CHAPTER 16

MANAGEMENT CONTROL
TOOLS
THE CONTROL FUCTION

- requires developing programs to

monitor the activities of a
business and make corrections
when necesary.
TWO MANAGEMENT THEORIES

• MANAGEMENT BY OBJECTIVES
- serves as a planning tool when the objectives are
being set and as a control tool when the results are
monitored and messured.
MBO PLANNING STEPS

Management sets objective with deadlines

Discusses objectives with employees and agrees,

in writing to individual cotributions to overall objectives

Objectives are reviewed periodically with

employees to determine any corrective actions.

Objectives are matched against results

at stated deadlines

employees are rewarded for achieving objectives

TOTAL QUALITY MANAGEMENT

- The underlying principle of TQM is a relentless push

towards continuous improvement, which is accomplished
trough better relationships with customers and suppliers,
reduced production or replacement time, and more open
input from employees.
TQM STRATEGIES

• Benchmarking
• outsourcing
• quality circles
CONTROL REVENUES

• A revenue control and management policy establishes

proper control over all receipts and receivables and helps
ensure sound financial management practices.
CONTROL REVENUES

• CASH FLOW BUDGETING

• COLLECTING ACCOUNTS RECEIVABLE

CONTROL INVENTORY

- is regulating and maximizing the company’s warehouse

inventory. The goal of inventory control procedures is to
maximize profits with minimum inventory investment,
without impacting customer satisfaction levels
INVENTORY AND SALES FLUCTUATIONS

- poorly planned and controlled sales and inventory

purchase objectives can have a domino effect throughout
the entire business operation.
INVENTORY AND SALES FLUCTUATIONS

• personel scheduling

• insurance

• promotions