Management Lecture 10 PDF

Introduction to Controlling Lecture 10 Table of contents 01 03 Definition Controlling Organization Performance 04 02 Measuring The Control Organization Process...

Introduction to Controlling Lecture 10 Table of contents 01 03 Definition Controlling Organization Performance 04 02 Measuring The Control Organization Process Performance Definition Controlling Purpose of Controlling The process of To ensure that activities are monitoring activities completed in ways that lead to to ensure that they are accomplishment of being accomplished as organizational goals. planned Why is Control Important The final link in management functions Empowering Protecting the Planning Employees workplace Controls let managers Control systems Controls help know whether their provide managers minimize workplace goals and plans are with information disruptions (security on target and what and feedback on threats, financial future actions to take employee scandals) performance. The Planning-Controlling Link  The Control Process 1. Measuring actual performance 2. Comparing actual performance against a standard 3. Taking action to correct deviations or inadequate standards  Step 1: Measuring Sources of Control Criteria Control Criteria Information (What) (What) (How) Employees: Budgets: Personal observation Satisfaction Costs Statistical reports Turnover Outputs Oral reports Absenteeism Sales Written reports Step 1: Measuring  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 (forecast or budget). – The size (large or small) and direction (over or under) of the variation from the standard (forecast or budget).  Step 3: Taking Managerial Action Courses of Action Correcting actual Doing Nothing (current) Revising the performance Standard Only if deviation is Immediate Examining the judged to be corrective action standard to ascertain insignificant to correct the whether or not the problem at once. standard is realistic, Basic corrective fair, and achievable. action to locate and to correct the source of the deviation. Managerial Decisions in the Control Process Controlling for Organizational Performance What is What is Organizational Performance ? Performance ? The end result of an The accumulated end results of activity all of the organization’s work processes and activities. Organizational Performance Measures Organizational Organizational Industry and Productivity Effectiveness Company Ranking Productivity: The - Measuring how Profits overall output of appropriate goods/service divided organizational goals Return on revenue by the inputs needed are and how well the Return on to generate that organization is shareholders’ output. achieving its goals. equity Output: Sales - It is what guides Customer revenue managerial satisfaction Inputs: costs of decisions in surveys resources (materials, designing strategies labor expense, and work activities facilities) and in coordinating the work of productivity is a employees. measure of how efficiently employees do their work. Types of Control Feedforward Control A control that prevents anticipated problems before actual occurrences of the problem. Building in quality through design Requiring suppliers conform to ISO 9002 Types of Control Concurrent Control A control that takes place while the monitored activity is in progress. Direct Supervision: management by walking around Types of Control Feedback Control A control that takes place after an activity is done. Advantages of Feedback Control Provide Managers with information on the effectiveness of their planning Enhance employee motivation by providing them with information on how well they are doing Types of Control: Financial Control Traditional Controls Ratio analysis Liquidity Leverage Activity Profitability Types of Control: Balanced Scorecard Is a measurement tool that uses goals set by managers in four areas to measure a company’s performance: Financial Customer Internal processes People/innovation/growth assets Is intended to emphasize that all of these areas are important to an organization’s success and that there should be a balance among them. Benchmarking for Best Practice Benchmark The standard of excellence against which to measure and compare. Benchmarking Is the search for the best practices among competitors or noncompetitors that lead to their superior performance Is a control tool for identifying and measuring specific performance gaps and areas for improvement. Challenges in Controlling: Workplace Concerns Workplace privacy versus workplace monitoring E-mail, telephone, computer, and Internet usage Employee theft The unauthorized taking of company property by employees for their personal use. Workplace violence Anger, rage, and violence in the workplace is affecting employee productivity. Thanks Do you have any questions? CREDITS: This presentation template was created by Slidesgo, and includes icons by Flaticon and infographics & images by Freepik Please keep this slide for attribution