MODULE 6: FUNDAMENTALS OF CONTROL FEEDBACK CONTROL

CONTROLLING - involve reviewing information to determine

The process of measuring performance and
taking action to ensure desired results
• Has a positive and necessary role in the
management process
• Ensures that the right things happen, in
the right way, at the right time
• Benefit: Organizational learning (Example:
After-action review)
TYPES OF MANAGERIAL CONTROLS
whether performance meets established
standards. For example, suppose that an
organization establishes a goal of
increasing its profit by 12 percent next
year. To ensure that this goal is reached,
the organization must monitor its profit on
a monthly basis. After three months, if
profit has increased by 3 percent,
management might assume that plans are
going according to schedule.

• Feedforward Control
• Concurrent Control
• Feedback Control
FEEDFORWARD CONTROL
- sometimes called preliminary or
preventive controls, attempt to identify and
prevent deviations in the standards before
they occur. Feedforward controls focus on
human, material, and financial resources
within the organization. These controls are
evident in the selection and hiring of new
employees. For example, organizations THE CONTROL PROCESS
attempt to improve the likelihood that
• ESTABLISHING STANDARDS
employees will perform up to standards by
identifying the necessary job skills and by - Within an organization’s overall strategic
using tests and other screening devices to plan, managers define goals for
hire people with those skills. organizational departments in specific,
operational terms that include standards of
CONCURRENT CONTROL performance to compare with
organizational activities
- monitor ongoing employee activity to
• MEASURING ACTIAL PERFORMANCE
ensure consistency with quality standards.
- Most organizations prepare formal reports
These controls rely on performance
of performance measurements that
standards, rules, and regulations for
managers review regularly. These
guiding employee tasks and behaviors.
measurements should be related to the
Their purpose is to ensure that work
standards set in the first step of the control
activities produce the desired results. As
process. For example, if sales growth is a
an example, many manufacturing
target, the organization should have a
operations include devices that measure
means of gathering and reporting sales
whether the items being produced meet
data.
quality standards. Employees monitor the
• COMPARISON OF ACTUAL
measurements; if they see that standards
PERFORMANCE AND STANDARDS
are not being met in some area, they
- This step compares actual activities to
make a correction themselves or let a
performance standards. When managers
manager know that a problem is occurring.
read computer reports or walk through
their plants, they identify whether actual
performance meets, exceeds, or falls short
of standards. Typically, performance
reports simplify such comparison by
placing the performance standards for the
reporting period alongside the actual
 performance for the same period and by
computing the variance—that is, the
difference between each actual amount
and the associated standard.
• TAKING CORRECTIVE ACTIONS
- When performance deviates from
standards, managers must determine
what changes, if any, are necessary and
how to apply them. In the productivity and
quality‐centered environment, workers and
managers are often empowered to
evaluate their own work. After the
evaluator determines the cause or causes
of deviation, he or she can take the fourth
step—corrective action. The most effective
course may be prescribed by policies or
may be best left up to employees'
judgment and initiative.
CONTROL TOOLS AND TECHNIQUES
Project Management
- Project management is the application of
processes, methods, skills, knowledge
and experience to achieve specific project
objectives according to the project
acceptance criteria within agreed
parameters. Project management has final
deliverables that are constrained to a finite
timescale and budget.
• Gantt Chart
- A Gantt chart is a project management
tool that shows project tasks on a timeline.
The Gantt diagram was created by Henry
Gantt in the early 20th century to improve
project planning, scheduling and tracking
by illustrating completed work compared
to planned work. Today, project managers
and team members use Gantt charts to
plan projects, allocate resources and track
progress with just one project
management tool.
• CPM/PERM
- Project Evaluation and Review Technique
(PERT) and Critical Path Method (CPM)
are both useful tools when planning and
controlling a project. PERT and CPM are
complementary, and both are important
analytical techniques in project
management when managing tasks.
- Project managers use PERT as a tool to
help them determine how much time it’ll
take to complete a project. This is an
essential step toward developing an
accurate schedule.
- CPM is used to determine the earliest
possible starting time for each task in the
project. It’ll also help a project manager
determine the critical tasks and non-critical
tasks. This helps when executing the
project. If you’re behind schedule, you
know which tasks can be skipped without
impacting the integrity of the work.
• Inventory Control
- Ensures that inventory is only big enough
to meet immediate needs
Economic order quantity
- Places new orders when inventory levels
fall to predetermined points
Just-in-time scheduling
- Routes materials to workstations just in
time for use
• Breakeven Analysis
- is a financial calculation that weighs the
costs of a new business, service or
product against the unit sell price to
determine the point at which you will break
even. In other words, it reveals the point at
which you will have sold enough units to
cover all of your costs.
• Financial Ratios
- is a representation of numbers that show
the state of a company's finances. Ratios
are comparison points between different
figures in a business' financial statements.
If one number goes up and another goes
down, this means that something has
changed. Changes in financial ratios can
signify that it's time to reevaluate a
business or investment strategy.
MODULE 7: FUNCTIONAL AREAS OF
MANAGEMENT
FUNCTIONAL AREAS
- Just as different functions in the human
body are performed and regulated by
different organs, different functions within
a business are performed and controlled
by different parts of the business.
• STRATEGY
- This important area is, in a sense, the
"brain" of your business operation. All
potential business operators should create
vision and mission statements so they
understand what they want to do, why
they want to do it and how they will do it.
- When forming a strategy, determine
exactly in what market you will be
operating, and then perform a SWOT
(Strengths, Weaknesses, Opportunities
and Threats) analysis on your main
competitors and yourself.
• MARKETING
- Marketing consists of all that a company
does to identify customers’ needs and
design products and services that meet
those needs. The marketing function also
includes promoting goods and services,
determining how the goods and services
will be delivered and developing a pricing
strategy to capture market share while
remaining competitive. In today’s
technology-driven business environment,
marketing is also responsible for building
and overseeing a company’s Internet
presence (e.g., the company website,
blogs, social media campaigns, etc.).
Today, social media marketing is one of
the fastest growing sectors within the
marketing function.
• FINANCE
- The Finance function involves planning
for, obtaining, and managing a company’s
funds. Finance managers plan for both
short-term and long-term financial capital
needs and analyze the impact that
borrowing will have on the financial well-
being of the business. A company’s
finance department answers questions
about how funds should be raised (loans
vs. stocks), the long-term cost of
borrowing funds, and the implications of
financing decisions for the long-term
health of the business.
- Accounting is a crucial part of the Finance
functional area. Accountants provide
managers with information needed to
make decisions about the allocation of
company resources. This area is
ultimately responsible for accurately
representing the financial transactions of a
business to internal and external parties,
government agencies, and
owners/investors
• HUMAN RESOURCES
- Human Resource Management is more
concerned with the different aspects of
human relations and behavior. It performs
several roles like policy determination,
planning, organizing, direction, decision
making, motivation and control which are
more concerned with the human assets
and human behavior.
- It also conduct different tasks like
recruitment, selection, wages and salary
determination, training, promotion
demotion, health, welfare and grievance
redressal etc.
• TECHNOLOGY
- Technology management can be
described as a discipline – closely related
to or synonymous with IT management –
in which businesses and/or companies
utilize the different technologies available
to foster strategic growth.
- To do this, businesses must understand
the role of technology in each of their
departments and as an overall entity.
• OPERATIONS
- Operations management (OM) is the
administration of business practices to
create the highest level of efficiency
possible within an organization. It is
concerned with converting materials and
labor into goods and services as efficiently
as possible to maximize the profit of an
organization. To do this, businesses must
understand the role of technology in each
of their departments and as an overall
entity.
- Operations management teams attempt to
balance costs with revenue to achieve the
highest net operating profit possible.