management basic principles

1. Process of Controlling
with Examples at each
stage.
&
methods of Controlling
.

2. : What is the
control process?
 Controlling
– The process of measuring performance and taking
action to ensure desired results.
– Has a positive and necessary role in the management
process.
– Ensures that the right things happen, in the right way, at
the right time.
– Organizational learning and after-action review.

3. Control system :
A good control system should:
– be flexible so managers can respond as needed.
– provide accurate information about the
organization.
– provide information in a timely manner.
3

4. NEED of controlling ?
Managers must monitor and evaluate:
– Is the firm efficiently converting inputs into outputs?
• Are units of inputs and outputs measured
accurately?
– Is product quality improving?
• Is the firm’s quality competitive with other firms?
– Are employees responsive to customers?
• Are customers satisfied with the services offered?
– Are our managers innovative in outlook?
• Does the control system encourage risk-taking?
4

5. 5
Control process..:
Steps in the control process:
– Step 1 — establish objectives and standards.
– Step 2 — measure actual performance.
– Step 3 — compare results with objectives and
standards.
– Step 4 — take corrective action as needed.

6. 6
Four steps in the control process.

7. 7
Steps :
Step 1 — establishing objectives and
standards
– Output standards
• Measure performance results in terms of quantity,
quality, cost, or time.
– Input standards
• Measure effort in terms of amount of work
expended in task performance.

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What is the
control process?
Step 2 — measuring actual performance
– Goal is accurate measurement of actual
performance results and/or performance efforts.
– Must identify significant differences between
actual results and original plan.
– Effective control requires measurement.

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: What is the
control process?
Step 3 — comparing results with objectives
and standards
– Need for action reflects the difference between
desired performance and actual performance
– Comparison methods:
• Historical comparison
• Relative comparison
• Engineering comparison

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What is the
control process?
Step 4 — taking corrective action
– Taking action when a discrepancy exists
between desired and actual performance.
– Management by exception
• Giving attention to situations showing the greatest
need for action.
• Types of exceptions
– Problem situation
– Opportunity situation

11. Example of process of
organization control management
. Profit Ratios –
– measure how efficiently managers are using the
organization’s resources to generate profits
Return on Investment (ROI) –
– most commonly used financial performance
measure
– organization’s net income before taxes divided
by its total assets
11

12. Operating margin
– calculated by dividing a companies operating
profit by sales revenue
– Provides managers with information about how
efficiently an organization is utilizing its
resources
12

13. Liquidity ratios
– measure how well managers have protected
organizational resources to be able to meet
short-term obligations
Leverage ratios
– measure the degree to which managers use debt
or equity to finance ongoing operations
13

14. Activity ratios
– provide measures of how well managers are
creating value from organizational assets
14

15. Output control :
Organizational Goals
– Each division within the firm is given specific
goals that must be met in order to attain overall
organizational goals.
• Goals should be set appropriately so that managers
are motivated to accomplish them
15

16. Output control :
Operating Budgets
– Blueprint that states how managers intend to
use organizational resources to achieve
organizational goals efficiently.
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The role of feed forward, concurrent, and
feedback controls in organizations.

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What is the
control process?
Internal and external control
– Internal control
• Allows motivated individuals and groups to exercise
self-discipline in fulfilling job expectations.
– External control
• Occurs through personal supervision and the use of
formal administrative systems.

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What are the common organizational
controls?
Management by Objectives (MBO)
– A structured process of regular communication.
– Supervisor/team leader and workers jointly set
performance objectives.
– Supervisor/team leader and workers jointly
review results.

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What are the common organizational
controls?
 Statistical quality control
– Quality control involves checking processes,
materials, products, and services to ensure that
they meet high standards.
– Statistical quality control involves:
• Taking samples of work.
• Measuring quality in the samples.
• Determining the acceptability of results.

21. Methods of controlling :
Evolutionary change
– gradual, incremental, and narrowly focused
– constant attempt to improve, adapt, and adjust
strategy and structure incrementally to
accommodate changes in the environment
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22. Revolutionary change
– Rapid, dramatic, and broadly focused
– Involves a bold attempt to quickly find ways to
be effective
– Likely to result in a radical shift in ways of
doing things, new goals, and a new structure for
the organization
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23. Top Down Change
– A fast, revolutionary approach to change in
which top managers identify what needs to be
changed and then move quickly to implement
the changes throughout the organization.
Bottom-up change
– A gradual or evolutionary approach to change
in which managers at all levels work together to
develop a detailed plan for change.
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24. Benchmarking
– The process of comparing one company’s
performance on specific dimensions with the
performance of other, high-performing
organizations.
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25. Changes in organization control:
Movement of an organization away from its
present state and toward some desired
future state to increase its efficiency and
effectiveness
There are a wide variety of forces arising
from the way an organization operates,
from its structure, culture, and control
systems that make organizations resistant to
change
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