analyzing jobs to determine time standards for performing each job

15 Employee Participation
Workers are more apt to accept standards as reasonable and fair when they help formulate those standards.

16 Strategic Control Points
Performance criteria chosen for assessment because they are key indicators of overall performance

17 Strategic Control Standards
Number of voluntary resignations and requests for transfer Levels of absenteeism and tardiness Accident frequency and severity rates Number and types of employee grievances Number and types of customer complaints Amount of scrap and rejects

18 Checking Performance Against Standards
Personal observation Oral and written reports Exception principle - concept that supervisors should concentrate their investigations on activities that deviate substantially from the standard

19 Checking Performance Against Standards
Spot checks Sampling Techniques Sampling - the technique of evaluating some numbers from a large group to determine whether the group meets acceptable quality standards

20 Taking Corrective Action
Before taking corrective action, analyze the situation to determine the causes of the deviation. Only after identifying specific causes can the supervisor decide which remedial actions will obtain better results.

21 Budgetary Control Budget—financial plan that projects expected revenues and expenditures during a set period Budgetary control—the use of budgets to control operations so that they comply with organizational standards for making budgets

22 Budget Making Incremental budgeting—technique for projecting revenues and expenses based on history Zero-base budgeting—process of assessing, on a benefit-and-cost basis, all activities to justify their existence

23 Sharing Budgetary Responsibility
Employees must understand financial data and have a basis for comparing their firms’ financial information with that of previous years and competitors. Involve employees in setting objectives and cutting costs.

24 Specialized Controls Inventory control Quality control
Production control

25 Controlling and the Other Managerial Functions
The better the supervisor plans, organizes, staffs, and leads, the better will be his or her ability to control activities and employees.

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