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Lect 10: Fundamentals of Controlling (Why is control needed? (Adapting to…
Lect 10: Fundamentals of Controlling
Definition
Controlling
is activities planned to happen and monitoring performance, comparing it with goals and taking corrective action as needed
Organisational Control
is the systematic process of regulating organisational activities to make them consistent with expectations in plans, targets and standards of performance
Why is control needed?
Adapting to change and uncertainty
organisational goals are
set on the basis of present knowledge
monitor specific activities
react quickly to significant changes in the environment
Detecting irregularities and errors
undesirable irregularities
such as product defects, cost overrun, staff turnover and customer complaints
Reducing costs, increasing productivity or adding value
reduce labour costs
eliminate waste
increase output
increase product delivery cycles
Identifying Opportunities
highlighting situations
such as competitive prices on materials, changing population trends and new overseas market
Dealing with complexities
grow larger or engage in mor ecomplex operations and projects
control enhance co-ordination
Decentralising decision-making and facilitating teamwork
decentralise decision-making at lower levels
Levels of Control
Strategic control
involves monitoring critical environmental factors that affect strategic plans. It is also domain of the top management and characterised by long-term time frames.
Tactical Control
is at departmental level objectives, it is to monitor periodic results and taking corrective action. Also to monitor specific internal and external forces, and competitors' prices. The source comes from management and financial reports, monthly performance reports, or customers' satisfaction survey.
Operational Control
is to monitor day to day result and taking corrective action. It is a short-term time frame done by front-line managers. It is the concerned with budgets, standards, schedules, rules, and other specific outputs.
Scopes (Areas of Control)
Physical Resources Control
Human Resources Control
Information Resources Control
Financial Resources Control
Types of Control Methods (Timing Control)
Feedforward Controls (Pre-Control)
before work is being performed
future oriented - prevent anticipated problems
establishing rules, procedures and policies
aimed at eliminating behaviour that cause undesirable work result
Concurrent Controls
take place as work is being performed
present oriented - minimise problems
monitor on-going - ensure performance are consistent with established standards
Feedback Controls
after work is completed
past oriented - intended to correct problems
Styles of Implementing Controls (Managerial Approaches)
Bureaucratic Control
Rules and Procedures
Hierarchy of Authority
: central and personal authority for control
Management Control Systems
: normally quantitative in nature and someimtes measure performance on a daily or even hourly basis
Technology
: used to define the speed and standards of performances, to control the flow and pace of work, and to monitor employee performance
Decentralised Control
Corporate culture
: powerful control device if it is strong and established values
Peer Group Control
: less bureaucratic control is need
Self-control and self-discipline
: empowering employees
Process
Establish Performance Standards
Measure Performance
Compare Performance Against Standards
Take Corrective Action