Functions of Management - Controlling Module 5

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What are the five core functions of management?

Planning, organizing, staffing, directing/leading, controlling

What is the purpose of controlling in management?

Controlling ensures that all activities are completed according to the plans and objectives set by the organization.

Why is control considered an essential function in the management cycle?

Control brings the management cycle back to the planning function by uncovering deviations from standards, analyzing the causes, and initiating corrective actions.

Which of the following is NOT a limitation of controlling?

Increased employee motivation Signup and view all the answers

What is the relationship between planning and controlling?

They are inseparable twins of management, where planning provides the standards for control, and controlling ensures that the plans are executed effectively. Signup and view all the answers

Describe the first step in the controlling process.

Establishing performance standards. Signup and view all the answers

Which of the following is NOT considered a type of performance standard?

Employee availability standards Signup and view all the answers

What is the purpose of comparing measured performance to stated standards?

To evaluate the organizational performance and determine if it is meeting the set standards. Signup and view all the answers

Explain the role of corrective actions in the controlling process.

Corrective actions aim to bring organizational performance to the desired level by addressing any deviations from set performance standards. Signup and view all the answers

Which of the following is NOT a requirement for effective control?

Control should be subjective Signup and view all the answers

Which type of control system helps to anticipate problems and take corrective action before they occur?

Feed forward controls Signup and view all the answers

Describe a common example of a feedback control.

Receiving feedback from facilities engineers regarding a completed job. Signup and view all the answers

What is the most traditional method of controlling?

Personal observation. Signup and view all the answers

What is the purpose of breakeven analysis?

To determine the sales volume that is needed to cover the company's costs, thus achieving neither profit nor loss. Signup and view all the answers

What is the main purpose of budgetary control?

To plan operations in advance and monitor actual performance against those plans using budgets as a guide. Signup and view all the answers

What are the key advantages of budgeting?

Focus on specific targets, motivating employees, optimizing resource allocation, fostering coordination among departments, and facilitating management by exception. Signup and view all the answers

What is the main purpose of return on investment (ROI)?

To determine whether invested capital is generating a reasonable return, indicating the effectiveness of investment decisions. Signup and view all the answers

Which of the following is NOT a type of ratio analysis?

Productivity ratios Signup and view all the answers

What is the purpose of responsibility accounting?

To establish clear accountability for different sections, divisions, and departments of the organization, where each unit is responsible for achieving specific targets. Signup and view all the answers

What is the main objective of management audit?

To assess the overall performance and effectiveness of the management of an organization, identify areas for improvement, and ensure that management functions are operating efficiently. Signup and view all the answers

Describe the main purpose of PERT and CPM.

To plan and control complex, time-bound projects by breaking down the project into manageable activities, scheduling tasks, and allocating resources effectively. Signup and view all the answers

What is the primary purpose of a management information system (MIS)?

To collect, process, and disseminate accurate, timely, and relevant information to support effective managerial decision-making. Signup and view all the answers

Which of the following is NOT an advantage of using a management information system?

It increases cost effectiveness in managing information. Signup and view all the answers

Study Notes

Module 5: Functions of Management - Controlling

Controlling is a crucial management function, ensuring activities align with plans.
It's a process where managers ensure actual activities match planned activities.
Managerial control involves measuring accomplishments against standards and correcting deviations to meet objectives (Koontz and O'Donnell).
Controlling isn't the last step; it loops back to planning.
It identifies performance deviations, analyzes causes, and implements corrective actions.
This process refines future plans based on past issues.

Nature and Purpose of Control

Controlling is essential and goal-oriented.
It ensures activities conform to standards.
It's a continuous process.
Control focuses on the future, as the past cannot be controlled.
It involves measurement and action.
Controlling is a pervasive function for managers.

Importance of Controlling

Essential for effective planning.
Helps organizations achieve goals.
Measures progress.
Identifies deviations and suggests corrective actions.
Leads to organizational alignment.
Enables accurate standard evaluation.
Aids in resource efficiency (reduction in wastage).
Improves employee motivation.
Employees understand performance standards.

Limitations of Controlling

Setting quantitative standards can be difficult.
Control systems may struggle with external factors (e.g., government policies, competition).
Employee resistance to control measures.
Controlling can be costly.
Control systems should align with managerial roles and responsibilities.

Relationship between Planning and Controlling

Planning and controlling are interconnected.
Control relies on predetermined performance standards created by planning.

Control Process

Establishing standards (benchmarks).
Measuring performance.
Comparing performance against standards.
Taking corrective actions.

Techniques of Managerial Control

Personal Observation: Direct, but time-consuming.
Statistical Reports: Uses data analysis (averages, ratios).
Breakeven Analysis: Shows the point where revenue equals costs.
Budgetary Control: Planning and measuring performance via budgets.
- Sales budget, production budget, material budget, cash budget, etc.
Return on Investment (ROI): Measures efficiency of capital utilization.
Ratio Analysis: Financial evaluations using ratios.
- Liquidity, solvency, and profitability ratios.
Responsibility Accounting: Divides an organization into responsibility centers for accountability.
PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method): Network techniques for planning and controlling complex projects.
Management Information Systems (MIS): Computer-based systems for providing information for decision-making.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz explores the critical function of controlling in management as outlined in Module 5. It covers essential aspects such as the nature, purpose, and importance of control in ensuring activities align with organizational plans. Test your understanding of how managerial control contributes to effective planning and goal achievement.