Podcast
Questions and Answers
What is a key characteristic of effective control regarding the information it provides?
What is a key characteristic of effective control regarding the information it provides?
Why is timing important in the monitoring outputs of controls?
Why is timing important in the monitoring outputs of controls?
Which characteristic ensures that controls are fair and accepted by employees?
Which characteristic ensures that controls are fair and accepted by employees?
What is crucial for maintaining trust in a control system?
What is crucial for maintaining trust in a control system?
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What does the emphasis on exceptions in control systems imply?
What does the emphasis on exceptions in control systems imply?
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Which of the following is a source for setting performance standards?
Which of the following is a source for setting performance standards?
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What type of control is characterized by monitoring processes during the activity?
What type of control is characterized by monitoring processes during the activity?
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What is the primary aim of feedforward control?
What is the primary aim of feedforward control?
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Which of the following actions is NOT a part of the control process?
Which of the following actions is NOT a part of the control process?
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What type of standards is based on comparing the performance of competitors?
What type of standards is based on comparing the performance of competitors?
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What is a key characteristic of effective control systems?
What is a key characteristic of effective control systems?
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Which of the following sources of information is considered the most subjective in measuring performance?
Which of the following sources of information is considered the most subjective in measuring performance?
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In what scenario is feedback control applied?
In what scenario is feedback control applied?
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Study Notes
Control
- Control ensures effective and efficient achievement of organizational objectives
- Corrective action is needed when actual performance differs from planned performance
- Conformance between planned and eventual performance is important
Characteristics of Control
- Control is exercised through formal rules/procedures
- Degree of control over unit activities varies
- Unit members' involvement in control varies
- Scope of information used for performance evaluation varies
Control Process
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Setting Performance Standards: Identified points in the planning process, based on various sources:
- Historical standards (past performance) – unlikely to be accurate for the future
- Comparative standards (competitor performance)
- Engineering standards (technical analysis, production methods, safety, quality) – often objective and numerical
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Measuring and Comparing Performance: Comparing actual performance to standards using:
- Written reports
- Oral reports
- Personal observations (often subjective)
- Focus on significant deviations, minor deviations are usually normal
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Taking Action: Correcting deviations or revising standards
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Examines both positive and negative deviations
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Includes training, development, new technologies, and disciplinary actions
Types of Control
- Feedforward Control: Happens before the activity to prevent problems. Examines inputs to ensure they meet standards needed for successful transformation into outputs.
- Concurrent Control: Exerted during an activity to monitor transformation processes and ensure the right amount of the right output is produced at the right time.
- Feedback Control: Happens after an activity to monitor outputs to check whether they meet standards. Timely feedback is crucial.
Effective Control Characteristics
- Appropriate: Suitable to firm's goals and plans, clear concise information, not irrelevant. Tailored to the manager.
- Cost-Effective: Benefits outweigh costs, tailored to the job and firm size.
- Acceptable: Fair and adequate, not harmful to employee well-being.
- Emphasis on Exceptions: Focus on significant deviations rather than minor variations.
- Flexible: Adaptable to changing business environments.
- Reliable and Valid: Dependable and accurate, objective criteria.
- Based on Valid Performance Standards: Incorporate all aspects of performance, not overly complex.
- Based on Accurate Information: Clear communication, feedback to allow for corrective actions.
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Description
This quiz covers the fundamental concepts of management control, focusing on the importance of setting performance standards and measuring effectiveness. It discusses the characteristics of control and the corrective actions necessary when performance deviates from planned objectives.
