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Management
Fundamentals
Editing By
Gio
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Index
1. Management Management A Profession
The Importance Of Management
What is Management
Definition Of management
Management & Organizational Resources
Management Functions & Process
Management Roles
Management Skills
Management , Science Of Art
The Universality Of Management
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2. Planning Definition Of Planning
Purposes Of Planning Primacy Of Planning
Steps In Planning Process
Organizational Objectives Or Goals (Planning Function)
Types Of Goals
Types Of Plans
Planning Tools & Techniques
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3. Decision - Making
Defining of Decision
Types of Decision
The Decision Making Process The Decision Making Steps
Decision Making Conditions
The Pervasiveness Of Decision Making Planning
Organizing Leading
Controlling
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4. Organizing Definition Of Organizing
Some Purposes Of Organizing
The Organizing Process
Organizational Structure
Organizational Design
Work Specialization
Departmentalization Chain Of Command
Span Of Control
Centralization & Decentralization
Formalization
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5. Influencing Definition Of Influencing
The Influencing Sub System
Leading
Motivating
Considering Groups
Communicating
Interpersonal Communication
Organizational Communication
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6. Leadership Definition Of Leadership
Leader vs. Manager
The Trait Approach to Leadership
The Situational Approach to Leadership
Determining How to Make Decision as a Leader
The (VYJ) decision style
The (OSU) decision style
The Michigan studies
Effectiveness of various Leadership Styles
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7. Motivation Definition Of Motivation
Strategies for motivating organization members
Managerial Communication
Theory X Theory Y
Job Design
Behavior Modification
Likerts Management Systems
Monetary Incentives
Non-Monetary Incentives
Considering Groups
Kinds of Group in Organizations
Formal Groups Informal Groups
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8. Controlling Definition Of Controlling
The Controlling Process
Measuring performance
Comparing measured performance to standards
Taking corrective action
Types Of Control
Pre-control of feed forward control
Concurrent control
Feedback control
Qualities of an Effective Control System
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Definition
management is a process of reaching organizational goals by working with and
through people and other organizational resources.
its also the process of coordinating work activities so that theyre completed
effectively and efficiently completing with and through people and other resources
theres three main characteristics
1. Its a process or series of continuing and related activities
2. It involves and concentrated on reaching organization goals
3. It reaches these goals by working with and through people and other
organizational resources .the process represents the ongoing functions or primary activities engaged by
mangers
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Efficiency
Do things right its getting the most output from the least amount of input .
Because managers deal with scarce inputs (people, money, equipment) theyre
concerned with the efficient use of resources and not wasting them .
Effectiveness
Do the right things the work activities help the company to reach its goals or its
completing activities so that the organizational goals are attained
efficiency is concerned with the means of getting thongs done, effectiveness is
concerned with the ends, or attainment of organizational goals .
Goal
Attainment
Resource
Usage
Efficiency (means) Effectiveness (ends)
High AttainmentLow Waste
Management strives for
Low resource waste (high efficiency)
High goal attainment (high effectiveness)
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Management Function and Process
Planning
Organizing
Leading
Controlling
management process is the set of ongoing decisions and work activities in which
managers engaged as they plan, organize, lead, and control .
Management Roles
managers perform a lot of different but high interrelated roles
1. Management rolesits the specific categories of managerial behavior
1. The interpersonal roles
are roles that involves people (subordinates and persons outside the company) and
other duties that are ceremonial and symbolic in nature
1. The informational roles
Involves receiving collection, and disseminating information.1. The decisional roles
revolve around making choices and includes roles as businessman, disturbance
handler, resource allotment, and negotiator.
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Management Skills
1. Technical Skills
include knowledge of and proficiency in a certain specialized field . These skills
are more important at lower levels of management since these managers are
dealing directly with employees doing the company work
2. Human Skills
its the ability to work well with other people. managers knows how to
communicate, motivate lead, and inspire enthusiasm and trust. These skills are
equally important at all levels of management
3. Conceptual Skills
are the skills managers must have to think and to conceptualize about abstract
and complex situation. These skills are most important at the top management
level
Top
Mana-gement
Middle
Management
Supervisory or
Operational Management
Conceptual
Skills
Human
Skills
Technical
Skills
Needs
Needs
Needs
Management
Levels
Skills
Needed
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Management Universality
management is needed in all types and sizes of organizations, at all organizational
levels, in all organizational work areas, and in all companies, no matter in what
country theyre located.
All Organizational AreasManufacturing-Marketing
Human Resources
Accounting Information
System.
All Sizes of
Organizations
Small Large
Management isNeeded in..
All Types of
Organizational
Profit not-for Profit
All Organizational
Levels
Bottom Top
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PlanningPlanningPlanningPlanning
Definition
Planning is establishing an overall strategy for achieving the organizations goals
and developing a comprehensive set of plan to integrate and coordinate
organizational work .Its concerned with both ends (whats to be done) and means
(how its to be done) .
Planning Purposes1. Planning gives direction .
2. Reduces the impact of change .
3. Minimizes waste and redundancy .
4. Sets the standards used in controlling .
Planning Process Steps
1. State the organizational objectives .2. List alternative ways of reaching objectives .
3. Develop premises how and which alternative to be based .
4. Choose the best alternative for reaching objective .
5. Develop plans to pursue the chosen alternative .
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Goals Types
1. Stated Goals
are official statements of what the company says, and what it wants its
stakeholders to believe about the goals. They can be found in an organizationscharter, annual reports, or managers public statements.
2. Real Goals
are goals that a company actually pursues-closely show what organizational
members are doing .
Compare between Financial and Strategic Objectives
Financial Objectives Strategic Objectives
Faster revenue growth
Faster earning growth
Higher profit margins
Higher return on invested capital
Stronger bond and credit
Bigger cash flows Arising stock price
A more diversified revenue base
Stable earnings during recessionaryperiods
A bigger market share
A higher more secure industry rank
Higher product quality
Lower costs relative to key competitors
More attractive product line
A stronger reputation with customers Superior customer service
Recognition as leader to complete in
international markets
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Plans Types
A. Types Plans according to their Breadth
2. Strategic Plans
are plans that apply to the whole company ,establish the overall goals and seek toposition the company in its environment terms
2. Operational Plans
are plans that specify the details of how to achieve the overall goals
Compare between two Types
Strategic plans covers the a longtime frame and broader of the company , and also
include the formulation of goals because operational plans define ways to achievethe goals . Operational plans covers the short time periods (monthly, weekly, andday to-day)
B. Plans Types according to Timeframe
1. Long-term Plans
plans with a time frame three years and more
2. Short-term Plans
one year or less
3. Intermediate Plans
is any time in between
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C. Plans Types according to Specificity1. Specific Plans
are clearly defined . They have specifically stated objectives . Theres no uncertainand no problem with misunderstanding .
2. Directional Plansare flexible plans that set out general guidelines .
D. Plans Types according to Use Frequency1. A single-use Plans
is a one-time plan specifically designed to meet the needs of a unique situation .
2. Standing Plansare plans provide direction for activities performed repeatedly, and includepolicies, rules ,and procedure .
Planning Tools and Techniques1) Environment Assessing TechniquesB. Environmental Scanning
is the screening a large amounts of information to anticipate andinterpret changesin the environment .
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B. Forecasting
this can used by managers to assess the environment is forecasting. Forecasting
is an important part of organizational planning. Environment scanning creates the
foundation for forecasts, which are predication of outcomes
Forecasting Techniques
Quantitative Forecasting
applies a set of mathematical rules to a series of past data to predict outcomes.
These techniques are preferred when managers have sufficient hard data that
can be used .
Qualitative Forecasting
it uses the judgment and opinion of knowledgeable individuals to predict
outcomes. its used when precise data are limited or hard to obtain.
Benchmarking
this is the search for the best practices between competitors or non competitors
that lead to their superior performance . The basic idea behind benchmarking isthat managers can improve quality by analyzing and then copying the methods of
the leaders in various fields .
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2) Resources Allocating Techniques
resources are the assets of the company and include
Financial (debt, equity, retained, earning, and other financial holdings ).
Physical (equipment, building, raw materials, or other real assets ).
Human (experiences, skills, knowledge, and qualification of people ).
Immaterial (brand name, patents, reputation, trade marks, copy right, registered
designs, and databases, structural ).
Cultural (history, culture, work system, working, relationships, levels of trust,
policies, and structure ).and there is four techniques
Budgeting
is a numerical plan for allocating resources to specific activities . Managers
typically prepare budget for revenues, expenses, and large capital expenditures.
Scheduling
is detailing what activities have to be done, and which theyre to be completed,
whos to be each, and when . Some useful scheduling devices are Gantt, Load
charts, and PERT network analysis .
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Variable Budget
Takes into account the costs that vary withvolume
Fixed Budget
Assumes fixed level of sales or production
Cash Budget
Forecasts cash on band
and how much will be
needed
Revenue Budget
Project future sales
Expense Budget
Lists primary activities and allocate
monetary amount to each
Profit Budget
Combines revenue and expense budget of various units
to determine each units profit contribution
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Break-even Analysis
is a technique for identifying if only the total revenue is just sufficient to cover total
cost . It points out the relationship between revenues, costs, and profits .
Linear Programming
is a mathematical technique solves resource allocation problems .
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Decision-MakingDecision-Making
Definition
Decisionis choice made between two or more available alternatives .Decision-Making is process of choosing the best alternative to reach objectives.
Decisions Types :
1. Programmed Decisionare routine and repetitive, and the company develops specific ways to handle them
. Procedure
Its a series of interrelated sequential steps that manager can use for respondingto a structured problem .
Rule
Its clear statement that tells manger what he can do . Rules used for facing a well-structured problem because they are simple to follow and ensure consistency
stability . ex. Rules about lateness and absenteeism . Policy
put guidelines to limit managers thinking in specific direction . Different from rule,policy establish parameters for decision maker rather than specifically stating whatshould or should not to be done
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Technological factors (the level of company technology may be not fit for certain
alternatives ) .
Economic factors (certain alternatives may be too costly for the company ) .
3. Selecting the most beneficial alternative
the evaluation should consist of three steps
first :decision maker should list the potential effects of each alternatives Second : they should assign a probability factor to each potential effects to show
how probable the effect occurrence would be if the alternative were carried out .
Third : keeping company goals in mind, decision maker should compare eachalternatives expected effects and the respective probabilities of those effects .
after completed this steps. Manager the most advantageous of alternative to thecompany .
4. Implementing the chosen alternative
put the chosen alternative into action . Decision must be supported by appropriateaction to have a chance of success .
5. Evaluating decision effectiveness
decision makers must gather feedback to determine the implementing alternativeeffect on the identified problem . If the identified problem is not being solved,managers need to search out and implement some other alternative .
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Decision-Making Conditions
* Complete Certainty Condition
Its the decision-making situation in which the decision maker knows exactly what
the results of a carried out alternative will be .
* Complete Uncertainty Condition
Used if the decision maker has no idea about the results of carried out alternative .
* Risk Condition
It means the decision maker has only enough information to estimate about the
implemented alternatives outcome .
The Decision-Making Pervasiveness Plan
Organize
Lead
Control
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OrganizingOrganizing
Definition
Organizing is the process of establishing orderly uses for all companys resources.
Its also the process of creating a companys structure . The challenge for
managers is to design an organizational structure that allows employees to
effectively and efficiently do their work .
Some Organizing Purposes Divides work into specific jobs and department .
Assign tasks and responsibilities associated with individual jobs .
Coordinate diverse organizational tasks .
Cluster jobs into units .
Establish relationships among individuals, groups, departments .
Establish formal lines of authority
Allocates and deploys company all resources .
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The Organizing Process
1. Reflect the companys plan and objectives .
2. Establish major tasks .
3. Divides major tasks into subtasks .
4. Allocate resources and directives for subtasks .
5. Evaluate the result of implemented organizing strategy .
Step 2:
Establish major tasks .
Step 1:
Reflect on plans
and objectives .
Step 3:
Divides major tasks
Into sub tasks .
Step 4 :
Allocate resources and
Directives for subtasks .
Step 5:
Evaluate results of
Organizing strategy.
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Organizational Structure
Is the formal framework about job tasks dividing, grouping, and coordinating .
When managers develop or change an organizations structure, they are engaged
in organizational design .
Organizational Design
Is a process involves decisions about six key elements
1. Work Specialization
Describes the degree to which tasks in an company are divided into separate jobs.
Its also meaning not done by one individual . But is broken down into steps and
each one is completed by different person . Individual employees specialize indoing part of an activity rather than entire activity .
2. Departmentalization
Is the basis by which job are grouped together .
There are five common forms of departmentalization
Functional departmentalization
Product departmentalization
Geographical departmentalization
Process departmentalization
Customer departmentalization
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5. Centralization and Decentralization
Centralization
Describes the degree to which decision-making concentrated at a single point in
the company . If top managers make the companys key decisions with little or noinputs from below then the organization is centralized
Decentralization
Allows lower-level employees provide input or actually make decision .
Centralization and Decentralization Factors
More Centralization
Environment is stable
Lower level managers are not as capable or experienced at making decisions as
upper level managers .
Lower-level managers do not want to have a say in decisions .
Decisions are significant .
Organization is facing a crisis or the risk of company failure . Company is large
Effective implementation of company strategies depends on managers retaining
say over what happens .
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InfluencingInfluencing
Definition
Influencing is the process of guiding the activities of company members in
appropriate directions .
Appropriate Directions
Are those that lead to the attainment of management system objectives .
The Influencing Subsystem1. Leading .
2. Motivating .
3. Considering groups .
4. Communicating .
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Inputs
1. People .
2. Money .
3. Raw materials .
4. Machines .
Output appropriate organization members behavior
Considering
groups
Leading Motivating
Processes
Influencing Process
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Communication
Its the process of sharing information with individuals . In general, communication
involves one person projecting a message to one or more other people that result
in everyones arriving at a common understanding of the message .
Interpersonal Communication
Its the process of transmitting information to others .
1) The Source / Encoder
Its the person in the interpersonal communication situation who originates and
encodes information to be shared with others .
2) The Signal
The message that has been transmitted from one person to another is called
signal (encoded information used to share constitutes a message) .
3) The Decoder / Destination
Its the person or persons who the source tries to share information with .
Decoding
Its the process of converting messages back into information .
Feedback and Interpersonal Communication
feedback is the destinations reaction to a message . Feedback can used by
source to ensure successful communication .
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Formal Organizational Communication Types
1. Downward Organizational Communication
it flows form any point on an company chart downward to another point on the
company chart .
2. Upward Organizational Communication
it flows from any point on company chart upward to another point on the chart .
3. Lateral Organizational Communication
it flows from any point on chart horizontally to another point on chart .
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LeadershipLeadership
Definition
Leadership is the process of directing the behavior of others toward the
accomplishment of some objective or objectives .
Leader Versus Manager
leading is not like managing . But some managers are leaders and some leaders
are mangers, leading and managing have not the same activities.Managing is much wider in range than leading and focuses on both
non-behavioral and behavioral issues .
Leading emphasizes mainly behavioral issues .
The Trait Approach to Leadership
leadership shows the personal characteristics of an individual as the main
determinates of how successful that individual could be as a leader.
management writer agree that leadership ability cant be explained by individual
traits or inherited characteristics, they believe that individual can be trained to be
good leaders .
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Leadership Behavior
It concerned about what good leaders do. Are they concerned on keeping task
done. Or make their followers happy and having high morale.
The Ohio state University (OSU)
Theres two main types of behavior
1. Structured Behavior
Its the activities that
(1) determinates the relationship between the leader and his followers
(2) establishes well-defined procedure that the followers should conform to in
doing their jobs.2. Consideration Behavior
It reflects friendship, mutual trust, respect, and warmth in the relationship between
leader and followers.
Leadership Style
Used by leader to establish the way of guiding the organization members inspecific direction.
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Low
Structure
High
Structure
Low
Consideration
Low
Consideration
High
Consideration
High
Consideration
Low
Structure
High
Structure
High
High
Low
Low
structure
C
ons
idera
tion
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The Michigan Studies
It says theres two basic types of leading behavior
Job-Centered Behavior
It focuses on the subordinates work and performance.
2. Employee-Centered Behavior
It focuses on subordinates humanity (as people) and cares about personal needs
and team player.
Effectiveness of various leadership styles
The desirable leadership behavior is associated with high leader emphasis on both
structure and consideration and the undesirable leadership behaviors isassociated with low leader emphasis on both dimensions. The most effective
leadership style noticed in high consideration and high structure. Results of a more
recent studies shows that high consideration is always preferred by subordinates.
Comparing Styles
one shows that any single leadership style is more effective than any other. The
successful leadership style for managers in one situation may prove ineffective inanother situation.
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MotivationMotivation
Definition
Motivation is the inner state makes everyone in company behaves in a way that
ensures the accomplishment of some jobs .
Motivating Organization Members Strategies
Theres seven strategies
1. Managerial communication .2. Theory X Theory Y .
3. Job design .
4. Behavior modification .
5. Likerts management system.
6. Monetary incentives .
7. Non monetary incentives .
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1. Managerial Communication
Managers should strive to communicate with other company members, because its basic tool
for satisfying the human needs of company members.
2. Theory X Theory Y
Theory X : involves negative assumption about people .Theory Y : involves positive assumption about people and must be used by managers.
Production might be increased by using any theory of X or Y assumption. Depending on the
situation the manager face.
3. Job Design
Job Rotation
Its the process of moving workers form between jobs rather than requiring them to performonly one simple and specialized job over the long term.
Job Enlargement is the process of increasing the number of operations an individual performs
in a job, in order to enhance the individuals situation in work.
Job Enrichment
Its the process of incorporating motivators into a job situation. And motivating factors are
items that influence the job satisfaction degree (achievement opportunity, recognition
opportunity work itself, responsibility, advancement, personal growth) Flextime
or flexible working hours programs, is a program that allows workers to complete their jobs
within a workweek of normal of hours that they arrange themselves .
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4. Behavior Modification
Its a program that focuses on managing human activity by controlling the
consequences of performing the activity. Positive reinforcement is a reward that
consist of a desirable consequence of behavior, and negative reinforcement is
reward that consist of eliminating of an undesirable consequence of behavior.5. Likerts Management System
Includes
- System 1 -this style of management is characterized by a lack of confidence or
trust in subordinates.
- System 2 -this style is characterized by master to servant style confidence
and trust in subordinates.
- System 3 - this style is characterized by substantial, though not complete
confidence in subordinates.
- System 4 - this style is characterized by complete trust and confidence in
subordinates.
styles, systems, and productivity Likert has suggested that as management style
moves from system 1 to 4, the human needs of individuals become moreeffectively satisfied over the long-term.
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6. Monetary Incentives
Its a program or plan allows the team members receive a bonus when their team
exceeds a goal. All plans link pay closely to performance (shares of company
stock as a benefit, lump sum bonuses one time cash payment and gain
sharing) .7. Non Monetary Incentive
This plan makes employees committed and motivated by non-monetary means .
Considering Groups
A group is any number of people who interact with one another, are
psychologically aware of one another, and perceive to be group.
Why should managers study groups
1. Group exist in all kind of organizations .
2. Groups inevitably from in facets of organizational existence .
3. Groups can cause desirable or undesirable consequences within the organization .
4. An understanding of groups can used in rising probability desirable consequences
in company .
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ControllingControlling
Definition
Control is the process of monitoring activities to ensure that they are
being accomplished as planned and correcting any significant deviations.
The Controlling Process
Measuring performance .
Comparing measured performance to standards . Taking corrective action .
1. Measuring Performance
managers must measure correct organizational performance by establishing some
unit of measure that gauges performance and observe the quantity of this unit as
generated by the items whose performance is being measured.
2. Comparing Measured Performance to Standards
after managers have taken a measure of organizational performance, the next
step in controlling is to compare this measure with some standard.
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A Standard
is a level of activity established to serve as a model for evaluation organizational
performance .
3. Take Corrective Action
after actual performance has been measured and compared with established
performance standards, the next step in controlling process is to take corrective
action if necessary .
Corrective Action focuses on correcting organizational mistakes that are slowing
the organizational performance.
Control Types1. Pre-control or Feed forward Control
the control that takes place before work is performed is called per control or feed
forward control . Managers using this type of control to create policies, procedures,
and rules aimed at eliminating behavior that will cause desirable work result .
2. Concurrent Control
Is control that takes place as work is being performed . It relate not only toemployee performance, but also to such non human areas as equipment
performance and department appearance.
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3. Feedback Control
is control that takes place after some unit of work has been performed. Control that
concentrates on past organizational performance is called feedback control.
Managers use this type of control to take corrective action by looking at
organizational history over a specified time period . Theres two advantages overfeed forward and concurrent control
first feedback provides managers with meaningful information on how effective
their planning effort was.
second feedback control can enhance employee motivation.
Input Processes Output
Feed forward
Control
Anticipates
Problems
Concurrent
Control
Feedback
Control
Corrects
Problems as they
Happen
Corrects
Problems after
they Occur
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Qualities of Effective Control System
1. Accuracy
an accurate control system is reliable and produces valid data.2. Timeliness
an effective control system must provide timely information .
3. Economy
any system of control has to justify the benefits that it gives in relation to the costs
it incurs .
4. Flexibility
controls must be flexible enough to adjust to problems or to take advantage of
new opportunities .
5. Understandability
controls that cannot be understood have no value. A control system that is difficult
to understand can cause unnecessary mistakes, frustrate employees, and beignored .
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6. Reasonable Criteria
control standards must be reasonable and attainable if they are too high or
unreasonable, they no longer motivate.
7. Strategic Placement
management cant control everything that goes on in company . Even if it could the
benefits couldnt justify the costs . As a result , managers should place controls on
factors that are strategic to the organizations performance. Control should cover the
critical activities, operations, and events within the organization.
8. Emphasis on the Exception
because managers cant control all activities, they should place their strategic controldevices where those devices can call attention only to the exceptions .
9. Multiple Criteria
if management controls by using a single measure such as unit profit, effort will be
focused only on looking good on that standard. multiple measures of performance
widen this narrow focus.
10. Corrective Actionan effective control system not only indicates when a significant deviation from
standard occurs but also suggests what action should be taken to correct the
deviation .