© Prentice Hall, 2002 19 - 1 Modern Management 9 th edition.

© Prentice Hall, 2002 19 - 1

Modern Management9th edition

.


Objectives

• A definition of control

• A thorough understanding of the controlling subsystem

• An appreciation for various kinds of control and for how each kind can be used advantageously by managers

• Insights into the relationship between power and control

• Knowledge of the various potential barriers that must be overcome to implement successful control

• An understanding of steps that can be taken to increase the quality of a controlling subsystem

.


THE FUNDAMENTALS OF CONTROLLING

Defining Control

Defining Controlling

The Controlling Subsystem

The Controlling Process

Measuring Performance

How to Measure

What to Measure

.



Figure 19.1Relationship between overall management system

and controlling subsystem.



Figure 19.2The controlling subsystem

.



Defining Controlling (con’t)The Controlling Process (con’t)Comparing Measured Performance to Standards

GE's standards:1. Profitability standards2. Market position standards3. Productivity standards4. Product leadership standards

5. Personnel development standards6. Employee attitudes standards7. Social responsibility standards8. Standards reflecting relative balance between short- and long-range goals

American Airlines standards:1. 95% accuracy on posted flight arrival times2. No more than 5 minute wait for 85% of customers at ticket counter

.



Defining Controlling (con’t)

The Controlling Process (con’t)

Taking Corrective Action

Recognizing Problems

Recognizing Symptoms

.



Types of Control

Precontrol

Concurrent Control

Feedback Control

.


THE CONTROLLER AND CONTROL

The Job of the Controller

Works with these organizational financial dimensions:1. Profits

2. Revenues3. Costs4. Investments5. Discretionary expenses

How Much Control Is Needed?

Cost-benefit analysis

.



Table 19.1Sample Job Description for a Controller in a Large Company

(part 1 of 2)

ObjectivesThe controller (or comptroller) is responsible for all accounting activities within the organization.

Functions1.General accounting—Maintain the company’s accounting books, accounting records, and forms.

This includes:a. Preparing balance sheets, income statements, and other statements and reportsb. Giving the president interim reports on operations for the recent quarter and fiscal year to datec. Supervising the preparation and filing of reports to the SEC

2.Budgeting—Prepare a budget outlining the company’s future operations and cash requirements.

3.Cost accounting—Determine the cost to manufacture a product and prepare internal reports for management of the processing divisions. This includes:

a. Developing standard costsb. Accumulating actual cost datac. Preparing reports that compare standard costs to actual costs and highlight unfavorable differences

.



Table 19.1Sample Job Description for a Controller in a Large Company

(part 2 of 2)

4.Performance reporting—Identify individuals in the organization who control activities and prepare reports to show how well or how poorly they perform.

5.Data processing—Assist in the analysis and design of a computer-based information system. Frequently, the data-processing department is under the controller, and the controller is involved in management of that department as well as other communications equipment.

6.Other duties—Other duties may be assigned to the controller by the president or by corporate bylaws. Some of these include:

a. Tax planning and reportingb. Service departments such as mailing, telephone, janitors, and filingc. Forecastingd. Corporate social relations and obligations

RelationshipThe controller reports to the vice president of finance.

.



Figure 19.3Value of additional controlling

.


POWER AND CONTROL

A Definition of Power

Total Power of a ManagerPosition power

Personal power

Steps for Increasing Total Power1. Sense of obligation toward manager

2. Belief that manager possesses high level of expertise3. Sense of identification with manager4. Perception of dependency on manager

.


PERFORMING THE CONTROL FUNCTION

Potential Barriers to Successful Controlling

Long-Term Versus Short-Term Production

Employee Frustration and Morale

Filing of Reports

Perspective of Organization Members

Mean Versus Ends

.


PERFORMING THE CONTROL FUNCTION

Making Controlling Successful

Specific Organizational Activities Being Focused On

Different Kinds of Organizational Goals

Timely Corrective Action

Communication of the Mechanics of the Control Process

.


Chapter Nineteen

Questions

© Prentice Hall, 2002 19 - 1 Modern Management 9 th edition.

Documents

Transcript of © Prentice Hall, 2002 19 - 1 Modern Management 9 th edition.