N G

L I
O L
T R
ON
C
DIMENSIONS OF CONTRO
 L
O
T R
N THE WORD CONTROL
C O SUGGESTS THE
O P E RAT I O N O F C H E C K I N G ,
T E S T I N G , R E G U L AT I N G ,
VERIFYING, MONITORING
OR ADJUSTING.
 As a management function,
controlling is the process of taking
the necessary measure to ensure
the organizations mission and
objectives are accomplished as
effectively and efficiently as
possible.

Successful managers detect

deviations from desirable
standards and make appropriate
 N G
H I
I S T
L M E
R O O -
T S S I N
O N G I T L A
C K I N . P
A E N I S E
M PP SE U R
A
H RPO KE S
E S .
P U M A C V E
A N T I
T O AT R M J E C
TH RFO OB
P E T S
EE
Adapt to change an
uncertainty irr Dis
e c
an gu ove
d la r
e err itie r
a s or
c re s s
in d d .
t
os or a
e c y .
c
u tivi t ie s
e d i t
R duc u n
t
pro ue. po r
a l o p
v De t
cen ec
ma tra De t
k
fac ing lize ity
il a n d e x
tea itat d eci
si o p l
mw ing n m
ork co
.
ith
l w
a
Importanc
e
of control
Also called
preventive control.
It refers to the
active anticipation of problems
and their timely prevention,
rather than after-the-fact
reaction. Planning and
preventive control are related
Feed
but different processes.
forward
This kind of control is Co
called real- time control nc
because it deals with the
u
Co nt rre
present rather than future or
past happening of the
problem. It involves nt
monitoring and adjusting ro
ongoing activities and l
processes to ensure compliance with
established standards.
A manager exercises concurrent control
by overseeing the work and apply
immediate solution whenever problems
are encountered.
 It involves the
checking of a
completed activity or
work and learning from
mistakes. This type of
control applies the
following steps:
Feedback Control
 1. Gathering information
about the completed
activity.
2. Evaluating the
information.
3. Taking corrective measures to
improve similar activities in the future
in line with the planned objectives and
established standards.
Feedback control is corrective in
nature. It tries to correct the mistakes
done in the past.
 DAMAGED
TYPES OF FEEDBACK CONTROL
COTROL
-it refers to the
action taken
REWORK to minimize
CONTROL negative
-it is the action impacts on
taken to fix an customer/
output. stakeholder
Rework is due to faulty
necessary outputs.
when

preventive
 Inputs Process Outputs

Feedforward Concurrent Feedback

Monitoring Monitoring Monitoring
Inputs outputs Learning
Anticipating Processes from past
and Adjusting on- Mistakes
preventing going
Problems activities

TYPES OF CONTR
Organizational
Control System
It is a method that
guides an
organization in
assessing
performance to


COMPONENTS OF
CONTROL SYSTEM
Objectives- is a target signifying what should be
accomplished and when. It is very important part of any
control system because they provide measurable
reference points for corrective action.

Standards- serves as guideposts on the way to reaching

those targets. It provides feed-forward control by warning
people when they are off the track.

Evaluation-Reward-System- when integrated

systematically, objectives, standard and equitable
evaluation- reward system constitute and invaluable
control mechanism of an organization.
 Set Measure Compare Action
Set Measure Compare Actiontoto
Objectives Actual Actual Findings
Objectives Actual Actual Findings
and Performance Performance
and Performance Performance
Standards totoStandards
Standards Standards
Determine
Determineifif
Control
Controlisis
necessary Reinforce
necessary Reinforceifif
Standards/Ob
Standards/Ob
jectives
jectivesare
are
met
met

Take
TakeCorrective
CorrectiveAction
Action
IfIfStandards/Objectives
Standards/Objectivesare are
not met, use concurrent
not met, use concurrent
control
controlororfuture
futurecorrection
correction
(rework
(reworkorordamaged
damaged

STEPS
control).
control).

Revise
Revisethe
the

IN
Standard
Standardifif
necessary
necessary

CONTROL
PROCESS
 Control
Frequency and
Control Methods
mechanisms are PERIODI
important to C
organizational
success. It can
be:
CONSTA OCCASION
NT AL
 STRATEGIC CONTROL

A strategic control includes controls for

cycle time, waste, flexibility, productivity
and financial results.
IDENTIFYING CONTROL
PROBLEMS

1. Executive reality check

2.Internal Auditing
3.General Checklist of symptoms of
inadequate control
 SIGNS OF MISGUIDED
CONTROL SYSTEM

2. Measurement ship- this involves political maneuvering motivated

by a desire to look good even if it means manipulating reports and
control data.

3. Budget Games- it takes in many forms, one of which is the

common practice whereby managers requires a larger budget than
necessary and still manage to spend all the funds.
 FINANCIAL CONTROL

The ultimate survival of

organizations in both public and
private sectors is dictated by how
proficiently funds are acquired and
managed. The availability of funds
is the handy measuring sticks for
assessing organizational
performance
A Budget is a formal financial projection.
Since all types of budgets are financial
projections or plans of the future events, they
provide managers with standards for control.
The difference between the actual figures and
the budgeted ones is called budget variance.

BUDGET VARIANCE
AS A CONTROL TOOL
Assume the following budget variance of X Company

X Company

Operating Budget for the Year 200X

Budget Variance

Budget Actual Favorable Unfavorable

Revenue P400, 000 P420, 000 P20, 000

Expenses:

Direct Labor P200, 000 P240, 000 P40, 000

Materials 80, 000 60, 000 20, 000

Overhead 40, 000 45, 000 5, 000

P320, 000 P345, 000 P40, 000 P45, 000

Profit before tax P80, 000 P75, 000 P5, 000

FLEXIBLE BUDGET AND
INFLATION ADJUSTMENTS

When a budget is fixed or static, it limits managers to feedback control. It allows managers to
assess financial performance only after actual costs are incurred.

1. Flexible budget a technique using standardized costs that allow managers to

exercise concurrent control over the expenditures of funds. Standard costs are
calculated from past performance on the basis of informed judgment. These
standard costs are tied to revenue.

2. Index Standard Costing during the inflationary period comparing actual

figures with budgeted ones is like comparing oranges and apples. Appropriate
inflation indexes dictate the magnitude of its monthly adjustments to cope up
with increases in prices.
 FINANCIAL RATIOS
Measures of an organizations
financial status that can be
compared with industry standards,
and they offer a convenient way of
gauging an organizations financial
health.
 Asset
Liquidity Manageme
nt

Debt
Manageme Profitability
nt

Market
Value

5 Main Types of
Financial Ratios
 SUMMARY OF RATIOS

Liquidity Ratios:
Current ratio =
Quick ratio =
Quick ratio =
Inventory turnover
Number of days sales in inventories
Receivable turnover
Profit Ratios:
Return-on-sales ratio
Return on equity =
Return on total assets ratio
Times interest earned ratio
Solvency or Stability Ratios:
Debt to total assets ratio
Shareholders equity to total assets ratio

Shareholders equity to total liabilities ratio

Price/Earnings ratio
Dividend yield ratio
Pay-out ratio
Market to book value ratio

Cash Managemen
Cash must be available when
needed.
Excess cash must be invested
to earn additional income.
Payments of indebtedness
must be delayed if possible
without cost involved.
Other sources of funding must
 The
Coordinate cash ff. s
help i x st
m a eps
flow among add n
ition agers can
organizational an o al p wrin
rgan rofit g
reso iz a s fo
units urce tion rm
s: s ca
ersify short-term investment sh
rtfolios
Take
oaden the borrowing baseadvantage of
foreign
exchange
hop around for banking services
differentials
Keep cash moving
human control is
made through
coaching,
management by HUMAN
walking around
counseling and
CONTROLS
disciplining.
COACHING
- is a process of giving motivational
feedback to maintain and improve
performance.
- is an important management skill
that is used to improved employee
performance.
-Feedback is the core of coaching. It
must be motivational. Manager who
gave positive feedback achieved
employees performance at a higher
level because they are motivated and
CORRECTIVE
COACHING
A B I L I T Y A N D M O T I VAT I O N
ACTION H AV E A D I R E C T E F F E C T O N
PERFORMANCE. WHEN
ABILITY
IS HOLDING BACK
PERFORMANCE,
TRAINING IS NEEDED.
W H E N M O T I VAT I O N I S
LACKING,
T RY T O TA L K T O E M P L O Y E E
AND
 Ma
n
W ag
alk em
listening in e
g nt
Ar B
ou
nd
teaching
facilitating
 COUNSELING
Problem employees may be classified
as:
COUNS
1. No ability to meet job
performance ELING
2. No motivation to meet
performance
3. Violators of standing plans
 MANAGEMENT
COUNSELING
- is the process of giving employees feedback so they realize that a
problem is affecting their job, performance and referring
employees problems.

EMPLOYEES ASSISTANCE PROGRAM (EAP)

consists of a staff of people who help employees get professional
assistance in solving their problems. To make the referral, a manager
could make suggested question such as Are you aware of our
employee assistance program? or Would you like me to set up an
appointment with the human resource department to help you get
professional assistance?
 CO NT R OL
L I N E AS A
DI S CI P
DEVICE m e p ro b le
s s a ry if t h g
is n e c e b re a k i n
Discipline b l e to c h a n g e by
rre ct ive
y e e is u n a l in e is c o
em p lo n g .D is c ip d s
c o u n se l i t st a n d a r
u le s a f te r s to m e e
r em p l o y e e c tiv e o f
io n t o ge t m a i n o bj e
a c t la n s . T h e h a v i o r.
a n d i ng p l o y ee s b e
an d s t n g e e m p
i s to ch a
dis c i p l i ne

r y S te p s :
Disciplina a r n i n g
1. Or a l w
n w a r n i n g
2. Writte
u s p e n s i o n
3. S
GUIDELINES FOR EFFECTIVE DISCIPLINE

1. Clearly communicate the standards and standing plans to all

employees.
2. Be sure that the punishment fits the crime.
3. Follow the standing plans yourself.
4. Take consistent, impartial action when the rules are broken.
5. Discipline immediately, but stay calm and get all the
necessary facts before you discipline.
6. Discipline in private.
7. Document discipline.
8. When the discipline is over, resume normal relationship with the
employee.
 CRISIS MANAGEMENT
Is the systemic anticipation of and preparation for
internal and external problems that seriously threaten an
organizations reputation, profitability or survival. It
involves much more than an expedient public relation
ploy to make the organization look good.

Four Elements of Crisis Management

1. Conducting a crisis audit
2. Formulating contingency plan
3. Creating a crisis management team
4. Perfecting the program through practice
THANK
YOU