Summary of Module 6 Controlling and Entrepreneurship

Controlling refers to the process of monitoring, comparing, and correcting work performance to
ensure that organizational goals are achieved. It involves measuring actual performance, comparing it
against a standard, and taking managerial action to correct any deviations. Managers have three possible
courses of action: do nothing, correct actual performance through immediate or basic corrective actions,
or revise the standard if necessary.

Control is important for several reasons. Firstly, it helps managers determine if their goals and
plans are on track and guides future actions. Secondly, control systems provide information and feedback
on employee performance, empowering them to improve. Lastly, control enhances physical security and
minimizes workplace disruptions.

Organizational performance is the result of all work activities within an organization. It can be
measured through productivity, which compares output to input, and organizational effectiveness, which
assesses goal attainment.

There are three types of control: feedforward control, which occurs before work activities;
concurrent control, which takes place during work activities; and feedback control, which happens after
work activities. Feedback control is the most used type.

Various control tools can be employed, including financial control using liquidity ratios, leverage
ratios, activity ratios, and profitability ratios. The balanced scorecard is a performance measurement tool
that evaluates financial, customer, internal process, and people/innovation/growth assets perspectives.
Benchmarking involves searching for best practices among competitors or non-competitors to improve
performance.

Operations management is the process of transforming resources into finished goods or services.
It is crucial for managing productivity and plays a strategic role in an organization's competitive success.
Organizations can be classified as manufacturing or service-based, with service economies dominating
developed countries.

Value refers to the attributes and characteristics of goods and services for which customers are
willing to give up resources. The value chain encompasses all organizational work activities that add
value from raw materials to the finished product. Value-chain management involves managing the
sequence of activities and information along the value chain to meet customer needs and integrate all
participants effectively.

Entrepreneurship involves starting new businesses to pursue opportunities. Entrepreneurs drive

innovation, contribute to the number of new startups, and create jobs. The entrepreneurial process
consists of exploring the context, identifying opportunities, starting the venture, and managing its
growth. Entrepreneurs assess potential, research feasibility, plan the venture, launch it, manage
processes, and people, and oversee growth and eventual exit strategies.

Example
 A manufacturing organization produces high-end smartphones and implements control
processes throughout its operations. Concurrent control is applied, with direct supervisors monitoring
assembly lines and providing feedback to employees. Feedback control is used through rigorous
inspections to ensure product quality. Financial control is employed, analyzing liquidity, leverage, and
profitability ratios. Value-chain management is practiced, collaborating with suppliers for timely delivery
of components and investing in research and development for innovative features. Entrepreneurship is
encouraged, fostering an innovative culture to drive growth. The organization's goals include increasing
market share and delivering superior products. Control processes and operational management drive
quality and efficiency. Financial control informs decision-making for pricing and investment. Value-chain
management optimizes the supply chain and entrepreneurship fuels innovation for competitive
advantage.