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MGMT6072 Introduction To Management and Business: Week 5

The document discusses controlling and monitoring in management. It defines controlling as the process of monitoring, comparing, and correcting work performance to ensure organizational goals are accomplished. The control process involves measuring actual performance, comparing it to standards, and taking corrective action. Organizational performance is measured through productivity and effectiveness. Tools for control include financial ratios, budgets, balanced scorecards, and information systems. Issues addressed are employee theft, violence, and customer service.

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25 views

MGMT6072 Introduction To Management and Business: Week 5

The document discusses controlling and monitoring in management. It defines controlling as the process of monitoring, comparing, and correcting work performance to ensure organizational goals are accomplished. The control process involves measuring actual performance, comparing it to standards, and taking corrective action. Organizational performance is measured through productivity and effectiveness. Tools for control include financial ratios, budgets, balanced scorecards, and information systems. Issues addressed are employee theft, violence, and customer service.

Uploaded by

Sofyy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MGMT6072

Introduction to Management and Business

Week 5

Monitoring and Controlling

1
Outline

What is Controlling and Why is It


Important?

The Control Process

Controlling for Organizational and


Employee Performance

Tools for measuring Organizational


Performance Contemporary Issues in
Control
What Is Control?

• Controlling
- the process of monitoring, comparing,
and correcting
work performance.
• The Purpose of Control
– To ensure that activities are completed in ways that
lead to the accomplishment of organizational goals.
Why Is Control
Important?
• As the final link in management functions:
– Planning
• Controls let managers know whether their goals and plans
are on target and what future actions to take.
– Empowering employees
• Control systems provide managers with information and
feedback on employee performance.
– Protecting the workplace
• Controls enhance physical security and help minimize
workplace disruptions.
Exhibit 18-1: Planning-
Controlling Link
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 inadequate standards.
Exhibit 18-2:
The Control Process
Measuring:
How and What
We Measure
• Sources of • Control Criteria (What)
Information – Employees
(How) • Satisfaction
– Personal • Turnover
observation • Absenteeism
– Statistical reports – Budgets
– Oral reports • Costs
– Written reports • Output
• Sales
Exhibit 18-3:
Sources of Information
for Measuring Performance
Comparing
Actual Performance
Against the Standard

• Determining the degree of variation between


actual performance and the standard
• Range of variation - the acceptable
parameters of variance between actual
performance and the standard.
Exhibit 18-4:
Acceptable
Range of Variation
Taking
Managerial Action

• Immediate corrective action - corrective action that


corrects problems at once in order 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.
Exhibit 18-5:
Green Earth Gardening
Supply — June Sales
Exhibit 18-6:
Managerial Decisions
in the Control Process
What Is Organizational
Performance?

• Performance - the end result of an activity.

• Organizational performance - the accumulated

results of all the organization’s work activities.


Measures of
Organizational Performance

• Productivity - the amount of goods or services produced


divided by the inputs needed to generate that output.
• Organizational effectiveness - a measure of how
appropriate organizational goals are and how well those
goals are being met.
Types of Control
• Feed forward control -
control that takes place before
a work activity is done.

• Concurrent control - control


that takes place while a work
activity is in progress.
Types of Control (cont.)

• Feedback control - control that takes


place after a work activity is done.

• Management by walking around - a term


used to describe when a manager is out in
the work area interacting directly with
employees.
Exhibit 18-8:
Types of Control
Financial Controls
• Traditional Controls
– Ratio analysis
• Liquidity
• Leverage
• Activity
• Profitability
– Budget Analysis
• Quantitative standards
• Deviations
Exhibit 18-9: Popular Financial
Ratios
Exhibit 18-9: Popular Financial
Ratios (cont.)
What is the
Balanced Scorecard?
• Balanced scorecard - a performance
measurement tool that examines more
than just the financial perspective.
– Measures a company’s performance in four areas:
• Financial
• Customer
• Internal processes
• People/innovation/growth assets
Information Controls

• Management information system (MIS) - a


system used to provide management with
needed information on a regular basis.
• Data - an unorganized collection of raw,
unanalyzed facts (e.g., an unsorted list of customer
names).
• Information - data that has been analyzed and
organized such that it has value and relevance to
managers.
Benchmarking of Best
Practices
• Benchmarking - the search for the best
practices among competitors or non-competitors
that lead to their superior performance.
• Benchmark - the standard of excellence to
measure and compare against.
Workplace Concerns

• Employee theft - any unauthorized


taking of company property by
employees for their personal use.
Exhibit 18-11:
Controlling Employee Theft
Exhibit 18-11:
Controlling Employee Theft
(cont.)
Exhibit 18-12:
Controlling Workplace Violence
Exhibit 18-12:
Controlling Workplace Violence
(cont.)
Customer Interactions

• Service profit chain - the service sequence


from employees to customers to profit.
• Corporate governance - the system used to
govern a corporation so that the interests of
corporate owners are protected.
Thank You

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