Chapter 10: Controlling Flashcards
What are the activities of controlling?
Monitoring performance
Compare with goals
Taking corrective actions
What is control?
Making something happen the way it is planned
What is organisational control?
Systematic process
Regulating organisational activities
Make them consistent with expectations
Established in plans, targets and standards of performance
What are the reasons why control is needed?
Adapting to change and uncertainty
Detecting irregularities and errors
Reducing costs, increasing productivity or adding value
Identifying opportunities
Dealing with complexities
Decentralizing decision-making and facilitating teamwork
Why is there uncertainty?
Organisational goals are future-ordinated
Set on basis of present knowledge
What are the factors in environment that can change?
Consumer demand
Technology
Availability of raw materials
How do managers use control to adapt to change and uncertainty using control systems?
Monitor specific activities
React quickly to significant changes in environment
What are examples of undesirable irregularities?
Product defects
Cost overrun
Staff turnover
Customer complaints
How do controls help in irregularities?
Defect early
Save large amt. of resources later on
How do control systems reduce cost?
Labour costs
Eliminate waste
How do control systems increase productivity?
Increase output
Increase delivery cycles
Control adds value to a
Product
How do controls help managers identify opportunities?
By highlighting situations
Alert of opportunities that would’ve gone unnoticed
What situations of opportunities are there?
Competitive prices on materials
Changing population trends
New overseas markets
When will an organisation face complexity?
Grows larger
engage in more operations and projects
What does control help in when there are complexities?
Coordination of major elements
When a complex situation is well coordinated, the organisation can
Run smoothly
Control helps decentralize decision making from what to what?
Top management
Lower levels
When decision making is decentralized, what is encouraged?
Employees to work together in teams
What are the 3 levels of planning?
Strategic
Tactical
Operational
Strategic control corresponds to which managerial level?
Top managers
Tactical control corresponds to which managerial level?
Middle
Operational control corresponds to which managerial level?
First line (supervisory)
What is the responsibility for mangers when dealing with controls at each level?
Establish
Evaluate
How are plans and controls related at the different levels?
Controls monitor effectiveness of a plan
What is monitored at strategic controls?
Criticism environment factors. affecting strategic plans
Assess effects of organisational strategic actions
Proper implementation of strategic plans
What are the environmental factors monitored in strategic control?
Competitor actions Political changes Volatility in customer needs Economic shifts Technological change
The environmental factors can pose as both a
Threat
Opportunity
Why is strategic control done by the top management?
They have an organisation-wide perspective
What is the time frame for strategic controls?
Long-term
Quarterly, annually, one decade
The exact time frame of the strategic control is reliant on?
The nature of the business
What does tactical control involve?
Assess implementation of tactical plans at departmental level objective
Monitor periodic results
Taking corrective action
Monitor specific internal and external factors that affect tactical plans
What are internal forces that affect tactical plans of RandD department?
Excessive spending
Slipping project schedules
What are external environmental forces that affect the tactical plans of a marketing department?
Competitors prices
Evaluating market share
Why are middle managers involved in tactical control?
Know departmental level objectives
Programmes
Budgets
What are the time frames for tactical controls?
Periodic
Middle term
What is done at the end of the time frame of tactical control?
Reporting
What are exams of tactical control reports?
Managerial reports
Financial reports
Performance reports
Customer survey
What is involved in operational control?
Over implementation of operating and
Monitor day to day results
Taking corrective actions
What is the time frame for operational control?
Short term
What do first line supervisors do at the end of the time frame of a operational control?
Give feedback
What is operational control concerned about
Budgets Standards Schedules Rules Specific outputs associated with particular individuals
What is the scope of control also known as?
Area of control
What are the areas of control?
Physical resources
Human resources
Information resources
Financial resources
The different scopes make up different parts of an
Organsation
What is controlled in physical resources control?
Buildings
Equipment
Tangible products
What are examples of physical resources control?
Inventory control
Quality control
What is inventory control?
Ensure stocking not too few or many units
What does quality control ensure?
Products are built to acceptable standards
What does human resources controls regulate?
Employee performance and behaviour
What is the intention of human resources control?
Improving capabilities of employees
What are examples of human resources controls?
Stricter hiring policies
Training programmed
Implementing rewards, bonuses
What does information resources control involve?
Generation of production schedules
Sales and marketing forecasting
Analysis of competition, environment
What is controlled in financial resources control?
Money
Budget
What is monitored in financial resources control?
Cost
Expenses
Profit and loss
accounts receivable/ payable
When can controls be established?
Before
During
After
Workflow
What is precontrol also known as ?
Feed forward controls
When do feed forward controls take place?
Before work is performed
What do feed forward controls intend to do?
Prevent anticipated problems, future oriented
Eliminating behaviour that cause undesirable work results
What is done in feed forward control?
Establish
Rules
Procedures
Policies
What doe feed forward controls control in financial, physical, human and information resources?
Quality and quantity
when do feed forward controls control financial, physical, human and information resources?
Before they become part of the system
When is concurrent control done?
While work is being performed
What do concurrent controls intend to do?
Minimize problems as they occur, present oriented
All aspects of performance are consistent with established standards
Why do human, equipment etc… Have to be checked if they are consistent with established standards?
Problems and errors can be corrected
Become too difficult or expensive
What do concurrent controls monitor?
Ongoing activities
When is feedback control done?
After work is completed
What does feedback control intend to do?
Correct problems that have already occurred, past oriented
Take corrective action in order to bring performance back to planned level
What is an example of feedback control?
Performance appraisal review
What are the styles of implementing controls?
Bureaucratic
Decentralized
Bureaucratic approach is also known as
Traditional
The styles of implementing controls is known as
Managerial approaches
The managerial approaches represent a company’s
Corporate culture
What does bureaucratic control involve?
Administrative and system elements
Formal mechanisms
What are examples of bureaucratic control?
Rules and procedures
Hierarchy of authority
Management control systems
Technology
What does Hierarchy of authority rely on for control?
Central authority
Personal supervision
Because of hierarchy of authority, who are not expected to participate in control process?
Lower level employees
Management control systems have what nature?
Quantitative
Measure performance
In management control systems, what are the examples of formal mechanisms?
Budgeting
Financial reporting
What is technology used for?
To define the speed and standards at which workers must perform
The speed at which workers perform is known as?
Flow and pace of work
Standards that workers must attain is also known as
Employee performance
What is decentralized control based on?
Values Beliefs Traditions Corporate culture Shared norms Informal relationships Trust
Decentralized control generates compliance
To attain organisational goals
When employees are trusted, the managers do not require
Extensive rules
Supervision
Employees are trusted to
Perform correctly
Willingly
What is the emphasis for decentralized control? Not?
Motivation
Not authority
What are the elements associated with decentralized control?
Corporate culture
Peer group control
Self control
Technology
How can corporate culture be a strong control device?
If it is strong
Established values are consistent with goals and culture
When there peer control is established, what is not required
Top down bureaucratic control
What is self control also known as?
Self discipline
What does self control keep employees doing?
Performing their tasks up to standard
Greater self control also means managers need to
Empower
Empowering gives employees a greater sense of
Responsibility
Pride
How is technology used in decentralized control?
To empower employees
Give them information to make effective decisions
What is the controlling process?
Establish performance standards
Measure performance
Compare performance against standards
Take corrective actions
Major controls are based on
Organisational goal and objective
Establishment of performance standards is done after?
Development of strategic plan
What is evaluated in standards of performance?
Activities
Why is there a need for performance standards?
Help employee understand expectation
Enable detection of deficiencies
Helps reduce negative effects of incompatibility of goals of organisational members
To ensure achievement of organisational objectives
What does a manager consider in measuring performance ?
How to measure actual performance
How often
The means of measuring performance depends on the
Standard set
Examples data of standards include
Units produced
Number of defects
Quality of output
Amount of materials
What are the two performance measures?
Qualitative
Quantitative
What do you compare in step 3 of the controlling process?
Actual performance to performance standards
Actual versus planned
The comparison are based on information provided in
Reports
What does corrective action aim to do?
Bring organisational performance to the level of performance standard
What does management need to ensure before taking drastic corrective action?
Standards are relevant, valid, and reliable
Why corrective actions can be taken to bring the level of performance up?
Performance indicators are symptoms, not the cause
How does the management identify the problem to correct?
Use their judgement
When is corrective action not required?
Performance meets or exceeds standards
When standards are met or exceeded, what is to be done?
Positive reinforcement
Recognition
What are examples of corrective actions?
Making employees work harder
Redesign the production process
