Management Controlling Concepts
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Questions and Answers

What is the primary purpose of control within an organization?

  • To enhance employee satisfaction
  • To reduce operational costs
  • To eliminate the need for managerial oversight
  • To ensure operations align with organizational objectives (correct)

Which of the following actions can be considered a corrective measure within an organizational control system?

  • Increasing production capacity (correct)
  • Conducting a market survey
  • Changing company values
  • Implementing a new marketing strategy

What type of control focuses on anticipating and preventing problems before operations begin?

  • Concurrent control
  • Future control
  • Feedback control
  • Feedforward control (correct)

During which type of control are operations already ongoing and adjustments are made as deviations occur?

<p>Concurrent control (B)</p> Signup and view all the answers

Feedback control is primarily concerned with which of the following?

<p>Assessing completed activities for improvement (B)</p> Signup and view all the answers

Which component of organizational control systems provides a framework for corrective measures?

<p>Strategic plans (A)</p> Signup and view all the answers

Why do engineering firms often require longer-range financial plans compared to other companies?

<p>They face longer lead times for capital projects (D)</p> Signup and view all the answers

What does the operating budget typically reflect for a future period?

<p>Expected expenditures, revenues, or profits (D)</p> Signup and view all the answers

What is the primary function of budget figures in performance management?

<p>To serve as standard measurements for performance (B)</p> Signup and view all the answers

Which method aids in understanding the organization's needs through firsthand experience?

<p>Executive reality check (D)</p> Signup and view all the answers

What is typically included in statistical reports within a firm?

<p>Labor efficiency rates (B)</p> Signup and view all the answers

Which one of the following is NOT a symptom of inadequate control?

<p>High employee engagement (A)</p> Signup and view all the answers

What is the main goal of performance appraisals?

<p>To measure and improve employee performance (D)</p> Signup and view all the answers

What can be an outcome of a comprehensive internal audit?

<p>Improved efficiency and effectiveness (D)</p> Signup and view all the answers

Which of these approaches helps to identify control problems through a proactive check?

<p>General checklist of symptoms (C)</p> Signup and view all the answers

What does controlling as a management function encompass?

<p>It evaluates the realization of objectives (B)</p> Signup and view all the answers

What is a key definition of controlling in an organization?

<p>The evaluation of organizational objectives to ensure they are met. (D)</p> Signup and view all the answers

Which of the following actions is NOT a step in the control process?

<p>Implementing new marketing strategies (A)</p> Signup and view all the answers

Why is proper control considered important for an organization?

<p>It minimizes the negative effects of deviations and mistakes. (B)</p> Signup and view all the answers

What consequence can arise from uncontrolled activities in a company?

<p>Potential losses or operational discontinuity. (D)</p> Signup and view all the answers

Which example best illustrates a failure in controlling due to management oversight?

<p>An industrial accident due to lack of adherence to safety standards. (B)</p> Signup and view all the answers

What is the first step in the control process?

<p>Establishing performance objectives and standards (D)</p> Signup and view all the answers

How can an inventory control system benefit an organization?

<p>It helps reduce losses related to inventory. (B)</p> Signup and view all the answers

Which of the following is an example of a performance objective?

<p>Achieving a specific sales target in quantity or monetary terms. (D)</p> Signup and view all the answers

Flashcards

What is Controlling?

The process of checking if objectives are met, identifying why they aren't if they aren't, and planning improvements for the future.

Importance of Controlling

Ensuring the organization reaches its goals efficiently and effectively. It minimizes the impact of errors and failures.

Performance Objectives & Standards

Clearly defined targets or benchmarks for performance. Examples include sales targets, production quantities, and employee attendance rates.

Measuring Actual Performance

Measuring actual performance against set standards. This allows for objective assessment and identification of deviations.

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Comparing Actual Performance to Standards

Comparing actual performance against the established objectives and standards. This reveals areas of success or shortfall.

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Taking Action Based on Results

Taking corrective actions to address deviations from the planned objectives and standards. This includes making adjustments to processes or strategies.

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Examples of Controlling

Inventory control systems, safety protocols, and quality management systems are examples of control mechanisms used to minimize losses and ensure efficient operations.

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Controlling in the Management Process

It's the last step in the management process, confirming the achievement of goals after planning, organizing, and implementing.

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Performance control

Comparing actual performance with objectives and standards to identify deviations and determine corrective actions.

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Feedforward control

Anticipating potential problems before they occur and taking steps to prevent them.

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Concurrent control

Monitoring ongoing operations and making adjustments to ensure compliance with requirements.

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Feedback control

Collecting information about completed activities and using it to evaluate performance and improve future activities.

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Strategic plan

A document that outlines the organization's overall goals and strategies.

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Operating budget

A financial projection for a specific future period, outlining planned expenditures, revenues, and profits.

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Performance appraisal

Systematic reviews of employees' performance using a defined framework.

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Organizational control systems

A control system that uses formal communication channels to disseminate information and ensure compliance.

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How are budgets used in controlling?

Budget figures provide a baseline for measuring performance. If actual performance is below budget, it indicates areas for improvement.

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What is the purpose of performance appraisals in controlling?

Performance appraisals provide feedback on individual performance, helping employees improve their work and contributing to overall organizational goals.

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What kind of information do statistical reports provide for controlling?

Statistical reports provide insights into various aspects of the business, such as labor efficiency, quality control, and financial performance.

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How do policies and procedures contribute to controlling?

Policies are broad guidelines for achieving goals, while procedures outline specific steps for performing tasks.

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What is an executive reality check?

An executive reality check involves executives directly experiencing the challenges faced by employees, gaining a better understanding of operational needs.

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What is a comprehensive internal audit?

A comprehensive internal audit examines the effectiveness and efficiency of an organization's operations, identifying potential problems before they escalate.

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What are some symptoms of inadequate control?

A checklist of symptoms helps identify inadequate control, such as declining revenues, customer complaints, and employee dissatisfaction.

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Study Notes

Controlling

  • Controlling is the process of verifying if organizational objectives have been met, addressing why not, and defining future actions.
  • Controlling completes the management cycle.
  • The importance of controlling lies in efficiently & effectively achieving organizational goals.
  • Deviations, errors, and shortcomings occur inevitably in daily operations and increase costs of products & services.
  • Adequate control measures minimize these negative occurrences.
  • Examples: Inventory controls, minimizing inventory losses, worker output standards aiding in cost control.

Steps in the Control Process

  • Establish performance objectives & standards: Define what must be achieved (e.g., sales targets, production targets, safety records).
  • Measure actual performance: Quantify actual performance against predetermined objectives & standards (e.g., sales figures, worker attendance, safety records).
  • Compare actual performance to objectives & standards: Evaluate performance against objectives and standards.
  • Take necessary action based on results: Take corrective action if necessary (e.g., hiring additional personnel, using more equipment, adjusting standards).

Types of Control

  • Feedforward control: Management anticipates and prevents potential problems before they happen. Ensuring the right resources are in place before operations.
  • Concurrent control: Management monitors ongoing operations to identify variances from standards to make adjustments during operation.
  • Feedback control: Management evaluates the results of operations after they have occurred, and subsequently creates corrective plans for improvement.

Components of Organizational Control Systems

  • Strategic plan: The basic control mechanism for directing and achieving organizational goals.
  • Long-range financial plan: Details the financial activities and goals.
  • Operating budget: Specifies projected cost & revenues for a certain period regarding operations.
  • Performance appraisals: Evaluate employee performance.
  • Statistical reports: Track various business developments using data.
  • Policies & procedures: Define processes for specific situations.

Identifying Control Problems

  • Executive reality check: Managers experience the frontline and identify unrealistic requirements.
  • Comprehensive internal audit: An audit determines organizational effectiveness and efficiency.
  • General checklist of inadequate control symptoms:
    • Unexplained decline in revenues/profits.
    • Degradation of service.
    • Employee dissatisfaction.
    • Cash shortages.
    • Idle facilities/personnel.
    • Disorganized operations.
    • Excessive costs.

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Related Documents

Engineering Management - Chapter 9 Controlling - PDF

Description

This quiz explores the key principles of controlling within management, focusing on how to establish performance objectives, measure outcomes, and implement corrective actions. Understanding these concepts is essential for efficient and effective organizational operations, ensuring that goals are met and deviations are addressed.

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