1

ESSENTIALS OF
CONTROL

GROUP 6:
1. V c Long
2. Nguyn V Tr My
3. Phm Tho Minh
4. Bi Bo Ngc
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2

Controlling,
types and
strategies of
control
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1. CONTROLLING

Definition: Functions:

Equivalent to
Measure the
PLANNING:
planning,
Goals and
organizing, leading.
Method.

Final stage of Effectiveness of

management control system
function
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One image slide

Example: The development

strategy of TOFU hn c
to ph store.

Image Caption
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Two images slide

Specific strategies of tofu in the future

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2. TYPES AND STRATEGIES OF CONTROL

Time Element in External versus

control Internal control
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The time element in controls

Preventive Control Concurrent Control Feedback Control

Before the During the performance. After the performance.
performance. Observe the performance. Evaluate the products of the
Set performance Spot and solve problems performance.
standards. immediately. Provide guideline for future
use.
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COMPARISION OF DIFFERENT ELEMENTS BETWEEN STORES.

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External Control Internal Control

Strengths Strengths
Motivating employee with Building strong commitment
physical rewards. to organizational goals.
Include three steps: Strengthening Self-managed

S S
1. Efforts made by difficulty teamwork and other forms
of objectives and of empowerment.
performance standards.
Include three steps:
2. Clear Objectives and
measures. 1. Participation of setting
3. Reward closely tied goals.
performance. 2. Standards used for
problems solving.
3. Evaluation of total
Weaknesses contribution.

W
Weak commitment to the

firm.
Looking good on paper .
Weaknesses
Only satisfying well- W
Poor Customer Service. motivated workforce.
Not applying to all
employees.
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Example of Internal Control.

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11

Steps in the
Control Process
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Setting Up A
Standard
Performance
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Created based on historical

situations
Can be qualitative or quantitative

01
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Measuring
Actual
Perfomance
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Agree on specific aspects to be

measured
Agree on the accuracy of
measurements
Agree on who will use the

02
measurements
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Comparing
Actual
Performance
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TWO KEY POINTS

Measuring deviation

03
Communicating information
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Taking
Corrective
Actions
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Do nothing
Solve the Problem

04
Revise the Standard performance
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20

Non-Budgetary and
Budgetary control
techniques
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Non-Budgetary Control Techniques

Qualitative control Quantitative

techique control technique
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Qualitative control technique

A method of controlling based on human

judgments about performance that results in a
verbal rather than numerical evaluation

Influence by the competence and ethics of

people collecting information
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Qualitative Control Techniques

External audit Personal observation
Verification of Observation of
financial record by how the plans
external agency carried out
Internal audit Performance
appraisal
Verification of financial Measuring, evaluating,
record by internal reviewing the employees
group performance
Management audit

Use auditing technique to the

evaluate overall effectiveness of
management
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Quantitative control technique

A method of controlling based on numerical

measures of performance

Widely accepted as they appear precise and

objective
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Quantitative Control Techniques

Gantt Chart
Economic-order
03
quantity (EOQ)
PERT 02 04
01 05

Varianc
e
Break-even
analysis
analysis
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Example of Tofu control techniques

Performance appraisal: every week or

month, the manager of Tofu evaluate
employees performance to point out
the deficiency in serving customers.
The information may be gathered from
customers directly or from facebook.

Economic-order quantity: after each

day, tofus manager checks the
inventory to ensure that there are
sufficient ingredients for the next day.
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A Budget

Is a spending plan
expressed in numerical Does place restrictions
terms for a future period on the use of money
of time

Typically involves cash Is a plan for allocating

outflow and inflow resourses
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Type of
budgets
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TYPES
OF
BUDGET
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Types of Budget

Master Budget Material Purchase

.
A budget consolidated A plan that identifies
from the budgets of the raw materials that
various units. must be purchased to
meet production
demand
Cash Budget Human- resource Budget

A forecast of cash A schedule that

receipts and payments identifies the human
resource needs for a
future period
Production Budget Capital Expenditure Budget

A detailed plan that A plan for spending

identifies the products money on assets used
that must be produced to produce goods
Revenue and- Expense Budget
to match the sales
forecast.
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Revenue and - Expense Budget

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Suggestion for
preparing a
budget.

Suggestions for Preparing a Budget
Leave wiggle
room
Optimistic projections with
little basis in reality will
comeback to haunt you.
Budget conservatively for
income and liberally for
expenses
33
Research the Embrace reality
competition
Do some research to find Study the facts carefully,
out how your competitors and take a historical
arrive at their budget perspective in arriving at
estimates the right estimates for any
given financial period
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Budgets and Financial Ratios as Control

Devices

Financial
Budgets and
Alternatives Ratios and
the Control
to Budgets the Control
process
Process
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Alternatives to Budgets

Cost-to-income ratios
Rolling forecast
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Financial Ratios and the Control Process

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37

Managing
cash flow and
cost cutting
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Cash flow statement is divided into three sections

Cash provided by
Cash provided byCash provided by
operating financing activities
investing activities
activities
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The
Balanced
Scorecard
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Activity-based Costing

Activity-based Costing (ABC) is an

accounting procedure that allocates the costs of
producing a product or service to the activities
performed and the resourses used
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Activity-based Costing
Example
Manufacturing Cost Activity-based Cost

Conventional $200 $250

Phone
Water-proof Phone $260 $500
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Measurement of Intellectual Capital

Performance appraisal: every week or
Employee
month, brainpower
the manager is considered as a major
of Tofu evaluate
employees performance to point out
contributor to the wealth of an organization
the deficiency in serving customers.
The information may be gathered from
Intellectual
customers directlyCapital is the value of useful ideas
or from facebook.
and the people
Economic-order who
quantity: aftergenerate
each them. Components
oftofus
day, intellectual capital
manager checks the include employee
inventory to ensure that there are
knowledge, patients and research
sufficient ingredients for the next day.
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43

Information
Systems and
Control
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Information Systems and

Control
An information system (IS), or management information
system (MIS), is a formal system for providing management
with information useful or necessary for making decisions.
 INFORMAT
ION 45

SYSTEMS

Control Computer
Information Aided
Supplied by IS Monitoring of
Work
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Control Information
Supplied by IS
The growth of Information Systems is partly
attributable to the increasing need for useful
control information.
IS can help analyze sales trends on such factors as
time of day, weather, and socioeconomic level of
the neighborhood.
 Example of Control Information 47

Supplied by Information Systems in

TOFU
Report on sales of products
Manage staffs in the stores
Supply information about the market,
customers needs and compertitors
strategy
Control information about products
and stores on the Internet
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Computer Aided Monitoring

of Work
Computer - Aided Monitoring of Work: a computer - based system
gathers data about the work habits and productivity of employees.

Workers Most Likely to Be

Monitored

Electronic Monitoring
System
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Workers Most Likely to Be

Monitored
Office workers, including those in frequent telephone
contact with the public, are the most likely to be
monitored.
High-technology monitoring tools can be applied best
with workers who perform discrete, measurable tasks
during prescribed hours.
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Electronic Monitoring System

Invade employee
Close
privacy and violate
supervision it
their dignity
allows
Contributes to low
manager
levels of job
satisfaction,
absenteeism, high
turnover, and job
stress.
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Characteristics
of Effective
Control
Systems
 Characteristics Of Effective
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Control Systems

Accurate Timely

Focus on
Economically
strategic
Realistic
control points
Coordinated
with the
Flexible
organizations
work flow
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Accurate

Information on performance
must be accurate. Evaluating
the accuracy of the information
they receive is one of the most
important control tasks that
managers face
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Timely

Information must be collected,

routed, and evaluated quickly if
action is to be taken in time to
produce improvements
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Focused on Strategic Control Points

The control system should

be focused on those areas
where deviations from the
standards are most likely to
take place or where
deviations would lead to the
greatest harm.
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Economically Realistic

The cost of implementing a

control system should be less
than, or at most equal to, the
benefits derived from the
control system.
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Coordinated with the Organization's Work

Flow
Control information needs to be
coordinated with the flow of
work through the organization
for two reasons: First, each step
in the work process may affect
the success or failure of the
entire operation. Second, the
control information must get to
all the people who need to
receive it.
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Flexible

Controls must have flexibility

built into them so that the
organizations can react
quickly to overcome adverse
changes or to take
advantage of new
opportunities

Second image caption here