Controlling, management principle and organisational behavior, mpob

7/30/2019 Controlling, management principle and organisational behavior, mpob

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Management Control is the process of ensuring thatactual activities conform to planned activities.

In other words we can say it is the process orientedto verify:

1) The advancement status of the plannedobjectives, and

2) The efficacy and efficiency of the organization

through the analysis of the resources, costs and

proceeds.


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The process of controlling helps in :1) Making plans effective.2) Making sure that organizational activities are

consistent.

3) Making organizations effective.4) Making organizations efficient.

5) Providing feedback on project status.6) Aiding decision making.

Therefore controlling can be viewed as monitoringperformance against a plan and then makingadjustments either in the plan or in operations asrequired.


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FEEDFORWARD CONTROLS:

Also called preliminary or preventive controls.

These attempt to identify and prevent deviations in

the standards before they occur.

Feedforward controls focus on human, material,

and financial resources within the organization.

CONCURRENT CONTROLS

Concurrent control monitor ongoing employee activityto ensure consistency with quality standards.

These controls rely on performance standards, rules,and regulations for guiding employee tasks and

behaviors.


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Their purpose is to ensure that work activities producethe desired results.

oFEEDBACK CONTROLSThese involve reviewing information to determinewhether performance meets established standards.

INPUT PROCESSES OUTPUT


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Establish

StandardsMeasure

Performance

DoesPerform

anceMatch?

Take

Corrective

Action

Do

Nothing


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Standards are criteria against which results aremeasured. They are norms to achieve the goals.Standards are usually measured in terms of output.They can also be measured in non-monetary terms

like loyalty, customer attraction, goodwill etc.Some of the standards are as follows:

a). Time standards

b). Cost standardsc). Income standardsd). Market sharee). Productivity


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Measurement involves comparison between what isaccomplished and what was intended to beaccomplished.

The measurement of actual performance must be in theunits similar to those of predetermined criterion. The unitthus chosen be clear, well-defined and easily identified,and should be uniform and homogenous throughout themeasurement process.

Measurement of performance against standards should

ideally be done on a forward looking basis so thatdeviations may be detected in advance of theoccurrence and avoided by appropriate actions.


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Deviation is the gap between actual performanceand the planned targets.

There are two important points here :

1) Extent of deviation : means whether the deviationis positive or negative or whether the actualperformance is in conformity with the plannedperformance.

2) Cause of Deviation :

Erroneous Planning Coordination loosens Defective implementation of plans Ineffective supervision and communication etc.


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Controlling to be effective, should involve not only thedetection of lapses but also probe into the failurespots, fixation of responsibility for the failures at the rightquarters, recommendation of the best possible steps tocorrect them.

The primary objective should be avoidance of suchfailures in future.

The required corrective action can be determinedfrom the qualified data as per the standards laid outand the performance evaluation already done.

Corrective action must be well balanced, avoidingover controlling and at the same time letting not thingsto drift.


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TO

CREATE

BETTER

QUALITY

TO

COPE

WITH

CHANGE

TO

CREATE

FASTER

CYCLES

TO

ADD

VALUE

TO

FACILITATE

DELEGATI

ON

AND

TEAMWOR

K


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selecting strategiccontrol points

Identifying strategiccontrol points

Identifying keyperformance areas


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These areas involve majororganizational activitiesthat must functioneffectively for entireorganization to succeed.

In todays organizationmany KRAs are cross

functional.

KeyPerformance

AreasOr

Key ResultAreas


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These are critical points in the

system where monitoring orinformation collection shouldoccur.

Strategic controlpoints

Focus on the most significantelements in a given

operation. Focus on places where

changes occurs in aproductive process.

Methods of

selectingstrategic control

points


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Controlling has two basic purposes:

1) It facilitates co-ordination.2) It helps in planning.

Controlling is an end function.

It is a pervasive function.

It facilitates coping with the environment.

Control is people-oriented.

Controlling is a forward looking process.


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It is a dynamic and continuous process.

It is a corrective action.

Controlling is an exercise at all levels in themanagement hierarchy.

It guides behavior of the people and use of resourcesand facilities for carrying out different activities oroperations.


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Managers use a series of control methods andsystems to deal with the differing problems andelements of their organizations. These methods arecapable of taking many forms and can beintended for various groups.

Control techniques provide managers with thetype and amount of information they need tomeasure and monitor performance. The

information from various controls must be tailoredto a specific management level, department, unit,or operation.


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These have a special prominence as money is easy to

measure and tally. Financial statements are used to track the monetary

value of goods and services into and out of theorganization.

They help monitor 3 major financial conditions of anorganization:

a) LIQUIDITY

b) GENERAL FINANCIAL CONDITION

c) PROFITABILITY

Financial statements could be prepared yearly,quarterly or monthly. They include income statements,balance sheets, and cash flow statements.


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Balance Sheet: This tells how the organization

stacks up financially at a particular point in time. Itis the description of the organization in terms of itsassets, liabilities and net worth.

Income Statement: This summarizes the companys

financial performance over a given interval oftime.

Cash Flow Statements: This also known as

Statement of Sources and Uses of Funds. Theseshow where have cash or funds come from duringthe year, and where have they been applied.


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Budgets are formal quantitative statements of theresources set aside for carrying out plannedactivities over given periods of time. Thus they arewidely used means for planning and controllingactivities.

They establish clear and unambiguous standards ofperformance for a set time period. At stated timeintervals actual performance is compared directlywith the budget and thus deviations can easily andquickly detected and acted upon.

Budgetary controls are used in various responsibilitycenters, which is any organizational function or unitheaded by a manager who is responsible for theactivities of that unit.


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All responsibility centers use resources i.e. inputs orcosts, to produce outputs or revenues.

The decision usually depends on the activityperformed by the organizational unit and on themanner in which inputs and outputs are measuredby the control system.

REVENUE

CENTERS

EXPENSE

CENTERS

PROFIT

CENTERS

INVESTM-ENT

CENTERS


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It is used for validating the honesty and fairness offinancial statements, providing a critical basis formanagement decisions, etc.,.

Two types of auditing are used.

1) External Auditing : A verification process involvingthe independent appraisal of the organizationsfinancial accounts and statements. Assets andliabilities are verified and financial reports arechecked for completeness and accuracy.

2) Internal Auditing : It is carried out by the membersof the organization only. This provides areasonable assurance that the assets are beingproperly safeguarded and all records are being

kept reliably.


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Marketing controls help monitor progress towards the

goals for customer satisfaction with products andservices, prices, and delivery.

1) Market research: gathering data to assess customerneeds which is an information critical to anorganization's success.

2) Test marketing: a small-scale product marketing toassess customer acceptance. It makes use of surveysand focus groups.

3) Marketing statistics: measure performance bycompiling data and analyzing results. It makes useof marketing ratios, which measure profitability andmarket shares, as well as sales quotas, whichmeasure progress towards sales goals and assist with

inventory controls.


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It means to measure the cost and value of the

people (i.e. of employees , managers, etc.,) in theorganization.

It helps managers regulate the quality of newly hiredpersonnel, as well as monitor current employees'

developments and daily performances. Managers can help control workers' behavior in the

organization by directing workers' performancestowards well defined goals by making sure that the

goals are clearly set and understood. Common control types include performance

appraisals, disciplinary programs, observations, andtraining and development assessments.


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It is the way the organization transforms inputslabor, money, etc.,- into outputsgoods orservices.

It refers to the complex set of managementactivities involved in planning, organizing, leading,

and controlling an organizations operations.

INPUT

(Resources)HUMANCAPITAL

LANDTECHNOLOGY

TRANSFORMATI-ONOR

CONVERSIONPROCESS

FEEDBACK

EXTERNALENVIRONMENT

OUTPUTGOODS

SERVICESOTHERS


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The feedback loop represents the information

gained by people at an organization during theentire process.

This information makes it possible for them to

monitor the systems performance and decidewhether corrective changes are needed.

Thus it can be said that operations management is

important for it can help improve productivity andalso help organizations meet customerscompetitive priorities.


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A PERT chart is a graphicrepresentation of a projectsschedule, showing thesequence of tasks, which taskscan be performed

simultaneously. The chart can be constructed

with a variety of attributes, suchas earliest and latest start datesfor each task, earliest and latestfinish dates for each task, andslack time between tasks.

The chart allows a team toavoid unrealistic timetables andschedule expectations, to helpidentify and shorten tasks that

are bottlenecks, and to focusattention on most critical tasks.

D1

D2

D3

D4

D5

D6


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The Critical Path Method or Critical Path Analysis, is amathematically based algorithm for scheduling a setof project activities.

It is an important tool for effective projectmanagement commonly used with all forms ofprojects, including construction, softwaredevelopment, research projects, productdevelopment, engineering, and plant maintenance.

Any project with interdependent activities can apply

this method of scheduling.


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Only with accurate and timely information can amanager monitor progress towards their goal andturn plans into reality.

Information system enables managers to controlhow they do business.

The computer plays a vital part in the control ofbusiness operation.

Information it self as a valuable asset one that

needs to be carefully managed and protected.


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Informationquality

Informationtimeliness

Informationquantity

Informationrelevance


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*EDP: electronic data- processing- computerizeddata- processing and information management ,including report standardization for operatingmanager.

*CBIS: computer based information systems -information system that goes beyond the merestandardization of data to aid in the planningprocess..

*DSS: decision support system - computer supportsystem, computer system accessible to nonspecialists

to assist in planning and decision.


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Operational control : an MIS for operational control

must provide highly accurate and detail information ona daily or weekly basis. The MIS must provide a highvolume of timely and detailed information derived fromdaily operation.

Middle management : the type of information middlelevel managers require consist of aggregate data fromwithin the organization as well as from resources outsidethe organization .

Top management : the MIS must provide information forstrategic planning and management control. Forstrategic planning, the external sources of informationon economic conditions, technological developments,the actions of competitors assume paramount

importance.


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Planning and controlling are two separate functions

of management, yet closely related. Withoutplanning, controlling activities becomes baseless andwithout controlling, planning becomes a meaninglessexercise. In the absence of controlling, no purposecan be served by.

Thus it is rightly said Planning precedes controlling andcontrolling succeeds planning. Activities are put onrails by planning and they are kept at right placethrough controlling.

They work on Systems Approach which is as followsPlanning Results Corrective Action


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CONTEMPORARYISSUESIN

CONTROLCross Cultural Differences

Workplace Concerns

1)Workplace privacy versus workplace monitoring.2)Employee theft.3)Workplace violence.

Customer Interactions

Corporate Governance


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Controlling, management principle and organisational behavior, mpob

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