1. Foundation of control

2. Learning Outcomes Explain the nature and importance of control Describe the three steps in the control process Discuss the types of controls organizations andmanagers use Discuss contemporary issues in control 3. Management functions1. Planning2. Organizing3. Leading4. Controlling 4. What is Control? Control The managementfunction thatinvolvesmonitoringactivities to ensurethat theyre beingaccomplished asplanned andcorrecting anysignificantdeviations 5. What is the Control Process? Control Process A three-step process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards 6. How Do Managers Measure?To determine actual performance, a manager mustfirst get information about it. Thus, the first step incontrol is measuringFour common sources of information frequentlyused to measure actual performance are personal observation statistical reports oral reports written reports 7. What is Managing By WalkingAround? Management By Walking Around (MBWA) When a manageris out in the workarea interactingwith employees 8. So MBWA is not that 9. How Do Managers ComparePerformance to Planned Goals? Range of Variation The acceptable parameters of variance between actual performance and a standardDeviations outside this range need attention 10. What Management Action Can BeTaken? Immediate Corrective Action Corrective action that addresses problems at once to get performance back on track Basic Corrective Action Corrective action that looks at how and why performance deviated before correcting the source of deviation 11. When Does Control Take Place? Feedforward Control Control that takes place before a work activity is done Concurrent Control Control that takes place while a work activity is in progress Feedback Control Control that takes place after a work activity is done 12. How Do Managers Keep Track ofFinances? In order to meet profitability goals, managersneed financial controls Traditional financial measures managers mightuse include Ratio analysis Budget analysis 13. Financial Ratios by Type Liquidity ratios measure an organizations ability to meet its current debt obligations Leverage ratios examine the organizations use of debt to finance its assets and whether its able to meet the interest payments on the debt 14. Financial Ratios (cont.) Activity ratios assess how efficiently a company is using its assets. Profitability ratios measure how efficiently and effectively the company is using its assets to generate profit 15. How is an Organizations InformationControlled?Managers deal with information controls in two ways:1. as a tool to help them control other organizational activities2. as an organizational area they need to control Management Information System (MIS) A system used to provide management with needed information on a regular basis 16. What is The BalancedScorecard? Balanced Scorecard A performancemeasurement toolthat looks at morethan just thefinancialperspective 17. What are Contemporary ControlIssues? Employee Theft Any unauthorizedtaking of companyproperty byemployees fortheir personal use 18. Contemporary Issues (cont.) Workplace Violence According to theU.S. NationalInstitute ofOccupational Safetyand Health, 2million Americanworkers per year arevictims of sometype of workplaceviolence