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Foundations Of Control

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Foundations Of Control

  1. 1. Foundation of control
  2. 2. Learning Outcomes Explain the nature and importance of control Describe the three steps in the control process Discuss the types of controls organizations and managers use Discuss contemporary issues in control
  3. 3. Management functions1. Planning2. Organizing3. Leading4. Controlling
  4. 4. What is Control? Control  The management function that involves monitoring activities to ensure that they’re being accomplished as planned and correcting any significant deviations
  5. 5. What is the Control Process? Control Process  A three-step process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards
  6. 6. How Do Managers Measure?To determine actual performance, a manager must first get information about it. Thus, the first step in control is measuringFour common sources of information frequently used to measure actual performance are  personal observation  statistical reports  oral reports  written reports
  7. 7. What is Managing By WalkingAround? Management By Walking Around (MBWA)  When a manager is out in the work area interacting with employees
  8. 8. So “MBWA” is not that 
  9. 9. How Do Managers ComparePerformance to Planned Goals? Range of Variation  The acceptable parameters of variance between actual performance and a standardDeviations outside this range need attention
  10. 10. What Management Action Can BeTaken? Immediate Corrective Action  Corrective action that addresses problems at once to get performance back on track Basic Corrective Action  Corrective action that looks at how and why performance deviated before correcting the source of deviation
  11. 11. When Does Control Take Place? Feedforward Control  Control that takes place before a work activity is done Concurrent Control  Control that takes place while a work activity is in progress Feedback Control  Control that takes place after a work activity is done
  12. 12. How Do Managers Keep Track ofFinances? In order to meet profitability goals, managers need financial controls Traditional financial measures managers might use include  Ratio analysis  Budget analysis
  13. 13. Financial Ratios by Type Liquidity ratios  measure an organization’s ability to meet its current debt obligations Leverage ratios  examine the organization’s use of debt to finance its assets and whether it’s able to meet the interest payments on the debt
  14. 14. Financial Ratios (cont.) Activity ratios  assess how efficiently a company is using its assets. Profitability ratios  measure how efficiently and effectively the company is using its assets to generate profit
  15. 15. How is an Organization’s InformationControlled?Managers deal with information controls in two ways: 1. as a tool to help them control other organizational activities 2. as an organizational area they need to control Management Information System (MIS)  A system used to provide management with needed information on a regular basis
  16. 16. What is The BalancedScorecard? Balanced Scorecard  A performance measurement tool that looks at more than just the financial perspective
  17. 17. What are Contemporary ControlIssues? Employee Theft  Any unauthorized taking of company property by employees for their personal use
  18. 18. Contemporary Issues (cont.) Workplace Violence  “According to the U.S. National Institute of Occupational Safety and Health”, 2 million American workers per year are victims of some type of workplace violence

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