CONTROLLING

GROUP 7
 ➢Enerlan, Mary Grace
➢Lorenzana, Vrylle
➢Palanca, Gene
REPORTERS:
➢Albesa, Jan Matthew
➢Villain, Andrew Rex
TOPICS: • Controlling
• Importance of Controlling
• Steps in the Controlling Process
• Types of Control
• Components of Organizational Control
Systems
• Strategic Control Systems
• Identifying control Problems
 • CONTROLLING
• IMPORTANCE OF CONTROLLING
GRACE ENERLAN • STEPS IN THE CONTROLING PROCESS
DEFINITION OF TERMS:
Control- a means of measurement and initiating adjustments in the course of activity to address
unwanted changes to cost, schedule, quality, or risk elements that have influenced the activity.

Objectives-. It refers to a thing aimed at or sought

Feedforward-It is an element or pathway within a control system that passes a controlling signal
from a source in its external environment to a load elsewhere in its external environment.

Concurrent- It takes place while an activity is in progress

Feedback Control-It refers to a process that managers can use to evaluate how effectively their
teams meet the stated goals at the end of a production process
Appraisals-. It is an expert estimate of the value of something.

Statistical-Relating to the use of statistics.

Inadequate –. Define as a lack of the quality or quantity required.

Revenues – refers to an income

Profit -It is a financial gain, especially the difference between the amount earned
and the amount spent in buying, operating, or producing something..
CONTROLLING

• Is one of the important function of management.

• According to Theo Haimann "Controlling is the process of checking whether or not proper progress
is being made towards the objectives and goals and acting if necessary, to correct any deviation.”

• Controlling ensures that there is effective and efficient utilization of organizational resources so as
to achieve the organizational goals.

2 purposes:
:If facilitates coordination
:It helps in planning
 When controlling is properly implemented, it
will help the organization achieve its goal
most efficiently and effectively possible.

IMPORTANCE OF A Good control system provides timely

information to the manager which is very
CONTROLLING much useful for taking various operations.

complements the other functions of

management.
STEPS IN THE
CONTROL
PROCESS
VRYLLE LORENZANA
 1 2 3 4
Establishing Measuring Comparing Taking necessary
performance actual actual action based on
objectives and performance performance to the results of the
standards objectives and comparisons.
standards

4 STEPS IN THE CONTROL PROCESS

ESTABLISHING
PERFORMANCE
OBJECTIVES AND
STANDARDS
IN CONTROLLING, WHAT HAS TO BE
ACHIEVED MUST FIRST BE DETERMINED.
EXAMPLES OF SUCH OBJECTIVES AND STANDARDS ARE AS
FOLLOWS:

Sales targets - which Production targets- Worker attendance –

are expressed in which are expressed which is expressed in
quantity or monetary in quantity or quality. terms of rate of
terms. absences.

Safety Record – Supplies used- which

which is expressed in are expressed in
the number of quantity or monetary
accidents for given terms for given
periods. periods.
MEASURING ACTUAL
PERFORMANCE

• There is a need to measure

actual performance so that when
shortcomings occur, adjustments
could be made. The adjustments
will depend on the actual
findings
COMPARING ACTUAL
PERFORMANCE TO
OBJECTIVES AND STANDARDS

• Once the actual

performance has been
determined, this will be
compared with what the
organization seeks to
achieve.
TAKING NECESSARY ACTION

• The purpose of comparing

actual performance with the
desired result is to provide
management with the
opportunity to take
corrective action when
necessary.
TYPES OF CONTROL
GENE PALANCA
FEEDFORWARD CONCURRENT FEEDBACK
CONTROL CONTROL CONTROL
FEEDFORWARD
CONTROL

• When management
anticipates problems and
prevents their
occurrence.
 CONCURRENT CONTROL

• When operations are already

ongoing and activities to detect
variances are made, concurrent
control is said to be undertaken. It is
always possible that deviations from
standards will happen in the
production process.
FEEDBACK CONTROL

• When information is
gathered about completed
activity, and so that
evaluation and steps for
improved are derived
COMPONENTS OF
ORGANIZATIONAL
CONTROL SYSTEM
 THE LONG-RANGE THE OPERATING
STRATEGIC PLAN
FINANCIAL PLAN BUDGET

PERFORMANCE STATISTICAL POLICIES &

APPRAISALS REPORTS PROCEDURES
 • It provides the basic control mechanism for
the organization. When there are indicators
that activities do not facilitate the
accomplishment of strategic goals, these
STRATEGIC activities are either set aside, modified, or
expanded.
PLANS
THE LONG-
• The planning horizon differs from company to
RANGE company. Most firms will be satisfied with one year.
FINANCIAL Engineering firms, however, will require longer-term
financial plans.
PLAN
 CONTINUATION TO GENE’S REPORT
JAN MATTHEW
ALBESA TOPIC:
COMPONENTS OF
ORGANIZATIONAL CONTROL
SYSTEMS
 • An operating budget shows the company's
projected revenue and associated expenses
for an upcoming period – usually the next
year – and is often presented in an income
1. OPERATING statement format.
BUDGET
WHAT’S THE • Operating budgets are used as plans for the sales
PURPOSE (income) and production (expense) departments of

OF THE businesses, and are generally short term - 3-12

months long. Managers use them to track income and
OPERATING expenses and to evaluate how their business is

BUDGET? doing.
WHY IS AN OPERATING BUDGET IMPORTANT?

• it enables you to assess whether

your personal finances have been
properly provided for.
2. PERFORMANCE APPRAISALS

the regular review of a set of activities and

an employee's job outputs meets an
performance and organization's goals
overall contribution in an effective and
to a company efficient manner.
 • Helps to Boost Employee Engagement
and Productivity.
IMPORTANCE
OF
PERFORMANCE
APPRAISAL
 WHY DO
WE HAVE • We need performance appraisals to
show employees they have support,
PERFOR-
to offer training and development
MANCE
and to deliver reward and recogni-
APPRAISALS tion.
AT WORK?
 • way of presenting large amounts
of data in a convenient form.

3. STATISTICAL
REPORTS
THE FOLLOWING ARE EXAMPLES OF THE TYPES OF INFORMATION
THAT MAY BE FOUND IN A STATISTICAL REPORT:

1. Labor 2. Quality 3. Accounts 4. Accounts

efficiency control rejects receivable payable
rates

5. Sales 6. Accident 7. Power

reports reports consumption
report
4. STRATEGIC CONTROL SYSTEMS

FINANCIAL ANALYSIS FINANCIAL RATIO

ANALYSIS
 FINANCIAL ANALYSIS

• process of evaluating businesses, projects, budgets, and

other finance-related transactions to determine their
performance and suitability.
FINANCIAL RATIO ANALYSIS

technique of comparing the relationship (or ratio) between two or more

items of financial data from a company's financial statements.

a more elaborate approach used in controlling activities. Under this method,

one account appearing in the financial statement is paired with another to
constitute a ratio.
IDENTIFYING CONTROL
PROBLEMS
ANDREW REX VILLAN
• Recognizing the need for control is one thing, implementing it is another.
When operations become complex, the engineer manager must consider
useful steps in controlling.
• Employees at the frontline often complain that management imposes certain
requirements that are not realistic.
KREUTNER’S THREE APPROACHES:

EXECUTIVE REALITY CHECK COMPREHENSIVE INTERNAL A GENERAL CHECKLIST OF

AUDIT SYMPTOMS OF INADEQUATE
CONTROL
 COMPREHENSIVE INTERNAL AUDIT

• An internal audit is undertaken to determine the efficiency and effectiveness

of the activities of an organization. Among the many aspects of operations
within the organization, a small activity that is not done right may continue to
be unnoticed until it snowballs into a full-blown problem.
 • If a comprehensive internal audit cannot
be availed of for some reason, the use
of a checklist for symptoms of
SYMPTOMS inadequate control may be used.
OF
INADEQUATE
CONTROL
KREITNER HAS LISTED SOME OF THE COMMON SYMPTOMS:

3. Employee 4. Cash shortages

1. An unexplained 2. Degradation of dissatisfaction caused by bloated
decline in revenues service (customer (complaints, inventories or
and profits. complaints) grievances, turnover). delinquent accounts
receivable.

6. Disorganized 8. Evidence of waste

5. Idle facilities or operations (workflow 7. Excessive costs. and inefficiency
personnel . bottlenecks, excessive (scrap, rework)
paperwork).
THANK YOU!!