Controlling (PPT)

CONTROLLIN G BY VERA CHIWASA 1 Controlling as a Management Function Controlling A process of monitoring performance and taking action to ensure desired results. It sees to it that the right things happen, in the right ways, and at the right time....

CONTROLLIN G BY VERA CHIWASA 1 Controlling as a Management Function Controlling A process of monitoring performance and taking action to ensure desired results. It sees to it that the right things happen, in the right ways, and at the right time. 2 Controlling ◦Done well, it ensures that the overall directions of individuals and groups are consistent with short and long range plans. ◦It helps ensure that objectives and accomplishments are consistent with one another throughout an organization. 3 Controlling as a Management Function Controlling ◦It helps maintain compliance with essential organizational rules and policies. ◦The manager must stimulate action by assessing and monitoring performance to his subordinates through orders and also supervise their work to ensure that the plans and policies achieve the desired actions and results. 4 Controlling as a Management Function Cybernetic Control System ◦One that is self-contained in its performance monitoring and correction capabilities. (thermostat) 5 The Controlling Process Establish objectives and standards. Measure actual performance. Compare results with objectives and standards. Take corrective action. 6 Establish Objectives and Standards The control process begins with planning and the establishment of performance objectives. Performance objectives are defined and the standards for measuring them are set. 7  Establish Objectives and Standards There are two types of standards: ◦Output Standards - measures performance results in terms of quantity, quality, cost, or time. ◦Input Standards - measures work efforts that go into a performance task. 8 Measuring Actual Performance Measurements must be accurate enough to spot deviations or variances between what really occurs and what is most desired (expected). Without measurement, effective control is not possible. 9 Comparing Results with Objectives and Standards The comparison of actual performance with desired performance establishes the need for action. Ways of making such comparisons include: ◦Historical or experiences ◦Benchmarking 10 Taking Corrective Action Taking any action necessary to correct or improve things. Management-by-Exception focuses managerial attention on substantial differences between actual and desired performance. 11 Taking Corrective Action ◦Management-by Exception can save the managers time, energy, and other resources, and concentrates efforts on areas showing the greatest need. ◦There are two types of exceptions: ◦Problems - below standard ◦Opportunities - above standard 12  Effective Controls The Best Controls in Organizations are; Strategic and results oriented Understandable Encourage self-control 13  Effective Controls The Best Controls in Organizations are Timely Positive in nature Fair and objective Flexible Accurate Cost effective 14 Types of Control 1.Preliminary Sometimes called the feed forward controls, they are set aside before a work activity begins. They make sure that proper directions are set and that the right resources are available to accomplish them. 15 Types of Control 2. Concurrent Focus on what happens during the work process. Sometimes called steering controls, they monitor ongoing operations and activities to make sure that things are being done correctly. 16  Types of Control 3. Post action Sometimes called feedback controls, they take place after an action is completed. They focus on end results, as opposed to inputs and activities. 17 Types of Controls Managers have two broad options with respect to control. They can rely on people to exercise self- control (internal) over their own behavior. Alternatively, managers can take direct action (external) to control the behavior of others. 18  Types of Control Internal Controls Allows motivated individuals to exercise self-control in fulfilling job expectations. The potential for self-control is enhanced when capable people have clear performance objectives and proper resource support. 19  Types of Control External Controls It occurs through personal supervision and the use of formal administrative systems. ◦Performance appraisal systems, compensation and benefit systems, employee discipline systems, and management-by-objectives. 20 Organizational Control Mechanisms Management Processes ◦Strategy and objectives ◦Policies and procedures ◦Recruitment Selection and training ◦Performance appraisal ◦Job design and work structures ◦organization culture 21 Organizational Control mechanisms Compensation and Benefits ◦Attract talented people and retain them. ◦Motivate people to exert maximum effort in their work. ◦Recognize the value of their performance contributions. 22 Operations Management and Control Purchasing ◦Economic Order Quantity ◦Just-In-Time Scheduling 23 Operations Management and Control Project Management ◦Program Evaluation and Review Technique Identifies and controls the many separate events in complex projects. 24 Operations Management and Control Statistical Quality Control ◦Based on the establishment of upper and lower control limits, that can be graphically and statistically monitored to ensure that products meet standards. 25 INFORMATION TECHNOLOGY IN CONTROLLING It is the use of computer systems and related technologies to monitor and manage operations of the business and ensuring that activities are aligned with the performance standard by providing the data required and tools to effectively control various aspects of a company by using technology 26 Why is Information Technology in controlling Important Support business management operations i.e. payroll management Provide general and technical controls over the polices, processes, systems, and people that makeup IT infrastructure 27  Importance of IT in controlling Automated reporting: 1.Generates reports automatically through IT systems and provides timely information to decision-makers. Information Security Confidentiality Integrity Availability Protecting against information theft Complying with legislation 28 Access control and security: Implementing IT security measures help protect sensitive data and ensures that unauthorized users cant access information relevant to control functions Deviation detection: Setting thresholds and alerts within IT systems to flag potential deviations from planned performance, enabling prompt corrective action. 29 Importance of IT in controlling Analyze and mitigate risks IT controls are selected and implemented based on risks. they are designed for the following; to manage Adequacy of Controls. Mitigate risk 30 Monitoring and Assessing Controls Choosing a framework Monitoring IT Controls Ongoing Special Reviews Assessing Controls Audit Methodology Testing IT Controls and Continuous Assurance 31 6Organization and Management Segregation of duties Initiating, authorizing, inputting, processing and checking data Separate Financial controls Identify potential early failings on Change Management 32 Examples of applications in IT controlling Budgeting and forecasting tools: Software to track expenses against budget allocations and forecast future financial performance and expenditure Inventory management systems: Real-time monitoring of inventory levels to optimize stock and prevent shortages Performance management dashboards: Visual representation of key performance indicators (KPIs) for quick analysis and decision- making 33