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Questions and Answers
What is one advantage of feedback control in management?
What is one advantage of feedback control in management?
The balanced scorecard only measures financial performance.
The balanced scorecard only measures financial performance.
False (B)
What is benchmarking?
What is benchmarking?
The search for the best practices among competitors or noncompetitors that lead to superior performance.
Employee theft is defined as the unauthorized taking of company property by employees for their ______ use.
Employee theft is defined as the unauthorized taking of company property by employees for their ______ use.
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Match the types of control to their descriptions:
Match the types of control to their descriptions:
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What type of control is focused on preventing anticipated problems?
What type of control is focused on preventing anticipated problems?
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What is the primary purpose of controlling in management?
What is the primary purpose of controlling in management?
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Organizational Performance is solely defined by the profits generated.
Organizational Performance is solely defined by the profits generated.
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What is the overall output of goods/services divided by the inputs needed called?
What is the overall output of goods/services divided by the inputs needed called?
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The control process begins with comparing actual performance against a standard.
The control process begins with comparing actual performance against a standard.
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A control that occurs while the monitored activity is in progress is called __________ Control.
A control that occurs while the monitored activity is in progress is called __________ Control.
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What are the three main steps in the control process?
What are the three main steps in the control process?
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Control systems help minimize workplace blank by providing necessary information to managers.
Control systems help minimize workplace blank by providing necessary information to managers.
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Which of the following is NOT a measure of Organizational Performance?
Which of the following is NOT a measure of Organizational Performance?
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Which of the following is NOT a source of information for measuring performance?
Which of the following is NOT a source of information for measuring performance?
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The immediate corrective action taken to address a current performance deviation is known as __________ action.
The immediate corrective action taken to address a current performance deviation is known as __________ action.
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The size and direction of variation from the standard do not influence the significance of the variation.
The size and direction of variation from the standard do not influence the significance of the variation.
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What does examining the standard help to ascertain in the control process?
What does examining the standard help to ascertain in the control process?
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What role does feedback play in the controlling process?
What role does feedback play in the controlling process?
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Match the control criteria with their respective focus areas:
Match the control criteria with their respective focus areas:
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Study Notes
Introduction to Controlling
- Controlling is the process of monitoring activities to ensure they are done as planned.
- The purpose of controlling is to ensure activities are completed in ways that lead to organizational goals.
Why is Control Important?
- It's the final link in the management functions.
- Planning: Controls help managers see if their goals and plans are on target, and what actions to take next.
- Empowering Employees: Control systems give managers information and feedback on employee performance.
- Protecting the Workplace: Controls minimize workplace disruptions (security and financial threats/scandals).
The Planning-Controlling Link
- Controlling uses standards, measurements, comparisons and actions.
- Planning includes goals, objectives, strategies and plans.
- Organizing includes structure and human resource management.
- Leading includes motivation, leadership, communication and individual/group behavior. These functions are interconnected.
The Control Process
- Step 1: Measuring Actual Performance: Measures current performance.
- Step 2: Comparing Actual Performance Against a Standard: Compares current performance with the set standard.
- Step 3: Taking Managerial Action: Corrective action is taken based on the comparison results to correct deviations or improve inadequate standards.
Step 1: Measuring
- Sources of Information (How): Includes personal observation, statistical reports, oral reports and written reports.
- Control Criteria (What): Employee-related criteria like satisfaction, turnover and absenteeism, Budgetary criteria like costs, outputs and sales.
Step 1: Measuring - Advantages and Disadvantages
- Personal Observation: Advantages: gain first-hand knowledge, intensive coverage of activities, easy visualization, effective for relationships, fast way to get verbal/nonverbal feedback, comprehensive, formal, easy to file and retrieve. Disadvantages: prone to personal biases, time-consuming, obtrusive, limited information, ignores subjective factors, information is filtered, information can't be documented, takes more time to prepare.
- Statistical Reports: Advantages: easy to visualize, effective for showing relationships, fast way to get information.
- Oral Reports: Advantages: fast way, allows verbal/nonverbal feedback
- Written Reports: Advantages: comprehensive, formal, easy to file/retrieve.
Step 2: Comparing
- Determining the degree of variation between actual performance and the standard
- Significance of variation is determined by: The acceptable range of variation from the standard, the size and direction (over/under) of variation from the standard.
Step 3: Taking Managerial Action
- Courses of Action: Doing Nothing, Correcting current performance, Revising the Standard.
- Doing Nothing: Only if deviation is judged insignificant.
- Correcting Current Performance: Immediate corrective action to quickly fix the problem, basic corrective action to find and fix the source of the problem.
- Revising the Standard: Examining the standard to make sure it's realistic, fair and achievable.
Managerial Decisions in the Control Process
- Steps: Compare actual performance with standard, Is standard being attained? (yes = do nothing, no = continue), Is variance acceptable?(yes = do nothing, no = continue), Is standard acceptable? (yes = do nothing, no = revise standard), Identify cause of variation (correct action).
Controlling for Organizational Performance
- Performance: The end result of an activity.
- Organizational Performance: The accumulated end results of all of the organization's work processes and activities.
Organizational Performance
- Organizational Productivity: Overall output of goods/service divided by inputs needed to generate the output. Output: Sales revenue, Inputs include costs of resources (materials, labor, facilities) and Productivity is measuring how efficiently employees do their work.
- Organizational Effectiveness: Measuring how appropriate organizational goals are and how well the organization is achieving its goals. It Guides managerial decisions, designs strategies and work activities and coordinates employees' work.
- Industry and Company Ranking: Includes profits, Return on revenue, Return on shareholders' equity, Customer satisfaction surveys.
Types of Control
- Feedforward Control: Anticipates problems before they occur. Building in quality through design, requiring suppliers conform to ISO 9002.
- Concurrent Control: Takes place while the monitored activity is in progress. Direct Supervision (management by walking around).
- Feedback Control: Takes place after an activity is done. Provides managers with information on the effectiveness of their planning, enhances employee motivation.
Types of Control: Financial Control
- Analyzing ratios to understand liquidity, leverage, activity & profitability (Liquidity - Current ratio, leverage - Debt to assets, Activity- Inventory turnover, profitability - Profit margin on sales & Return on investment)
Types of Control: Balanced Scorecard
- A measurement tool that uses goals in four areas to measure a company's performance: Financial, Customer, Internal processes, People/innovation/growth assets.
Benchmarking for Best Practice
- Benchmark: The standard of excellence against which to measure and compare.
- Benchmarking: The search for the best practices amongst competitors or non-competitors that lead to superior performance.
Challenges in Controlling: Workplace Concerns
- Workplace privacy versus workplace monitoring: E-mail, telephone, computer, and Internet usage.
- Employee theft: Unauthorized taking of company property for personal use.
- Workplace violence: Anger, rage, and violence in the workplace affect employee productivity
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Description
This quiz explores the fundamental concepts of controlling within management functions. Understand how controlling ensures activities align with organizational goals, provides feedback on employee performance, and integrates with planning and other management functions. Test your knowledge on the importance and processes of controlling.
