The System and Process of Controlling (29th Nov)

1. PRINCIPLES OF MANAGEMENT Planning Organizing Leading Controlling

2. YOUR PERFORMANCE

3. GROUP WISE ASSIGNMENTS Compensatory assignments Classes left? Sunday class? Next few classes Project (4 groups of 7 each) 15 marks Portfolio Matrix with TOWS (Chap 3) Planning stages of a new company (Chap 2,3) Departmentation (chap 6) and culture(chap 8) Controls (chap 12) Mark dates, assignment to students

4. The System and Process of ControllingmQhttp://www.slideshare.net/Subjectmaterial Chapter 12

5. TABLE OF CONTENTS THE BASIC CONTROL PROCESS CRITICAL CONTROL POINTS, STANDARDS, AND BENCHMARKING CONTROL AS A FEEDBACK SYSTEM REAL-TIME INFORMATION AND CONTROL FEEDFORWARD, OR PREVENTIVE, CONTROL CONTROL OF OVERALL PERFORMANCE PROFIT AND LOSS CONTROL CONTROL THROUGH RETURN ON INVESTMENT MANAGEMENT AUDITS AND ACCOUNTING FIRMS BUREAUCRATIC AND CLAN CONTROL REQUIREMENTS FOR EFFECTIVE CONTROL

6. QUIZ Disclosed quiz for next session Take the words home as many as possible …

7. THE BASIC CONTROL PROCESS What is controlling? The measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished The Basic Control Process Establishment of standards Measurement of performance Correction of Deviation

8. CRITICAL CONTROL POINTS, STANDARDS, AND BENCHMARKING The principle of critical point control: Effective control requires attention to factors critical to evaluating performance against plans Types: Physical Standards Cost Standards Capital Standards Revenue Standards Program Standards Intangible Standards Goals as standards Strategic plans as control points for strategic control Systematic monitoring at strategic control points and modifying the organization’s strategy based on this evaluation

9. CRITICAL CONTROL POINTS, STANDARDS, AND BENCHMARKING Benchmarking: An approach for setting goals and productivity measures based on best industry practices Types Strategic Benchmarking It compares the various strategies and identifies the key strategic elements of succes Operational Benchmarking It compares relative costs or possibilities for product differentiation Management Benchmarking It focuses on support functions such as market planning and information systems, logistics, human resource management and so on

10. CONTROL AS A FEEDBACK SYSTEM Management control is a feedback system, similar to common household thermostat A thermostat is used to control/ regulate the heat/ temperature of the system Manager measure actual performance, compare this against standards, and identify and analyze deviations. They need to develop a program for corrective action and implement this program to arrive at the desired performance levels

11. CONTROL AS A FEEDBACK SYSTEM

12. REAL TIME INFORMATION AND CONTROL Real-Time information pertains to knowing what is happening, while it is happening Examples flight info, electronic cash registers, time lines etc Manager collect data and find the deviations through Real Time information systems, Further analysis of data needs specialization Programmed decisions may be taken although where structured tasks are being monitored

13. FEED FORWARD, OR PREVENTIVE CONTROL