controlling

organizational control

process of monitoring, comparing, and correcting work performance

organizational control

a systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance

control system

a set of mechanisms that are designed to increase the probability of meeting organizational standards and goals

control system

consist of control process and control structure that helps achieve the organization’s goals and targets

market control

relies on market mechanisms to regulate prices for certain clearly specified goods and services need by the organization

bureaucratic control

basis of control are administrative hierarchical mechanisms such as rules, regulations, procedures, policies, standardization of activities, budgets

clan control

regulates employee behaviors through shared values, norms, traditions, belief, etc.

management control

• focus of activity: over-all performance

• focus of control: operating managers

• control reports:

  • Financial and Non-financial

  • Future and historical

operational control

• focus of activity: single task or operation

• focus of control:

  • Employees assigned to the job

  • Supervisors

• control reports: data specific to the operation

feedforward

• Emphasis is on preventing problems, thus it anticipates problems that may arise

  • Also called preliminary control, precontrol, preventive control or steering control

input

focus of feedforward control

concurrent

• Involves the regulation of on-going activities, with checkpoints in place to determine whether to continue the process, take corrective action or stop work altogether

• Also called screening or yes-no control

processes

focus of concurrent control

feedback

serves as final means to check for deviations that were not detected pearlier

output

concern of feedback control

multiple control system

control system that uses two or more of the feedforward, current and feedback control processes

cybernetic control system

a self-regulated control system that once put into operation, can automatically monitor situation and take corrective action when needed

non-cybernetic control system

control system that relies on human discretion as basic part of the control process

planning

provides the basis for the control process by providing the standards of performance against which managers compare organizational activities

organizational productivity

the overall output of goods and services produced divided by the inputs needed to generate that output

organizational effectiveness

how well an organization can achieve its targets and goals

industry and company rankings

can be done by comparing the organizations performance with other companies in the industry

production quality

measured by sales volume, labor relations, and capital expenditures

production quantity

measured by sales expense, labor turnover, and inventories

production cost

measured by advertising expenditures, labor absenteeism, and flow of capital

individual job performance

measured by individual sales performance and liquidity

1. financial statements

2. financial ratios

tools for financial control

1. Economic Order Quantity (EOQ)

2. Just in Time (JIT)

tools for inventory control

financial statements

summary of the major aspects of an organization’s financial status

balance sheet

a financial statement that depicts an organization’s assets and claims against those assets at a given point in time

income statement

a financial statement that summarizes the financial results of company operations over a specified time period, such as a quarter or a year; Shows revenues, costs and profits

financial ratios

an index that measures one financial variable relative to another; usually expressed as a percentage or a rate

liquidity

the ability to convert an asset to cash quickly; also known as "marketability"

leverage / debt management ratios

assess the extent an organization uses debt to finance investments, and the degree it can meet its long-term obligations

activity / asset management ratios

how effectively an organization manages its assets

profitability

helps measure the management’s ability to control expenses and earn profits using the organization’s resources

inventory

a stock of materials (raw materials, work-in-progress, finished goods) to facilitate production or satisfy customer demand

inventory control

helps in dealing with uncertainties in supply and demand, and aims to minimize the costs of inventory

item cost

the price of an inventory

ordering cost

the expenses involved in placing an order

carrying cost

expenses associated with keeping an item on hand

stock out cost

the economic consequences in running out of stocks

Economic Order Quantity

an inventory control method developed to minimize ordering plus holding costs while avoiding stock out costs. It helps managers to decide how much to order

Just in Time approach

emphasizes having materials arrive just as they are needed in the production process

Total Quality Management

an integral part of an organization’s strategy that aims to continually improve product and service quality to achieve high levels of customer satisfaction and building strong customer loyalty

quality

totality of features and characteristics of a product or service that bear on its ability to satisfy needs

Cost of quality analysis

evaluate the potential cost savings that might be accomplished by improving quality such as that the work is done correctly for the first time

Quality improvement teams

aka quality circles, small groups of employees who work on solving specific problems related to quality and productivity

benchmarking

identifying the best practices by comparing productivity in the company, and within & outside the industry

statistical process control

concurrent control that uses actual random samples taken periodically from production processes to determine whether acceptable quality levels are being met

six sigma

a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts

ISO 9000

a set of international standards for quality management systems established by the International Organization for Standardization

reduced cycle time

the steps taken to complete a company process leading to efficiency

kaizen

continuous improvement in all areas of operation

Open-Book Management

allows employees to see for themselves the financial condition of the company

balanced scorecard

a comprehensive management control system that balances traditional financial measures with operational measures relating to a company’s critical success factors

Financial performance

improving short-term and long-term financial performance

Customer service indicators

how well the organization views and treats customer for retention and satisfaction

Corporate Governance

the system used by the Board of Directors (BOD) to govern a corporation so that the interests of corporate owners are protected

overcontrol

inhibits job performance

undercontrol

results to loss of control over subordinates