Podcast
Questions and Answers
What is the primary purpose of the controlling function in management?
What is the primary purpose of the controlling function in management?
- To hire new employees
- To develop new objectives
- To create marketing strategies
- To monitor performance and ensure desired results (correct)
The controlling process only focuses on immediate objectives and does not consider long-range plans.
The controlling process only focuses on immediate objectives and does not consider long-range plans.
False (B)
What is a Cybernetic Control System?
What is a Cybernetic Control System?
A self-contained system in performance monitoring and correction capabilities.
To successfully control performance, one must first establish objectives and __________.
To successfully control performance, one must first establish objectives and __________.
Which of the following is NOT a type of standard used in the controlling process?
Which of the following is NOT a type of standard used in the controlling process?
Match the types of standards to their definitions:
Match the types of standards to their definitions:
Measurements in the controlling process do not need to be accurate, as long as they are consistent.
Measurements in the controlling process do not need to be accurate, as long as they are consistent.
What focuses managerial attention on substantial differences between actual and desired performance?
What focuses managerial attention on substantial differences between actual and desired performance?
What is one of the major benefits of Management-by-Exception?
What is one of the major benefits of Management-by-Exception?
Internal controls rely on direct supervision from managers.
Internal controls rely on direct supervision from managers.
Name one type of control that occurs before a work activity begins.
Name one type of control that occurs before a work activity begins.
The _____ control focuses on what happens during the work process.
The _____ control focuses on what happens during the work process.
Which of the following is NOT a characteristic of effective controls?
Which of the following is NOT a characteristic of effective controls?
Match the types of control with their descriptions:
Match the types of control with their descriptions:
What are the two broad options for managers regarding control?
What are the two broad options for managers regarding control?
Effective controls in organizations should only focus on subjective evaluations.
Effective controls in organizations should only focus on subjective evaluations.
What does the Economic Order Quantity method help organizations manage?
What does the Economic Order Quantity method help organizations manage?
Just-In-Time Scheduling focuses on holding large amounts of inventory.
Just-In-Time Scheduling focuses on holding large amounts of inventory.
What technique is used to identify and control separate events in complex projects?
What technique is used to identify and control separate events in complex projects?
Statistical Quality Control establishes upper and lower __________ to monitor product standards.
Statistical Quality Control establishes upper and lower __________ to monitor product standards.
Match the following IT functions with their importance:
Match the following IT functions with their importance:
Which of the following is NOT a component of Information Security?
Which of the following is NOT a component of Information Security?
IT controls are designed solely for managing the adequacy of controls.
IT controls are designed solely for managing the adequacy of controls.
What role does Information Technology play in monitoring business operations?
What role does Information Technology play in monitoring business operations?
Flashcards
Controlling as a Management Function
Controlling as a Management Function
Monitoring performance and taking action to achieve desired results, ensuring actions align with plans and policies.
Cybernetic Control System
Cybernetic Control System
A self-contained system for monitoring & correcting performance, like a thermostat that automatically adjusts temperature.
Controlling Process Steps
Controlling Process Steps
Establishing objectives, measuring performance, comparing results, and taking corrective action, a cyclical feedback system.
Performance Objectives
Performance Objectives
Defined goals for measuring performance, with established standards for measurement.
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Output Standards
Output Standards
Measures of performance results based on quantity, quality, cost, or time.
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Input Standards
Input Standards
Measures of work effort that go into a task, like time spent or resources used.
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Measuring Actual Performance
Measuring Actual Performance
Accurate assessment of performance to identify deviations from desired outcomes.
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Corrective Action
Corrective Action
Actions taken to address any discrepancies or improve performance, based on measurement and comparison.
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Management by Exception
Management by Exception
A management style focusing on areas needing the most attention, rather than overseeing every detail.
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Types of Exceptions
Types of Exceptions
Two types: problems (below standard) and opportunities (above standard).
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Effective Controls
Effective Controls
Well-structured controls that are clear, encourage self-control, timely, positive, objective, flexible, accurate, and cost-effective.
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Preliminary Controls
Preliminary Controls
Controls implemented before a task begins to ensure proper direction and resources.
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Concurrent Controls
Concurrent Controls
Controls that monitor ongoing activities to ensure things are done correctly.
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Post-Action Controls
Post-Action Controls
Controls that evaluate the results of completed actions.
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Internal Controls
Internal Controls
Controls relying on individuals to manage their work according to standards.
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External Controls
External Controls
Controls using supervision and formal systems to regulate behavior.
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Economic Order Quantity
Economic Order Quantity
The optimal quantity of inventory to order at a time, minimizing total inventory costs (holding & ordering).
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Just-In-Time Scheduling
Just-In-Time Scheduling
A production system where materials arrive exactly when needed, minimizing inventory and waste.
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Program Evaluation and Review Technique (PERT)
Program Evaluation and Review Technique (PERT)
A project management tool to identify, analyze, and manage task dependencies, durations, and timelines.
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Statistical Quality Control
Statistical Quality Control
A process for monitoring product quality using statistical methods, aiming for consistency and meeting standards.
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What is Information Technology in Controlling?
What is Information Technology in Controlling?
Using computer systems to monitor and manage business operations, ensuring activities align with performance standards.
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How does IT support business management?
How does IT support business management?
IT provides data and tools to effectively control various aspects of a company, like payroll management.
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What are IT controls?
What are IT controls?
Policies, processes, systems, and people used to ensure IT security and effectiveness, protecting data and alignment with business goals.
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What are the benefits of IT in controlling?
What are the benefits of IT in controlling?
IT enables automated reporting, deviation detection, risk analysis, and access control, ensuring efficient and secure operations.
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Controlling as a Management Function
- Controlling is a process of monitoring performance and taking action to ensure desired results.
- It ensures that actions align with short and long-range plans and objectives.
- It ensures consistency between objectives and accomplishments throughout an organization.
- Maintaining compliance with organizational rules and policies is a key aspect of controlling.
- Managers monitor performance and stimulate action to achieve desired outcomes.
Cybernetic Control System
- A self-contained system for performance monitoring and correction.
- An example of a cybernetic control system is a thermostat.
The Controlling Process
- Establishing objectives and standards are the first step in controlling.
- Measuring actual performance is crucial for identifying deviations.
- Comparing results with objectives and standards helps identify deviations.
- Taking corrective action based on comparisons is essential for improvement.
Establishing Objectives and Standards
- The control process starts with planning and defining performance objectives.
- Standards for measuring performance objectives are established.
- Two types of standards exist: output standards and input standards.
- Output standards measure performance results in terms of quantity, quality, cost, or time; input standards measure work efforts.
Measuring Actual Performance
- Accurate measurements are necessary to detect deviations between desired and actual performance.
- Measurement is essential for effective control.
Comparing Results with Objectives and Standards
- Comparing actual performance with desired performance highlights the need for action.
- Ways of making comparisons include historical analysis or benchmarking.
Taking Corrective Action
- Taking appropriate action to correct or improve things is part of controlling.
- Management-by-exception focuses on major differences between actual and desired performance.
- Two types of exceptions are problems (below standard) and opportunities (above standard).
Effective Controls
- Effective controls in organizations are strategic, result-oriented, understandable, and encourage self-control.
- Furthermore, effective controls are timely, positive in nature, fair, objective, flexible, accurate, and cost-effective.
Types of Control
- Preliminary Control: Set before a work activity begins to make sure directions are proper and resources are available.
- Concurrent Control: Focuses on what happens during the work process, monitors operations and activities to ensure things are done correctly.
- Post-action Control: Takes place after an action is completed, focusing on end results.
Types of Controls (Internal vs. External)
- Internal Control: Motivated individuals exercising self-control over their behavior, enhanced by clear performance objectives and necessary resource support.
- External Control: Personal supervision and formal administrative systems; includes performance appraisals, compensation/benefits, employee discipline systems, and management by objectives.
Organizational Control Mechanisms
- Organizational control mechanisms include strategy, objectives, policies, procedures, recruitment, training, performance appraisals, job design, work structures, and organizational culture.
Compensation and Benefits (Organizational Control Mechanism)
- Compensation and benefits attract and retain talent in an organization.
- They motivate employees to exert maximum effort.
- They acknowledge the significant contributions of employees.
Operations Management and Control
- Purchasing: Components, like Economic Order Quantity (EOQ) and Just-In-Time (JIT) Scheduling, are crucial in operations control.
- Project Management: Techniques like Program Evaluation and Review Technique (PERT) identify and manage complex projects.
- Statistical Quality Control: Uses upper and lower control limits to ensure products meet standards.
Information Technology in Controlling
- IT is used for monitoring and managing business operations and aligning activities with performance standards.
- Computer systems provide the necessary data and tools for effective control.
Importance of IT in Controlling
- IT supports business management operations and provides controls over policies, processes, systems, and people that comprise the IT infrastructure.
- IT facilitates automated reporting, information security, access control, and deviation detection.
- Additionally, IT enables the analysis and mitigation of risks, aids in monitoring and assessment, and facilitates the segregation of duties and proper financial controls.
Examples of IT Applications in Controlling
- Budgeting and Forecasting tools, Inventory Management Systems, Performance Management Dashboards.
Organization and Management
- Separate duties for initiating, authorizing, inputting, processing, and checking data.
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