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new controling process


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new controling process

  1. 1. The Controlling Process Ms. R. Senathiraja, Senior Lecturer, Department of Management and Organization Studies, Faculty of Management and Finance, University of Colombo
  2. 2. Management in Organization Input from the Environment Human Resources Financial resources Physical Resources Information Resources Planning and Decision Making Leading Controlling Organizing Goals Attained Efficiently Effectively
  3. 3. What is control? <ul><li>The regulation of organizational activities in such a way to facilitate goal attainment. </li></ul><ul><li>Monitoring organizational progress towards goal attainment </li></ul>
  4. 4. Purpose of control Adapting to environmental change Control help the organization Cope with organizational complexity Minimize costs Limit the accumulation of error
  5. 5. Steps in control process Establish Standards Measure Performance Compare performance Against standards Determine need For corrective action Maintain The status quo Correct the deviation Change standards
  6. 6. <ul><li>In your work , determine which areas and levels of control exists for you on your job? </li></ul>
  7. 7. Types of control Based on Areas Control of physical resources Control of human resources Control of Information Control of financial Resources Based on the organizational Levels Operational Control Financial control Structural control Strategic control
  8. 8. Control of physical resources <ul><li>Inventory Management </li></ul><ul><li>Quality Control </li></ul><ul><li>Equipment Control </li></ul>
  9. 9. Inventory Management <ul><li>Managing the organization’s raw materials, work-in-process, finished goods and products in transit. </li></ul><ul><li>JIT-Just In Time </li></ul><ul><li>It is an inventory system that has necessary materials arriving as soon as they are needed so that production process is not interrupted </li></ul>
  10. 10. Quality Control <ul><li>Features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. </li></ul><ul><li>Dimensions of Quality </li></ul><ul><li>Performance: A product primary operating characteristics. </li></ul><ul><li>Features: Supplements to a product’s basic functioning characteristics. </li></ul><ul><li>Reliability : A Probability of not malfunctioning during a specific period </li></ul><ul><li>Conformance: The degree to which a product design and operating characteristics meet established standards. </li></ul><ul><li>Durability: A measure of product life </li></ul><ul><li>Serviceability: The speed and easy of repair </li></ul><ul><li>Aesthetics: How a product look, feels, tastes, and smells </li></ul><ul><li>Perceived quality: As seen by a customer </li></ul>
  11. 11. Total Quality Management (TQM) <ul><li>A strategic commitment by top management to change its whole approach to business in order to make quality a guiding factor in everything it does. </li></ul><ul><li>Dimensions of TQM </li></ul><ul><li>Strategic commitment </li></ul><ul><li>Employee involvement </li></ul><ul><li>Technology </li></ul><ul><li>Materials </li></ul><ul><li>Methods </li></ul>
  12. 12. Control of human resources <ul><li>Selection and placement </li></ul><ul><li>Training and development </li></ul><ul><li>Performance appraisal </li></ul><ul><li>Compensation </li></ul>
  13. 13. Control of Information <ul><li>Sales and marketing forecasting </li></ul><ul><li>Environmental analysis </li></ul><ul><li>Public relations </li></ul><ul><li>Production scheduling and economic forecasting </li></ul>
  14. 14. Types of Control -based on Levels- <ul><li>Operational Control </li></ul><ul><li>Financial control </li></ul><ul><li>Structural control </li></ul><ul><li>Strategic control </li></ul>
  15. 15. Operations control Focuses on the processes the organization uses to transform resources into products or services Preliminary control Focus is on inputs to the organizational system Screening Control Focus is on how inputs are being transformed into outputs Post action Control Focus is on outputs from the organizational system Inputs Transformation Outputs
  16. 16. Financial control <ul><li>It is the control of finance as they flow into the organization, are held by the organization, and flow out of the organization. </li></ul><ul><li>Financial control tools </li></ul><ul><li>- Budgetary control (A plan expressed in numerical terms) </li></ul><ul><li>There are three types of budgets </li></ul><ul><li>-A financial budget </li></ul><ul><li>-Operating budget </li></ul><ul><li>-Non-monetary budget </li></ul>
  17. 17. Financial Budget <ul><li>It indicates where the organization expects to get its cash for the coming period and how it plan to use it. </li></ul><ul><li>Sources and uses of cash </li></ul>Cash budget: All sources of cash income and cash expenditures in monthly, weekly, or daily Capital expenditure budget : Cost of major assets such as new plant, machinery or land Balanced sheet Budget: Forecast of the organization's assets and liabilities
  18. 18. Operating Budget <ul><li>It indicates what quantities of products or services the organization expects to produce and what resources will be used to create them. </li></ul><ul><li>Planned operation in financial terms </li></ul>Sales or revenue budget: Income the organization expect to receive from normal operation Expense budget : Anticipated expenses for the organization during The coming period Profit Budget: Anticipated differences between sales or revenue and expenses
  19. 19. Non Monetary Budget <ul><li>Planed operation in non financial terms such as units of output, hours of direct labour, machine hours . </li></ul>Labour budget: Hours of direct labour available for use Space budget : Square feet or meters of space available for various functions Production budget: Number of units to be produced during the coming time period.
  20. 20. Other tools of financial control <ul><li>Financial Statement : A profile of some aspects of an organization’s financial circumstances. </li></ul><ul><li>Balance sheet: List of assets and liabilities of an organization at a specific point of time. </li></ul><ul><li>Income statement: A summary of financial performance over a period of time. </li></ul><ul><li>Ratio analysis: The calculation of one or more financial ratios to assess some aspects of the organization financial health. </li></ul><ul><li>Financial Audit: An independent appraisal of an organization’s accounting, financial, and operating systems. External audit conducted by external accountants, an internal audit conducted by employees of the organization . </li></ul>
  21. 21. -Structural Control- It addresses how well an organization’s structural elements serve their intended purpose. Degree of formality Organization Design Reward system Participation Performance Expectations Extended and informal Limited and formal Directed at group performance Directed at individual performance Flat structure, shared influence Tall structure, Top-down influence Directed toward enhanced performance above and beyond the minimum Directed towards minimum levels of acceptable performance Group norms, culture self control Strict rules, formal controls, rigid hierarchy Employee commitment Goal of control approach Employee compliance Decentralized Control Dimensions Bureaucratic Control
  22. 22. Strategic Control <ul><li>It aimed at ensuring that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals. </li></ul><ul><li>It focuses on the extent to which implemented strategy achieve the organization’s strategic goal </li></ul>Alter <ul><li>organizational structure </li></ul><ul><li>Leadership </li></ul><ul><li>Adopt new Technology </li></ul><ul><li>Modify human resources </li></ul><ul><li>Change its information </li></ul><ul><li>And operational control system </li></ul>
  23. 23. How does manager determine whether his or her firm needs improvement in control?
  24. 24. How to increase the effective control system <ul><li>Integration with planning </li></ul><ul><li>Flexibility </li></ul><ul><li>Accuracy </li></ul><ul><li>Timeliness </li></ul><ul><li>Objectivity </li></ul>
  25. 25. Why do employee resist organizational control?
  26. 26. <ul><li>Over control: try to control too many things </li></ul><ul><li>Inappropriate focus: Focus too much on quantifiable variables. </li></ul><ul><li>Rewards for inefficiency </li></ul><ul><li>Too much accountability </li></ul>