chap 16 - Management (Wiley): Control Processes & Systems

Basic Financial Ratios

*Liquidity The ability to generate cash to pay bills. *Leverage The ability to earn more in returns than the cost of debt. *Asset management The ability to use resources efficiently and operate at minimum cost. *Profitability The ability to earn revenues greater than costs.

what are the types of controls?

- feedforward controls - concurrent controls - feedback controls

What is the significance of Controlling in the management process?

- to ensure desired results - measure performance - take corrective action

What are the various Control Tools and Techniques?

1. employee discipline 2. project management 3. financial controls 4. balanced scorecards

Internal control or Self-control

Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations.

To be effective, reprimands should

Be immediate. Be directed toward actions, not personality. Be consistently applied. Be informative. Occur in a supportive setting. Support realistic rules.

Employee discipline systems

Discipline is the act of influencing behaviour through reprimand. Discipline that is applied fairly, consistently, and systematically provides useful control. Progressive discipline ties reprimands to the severity and frequency of the employee's infractions. Progressive discipline seeks to achieve compliance with the least extreme reprimand possible.

Feedforward controls

Employed before a work activity begins. Ensures that: Objectives are clear. Proper directions are established. Right resources are available. Focuses on quality of resources.

Concurrent controls

Focus on what happens during work process. Monitor ongoing operations to make sure they are being done according to plan. Can reduce waste in unacceptable finished products or services.

External control

Occurs through personal supervision and the use of formal administrative systems.

Project Management

Overall planning, supervision, and control of projects.

What are the types of Internal & External controls? (5)

Self-control (or Internal Control) External control Bureaucratic control Clan control Market control

What are the 4 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.

Feedback controls

Take place after work is completed. Focus on quality of end results. Provide useful information for improving future operations.

Why are the Four steps in the control process important to managers?

because it helps them to: - know where they're going - how to allocate time and resources - take advantage of available opportunities - assess progress being made

Bureaucratic control

influences behaviour through authority, policies, procedures, job descriptions, budgets, and day-to-day supervision

Market control

influences behaviour through market competition.

Clan control

influences behaviour through norms and expectations set by the organizational culture.

Balanced Scorecard (5 questions to develop scorecards)

tallies organizational performance and measures: Financial performance Customer Satisfaction Internal process improvement Innovation and learning Sustainability