Chapter 6 – Index of Sample Problems

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					             Chapter IV – Controlling

I.    Definition of Controlling
II.   The importance of Controlling
III. Levels of Control
IV. Major Steps in Controlling Process
V.    Total Quality Management (TQM)


          I. Definition of Controlling

Controlling is the process of monitoring and adjusting
organizational activities to ensure they are being
accomplished as planned.
           II. The importance of Controlling

Controlling play important roles in assisting managers:

• Coping with uncertainty (react quickly to significant changes in
• Detecting irregularities (product defects, cost overrun, rising
  personnel turnover).
• Identifying opportunities (highlight situations are going better in
  the future).
• Handling complex situation
• Decentralizing authority (foster decision making at lower levels
  in the organization).
                  III. Levels of Control

•   Strategic Control: Involves monitoring critical environmental
    factors that could effects the strategic plans.

•   Tactical Control: Focuses on assessing the implementation
    of tactical plans at department levels, monitoring associated
    periodic results, and taking corrective action as necessary.

•   Operational control: Involves overseeing the implementation
    of operating plans, monitoring day-to-day results, and taking
    corrective action when required.
            Level of Controlling

     Strategic Plans                   Strategic Control

   Tactical Plans           Middle              Tactical Control

Operation              Fist-line Managers              Operational
 Plans                                                  Control
       IV. Major Steps in Controlling Process

Step 1: Determine areas to control: Manager must decide which
  major areas will be controlled. Ex: Budget, quality, employees,
Step 2: Establish standards: Standards spell out specific criteria for
  evaluating performance. Ex: Quality of products, man-hour,
  speeds, volume, costs, etc.
Step 3: Measure performance: Measure actual performance will
  depend on the standards that have been set. Ex: Use
  quantitative and qualitative performance measures in carrying
  out the control process.
Step 4: Compare performance against standards: Compare the
  information provided in reports that summarize planned versus
  actual results.
        Major Steps in Controlling Process

• Step 5: Recognize positive performance: Managers should
  recognize the positive performance, when performance meets
  or exceeds the standards set. Take corrective action as
  necessary: Managers must carefully assess the reasons why
  and take corrective action when standards are met.

• Step 6: Adjust standards and measures as necessary:
  Manager need to check standards periodically to ensure that
  the standards and the associated performance measures are
  still relevant for the future. Existing standards and measures
  can be inappropriate.
        Major Steps in Controlling Process

  Determine       Establish    Measure          Compare              Standards
area to control   Standards   Performance     Performance              met or
                                            against Standards        Exceeded

                                                    not met

                                               Take corrective        Recognize
                                            actions as necessary     performance

                                                     Adjust standards and measures
                                                              as necessary
       V. Total Quality Management (TQM)

• Emphasizes quality in all parts of the organization.
  Ex: Customer service, sales, operation/production, etc.)
• Emphasizes organizational goals/objectives relate to both
  quantity and quality.
• Quality is emphasized in the annual employees’ job
  performance evaluations of the company.
• Quality circle: Some companies establish quality circles or
  groups in each department, consisting of about 8 to 10
  employees. These groups meet about once a week to discuss
  way to control and improve quality. Training on issues relating
  to quality control is also provided to these groups by the
                  THE EFFECTIVE MANAGEE

    The four primary types of controls that monitor organizational activities and

    Control               Monitors

•   personnel             Human resources , Job content,
                          performance, safety, and personnel cost

•   Financial             Income, expenditures, flow, asset , acquisition of
                          funds, and investment of funds.

•   Informational         Collection processes; storage security
                          and dissemination of data

•   Operational           Production, marketing finance, and staff
                          processes; inventory control; effectiveness of
                          planning; abilities and methods used to meet customer

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