WEEKLY LEARNING ACTIVITY SHEET

Organization and Management Grade 11, Quarter 2, Week 6

DIFFERENT CONTROLLING METHODS AND TECHNIQUES

Name: ___________________________________________________ Section: ____________________

Learning Objective:
 Apply the concept and nature of different control methods and techniques in
accounting and marketing

 Time Allotment: 4 hours

Key Concepts

DEFINITION AND NATURE OF MANAGEMENT CONTROL

 Management control makes sure that the firm’s operating cash flow is sufficient,
efficient, and, if possible, profitable when invested; that the decision to seek or
borrow funds should be appropriate; that there is a continuous monitoring of the
organizations’ activities followed by corrective action; that tasks are completed with
less errors by comparing them with previously set standards.
 Controlling is a management function that ensures the work performances of the
organization’s members are in-line with the organization’s values and standards.
 Control techniques are basically the same for controlling financial resources, office
management, quality of service, and quality of goods, among others.
 The control process involves establishing standards, measuring and reporting actual
performance and comparing it with standards, and taking action.

LINK BETWEEN PLANNING AND CONTROLLING

 There is a link between planning and controlling.

 Planning determines the organization’s goods or performance objectives.
 Controlling makes sure that all organization members are working towards a
common direction or towards the previously set goals and plans of the
organization.
 The Balance Sheet is a financial statement showing the organization’s financial
condition; it presents the financial balances of a particular period and follows an
accounting entry A = L + C or total asset is equivalent to the aggregate summation
of liabilities and capital or owner’s equity.
 The Income Statement is also known as the Profit and Loss Statement, and
Revenue and Expenses Statement.
 The Cash Flow Statement summarizes the inflows and outflows of cash during the
given period.
 Financial Statements, to be useful in doing financial forecast, must contain the
following minimum items: sales or gross revenues, net income, gross profit, income

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
 from continuing/discontinuous operations, usual income statement items, tax
provisions, material changes in financial positions. In preparing prospective
financial statements, state that prospective results may not materialize because
assumptions used are based on information/circumstances existing at the time
the financial statements were prepared.
 The usual measures of organizational performance control are organizational
productivity, organizational effectiveness, and rankings in industry.
 Organizational productivity is the amount of goods or services produced (output)
divided by the input or materials needed to produce the said output.
 Organizational effectiveness is a measure of the organizational goals’ suitability to
organizational needs and how well these goals are being attained.
 Ranking in industry is a commonly used way to measure organizational
performance; being ranked high, middle or low indicates the company’s
performance in comparison with others.

CONTROL METHODS AND SYSTEMS

 Control methods are techniques used for measuring an organization’s financial

stability, efficiency, effectiveness, production output, and organization members’
attitudes and morale.
 Control techniques are either quantitative or non-quantitative.
 Quantitative control methods include chart, budget, and audits.
 Non-quantitative control methods include inspections, direct supervision, on the
spot checking, performance evaluation, and counselling.
 Other control methods: feed forward control, concurrent control, feedback control,
employee discipline, and project management control.
 Management control accounting and finance makes use of a balance sheet, income
statements, and cash flow statement to analyze and examine financial statements
in order to determine the company’s financial soundness and viability; it also uses
financial ratios to determine the company’s stability, whether it is strong or weak
and about to declare bankruptcy.
 Management control marketing makes use of projected sales or forecasts;
statistical models and econometric modelling to achieve growth targets; surveys to
assess product demands; and historical demand data and actual consumption of
their products.
 Accounting/financial control ratio includes liquidity ratio, leverage ratio, activity
ratio, and profitability ratio.

Liquidity ratio – tests the organization’s ability to meet short term

obligations; it may also refer to acid tests done when inventories turn over slowly
or are difficult to sell.

current ratio = current assets ÷ current liabilities

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
 Leverage ratio – determines if the organization is technically insolvent,
meaning that the organization’s financing is mainly coming from borrowed money
or from the owners’ investments.

debt-to-assets ratio = total debt ÷ total assets

Activity ratio – determines if the organization is carrying more

inventory than what it needs; the higher the ratio, the more efficiently inventory
assets are being used.

inventory turnover = cost of goods sold ÷ average inventory

Profitability ratio – determines the profits that are being generated;

net profit after taxes ÷ total sales

or it measures the efficiency of assets to generate profits.

return on investment = net profit after taxes ÷ total assets

In addition to the above ratios, asset management is also practiced to

achieve organizational goals. Asset management is the ability to use resources
efficiently and operate at minimum cost.

inventory turnover = sales ÷ average inventory

 Asset management is the ability to use resources efficiently and operate at

minimum cost.
 Strategies control is a systematic monitoring of control points in strategic plans that
leads to the changing of the organization’s strategies based on assessments.
 Benchmarking is an approach and process of measuring a company’s services and
practices against recognized leaders in industry to identify areas for improvement.
 Types of Benchmarking a) strategic benchmarking compares various strategies and
identifies the key strategic elements of success; b) operational benchmarking
compares relative costs or possibilities for product differentiation; and c)

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
 management benchmarking focuses on support functions such as market
planning and information systems, logistics, and human resource management,
among others.

Other quantitative control methods:

 Budgets – an expression in financial terms of a plan for meeting the organization’s

goals for a specific period. It is an instrument of planning, management, and
control.
 Audit – an independent review and appraisal of accounting, financial, and other
non-tactical operations. The audit measures and evaluates the effectiveness of
management controls and provides an independent audit of programs, activities,
systems and procedures.

Activities

Activity No. 1: Multiple Choice.

What you need: Paper and Pen

What to do: Direction. Choose the letter which corresponds to the correct answer
and put it on the space provided before each number.

1. The first step in the control process.

a. taking action b. establishing standards

c. measuring and reporting actual performance

2. refers to all the properties owned by an organization.

a. liabilities b. Equities c. assets

3. The amount of goods and services produced by organizations.

a. output b. input c. throughput

4. A measure of the suitability of organizational goals to organizational

needs and how well these goals are being attained.

a. Industry ranking b. Organizational effectiveness

c. Organizational productivity

5. The organization’s ability to meet short term obligations

a. liquidity b. solidity c. control

6. It is a method which prevents problems because a managerial action is

taken before the occurrence of actual problems.

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
 a. employee discipline b. feed forward control

c. feedback control

7. The “lifeblood of the business”

a. sales b. strategies c. projections

8. The ability to use resources efficiently and operate at minimum cost

a. activity ratio b. leverage c. asset management

9. An approach of measuring a company’s own services and practices

against recognized leaders in industry in order to identify areas for

improvement.

a. strategic control b. benchmarking

c. market planning

10. Profit and Loss Statement is also known as .

a. Progress Statement b. Income Statement

c. Operations Statement

Activity No. 2: Mind Mapping

What you need: Paper and Pen
What to do: Direction. Write any word, phrases or sentences that you think
describe the link between planning and controlling.

LINK BETWEEN PLANNING AND

CONTROLLING

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
Activity no. 3: Short answer question.
What you need: Pen and Paper
What to do: Direction. Answer the following questions with 2-3 sentences. Write
your answer on the space provided.

1. Define the term “budget”.

2. Differentiate fixed budget from flexible budget.

3. How is budgeting related to the planning and control functions of

management?

4. Why should the budget be aligned with organizational goals?

Rubrics for Scoring:

Essay Rubric

Features 4 3 2 1

Quality Very Somewhat Gives new Gives no new

of informative informative information information
Writing and well- and but poorly and poorly
organized organized organized organized

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
 Ideas Presents Presents Ideas are Ideas are
original and ideas in a too vague or
organized consistent general unclear
ideas manner
Understandin Writing Writing Writing Writing shows
g shows shows a shows little
strong clear adequate understandin
understandi understandi understandin g
ng ng g
Grammar Virtually Few spelling A So many
no and number spelling and
spelling grammatical of grammatical
and errors spelling errors
grammati and
cal errors grammat
ical
errors

Reflection

In this activity, I learned that…

References

Cabrera, Helena Ma. F, Anthony DC Altarejos, and Riaz Benjamin. “TM

Organization _ Management.” Edited by Clarence Darro B Del Castillo, 2016.
https://www.scribd.com/document/424851678/TM-Organization-
Management.

Cabrera, Helena Ma. F., Anthony DC Altarejos, and Riaz Benjamin. “Organization
and Management.” Edited by Clarence Darro B. Del Castillo, 2016.
https://www.scribd.com/document/436115934/Organization-and-
Management.

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph
Answer Key:
Activity No. 1

1. B
2. C
3. A
4. B
5. A
6. B
7. A
8. C
9. B
10. B

Activity No. 2

“Answers are expected to vary”

Activity No. 3

“Answers are expected to vary”

Author: Jessebel D. Anthony

School/Station: Tagbina National High School
Division: Surigao del Sur
Email Address: jessebel.anthony@deped.gov.ph