GPA 90

1. Lê Thị Huyền My - BABANS18082

2. Lê Nguyễn Lê Nguyễn - BABAIU16095
3. Nguyễn Đông Pha - BABAWE18330
4. Nguyễn Hoàng Tú Quỳnh - BABAWE18561
5. Nguyễn Thị Hồng Thy - BABANS18158
6. Trương Phạm Thụy Vy - BABAWE18319
7. Phan Thị Như Thuận - BABAWE18495
 Chapter 9

CONTROL PROCESSES
AND SYSTEMS
Outline Content Case
 OUTLINE

1. Nature of control

2. The control process

3. Control tools and techniques

Nature of control
• Power
What is control?
• Positive & necessary role Why control is
in management process
important?
• Under control: Good

• Out of control: Generally bad

Control systems

Controlling

The process of measuring

performance and taking action
to ensure desired results
The role of controlling in the management process
After – action review (AAR): systematic assessment of lessons
learned and results accomplished in a completed project.

Benefits:
• Make continuous improvement a
shared norm
• Encourage to take responsibility
for how they - who involved, acted,
what they achived, how they can do
better in the future
Types of controls

Feedforward Controls

Concurrent Controls

Feedback Controls
Feedforward, concurrent, and feedback controls.
 Take place before a work
activity begins

Ensure:
• Objectives are clear
Feedforward • Proper direction are
Controls established
• The right resources are
(Preliminary Controls) available
=>To accomplish the objectives.

Being preventive in nature:

take a forward - thinking and
proactive approach to control.
 Focus on what happens
during work process

Ensure things are being

done according to plan
Concurrent Controls
(Preliminary Controls) Goal: solve problems as
they occur
 Takes place after work
is completed

Ensure:
• Solve problem after they
occur
Feedback Controls • Prevent future ones
(Post-action Controls) =>Improve things in the future.

Focus on the quality of end

results rather than on inputs
and activities
Internal and external control
Internal control (Self-control)

Self-discipline in fulfilling work

and personal responsibilities
 Advantages Disadvantages

● Require a high
● Improve self-
degree of trust
management skill
● Capability to
● Freedom organize mission to
do jobs well
● Exercise self-
● Hardly adapt with
discipline the complex
culture
External control (Self-control)

Bureaucratic control

Clan control

Market control
• People act in harmony with
organizational interests
• Influences behavior through
authority, policies, procedures, job
description, budgets and day-to-
day supervision
• Laws and regulations: establishes
procedures to regulate the financial
reporting and governance on
publicly traded corporations Bureaucratic control
Advantages:
Assess performance
Make sure members behave
toward one another respectfully

Disadvantages:
● Costly
● Uncomplexible reacting to
unforeseen events
● Rules are easy to make but difficult
to eradicate
 Clan control
(Normative control)

Influences by norms and

expectations set by the
organizational culture

Reflect the outlook of

performance compared with
the same group of social
 Clan control
(Normative control)

Drawbacks:
● Lack of structures
● Not perform at full
capacity
 Market control
Influences of market competition on the
behavior of organizations and their members

Response to customer feedback and what

competition are doing
Non- appropriate in

Drawbacks
The control
process
Four steps in the control process
 1. Establishing objectives
and standards

Output standards
Measure performance results
in terms of quantity, quality,
cost, or time

Input standards
Measure effort in terms of
amount of work expended in
task performance
 2. comparing results with
objectives and standards

Goal is accurate measurement of actual

performance results and/or
performance efforts

Must identify significant differences

between actual results and original plan

Effective control requires measurement

 3. Compare results with
objectives and standards

Control equation:
Need for action = Desired Performance – Actual Performance

Comparison methods:
• Engineering comparison
• Historical comparison
• Relative comparison
 4. Take corrective action

Management by
exception
Giving attention to
situations showing the
greatest need for action

Types of exceptions
Taking action when a • Problem situation
discrepancy exists between • Opportunity situation
desired and actual performance
 Control tools
and techniques
 n d
t n ta Projects
j ec me
r o e one-time activities with many
P nag l component tasks must be
a
M ntro completed in proper order and
according to budget
co Gantt chart
graphically displays the scheduling of tasks
required to complete a project

CPM/PERT
A combination of the critical path
method and program evaluation
and review technique
Gantt Chart
Critical Path
Inventory control

What is Inventory ?
 Inventory control
Ensures that inventory is only big
enough to meet immediate needs

Lose sales &

Less
customers
inventory

Too much Higher

inventory expense
 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
Breakeven point
Occurs where
revenues just equal
costs
Breakeven Point = Fixed Costs ÷ (Price – Variable Costs)

Breakeven analysis
Performs what-if calculations
under different revenue and
cost conditions
Use of breakeven analysis to make informed “what-if” decisions
Financial Controls
 Balance sheet Format
shows assets and liabilities
at one point in time Assets = Liabilitieso
Income statement
Shows profits or
losses at one point
in time

Sales – Expenses = Net Income

 Basic Financial Ratios
Liquidity: The ability to
generate cash to pay bills
 
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐑𝐚𝐭𝐢𝐨=
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
 
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔 − 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒊
𝑸𝒖𝒊𝒄𝒌 𝑹𝒂𝒕𝒊𝒐=
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
Leverage: The ability to earn
 
more in returns than the cost of 𝑻𝒐𝒕𝒂𝒍 𝑫𝒆𝒃𝒕𝒔
debt
𝑫𝒆𝒃𝒕 𝑹𝒂𝒕𝒊𝒐=
c 𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
 Basic Financial Ratios
Asset management: The ability to use resources efficiently and operate at
minimum cost
 
𝑺𝒂𝒍𝒆𝒔
𝑨𝒔𝒔𝒆𝒕 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
 
𝑺𝒂𝒍𝒆𝒔
𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
c
 Basic Financial Ratios
Profitability:The ability to earn revenues greater than costs
 
𝑵𝒆𝒕 𝒊𝒏𝒄𝒐𝒎𝒆
𝑵𝒆𝒕 𝑴𝒂𝒓𝒈𝒊𝒏=
𝑺𝒂𝒍𝒆𝒔
 
𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑨𝒔𝒔𝒆𝒕𝒔=
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
 
𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚= ′
c𝑶𝒘𝒏𝒆 𝒓 𝒔 𝑬𝒒𝒖𝒊𝒕𝒚
Balanced Scorecards
Tallies organizational performance in financial, customer
service, internal process, and innovation and learning areas

1 Financial performance

2 Customer satisfaction

3 Internal process improvement

4 Innovation and learning

 Financial
performance

Innovation MISSION Customer

& VISION
& Learning satisfaction

Internal
Process
improvement
Case study
 In a company the manager is trying
to find out the deviation between the
actual number of fans produced and
a desired number. He already
knows about the standard as the
company has assigned him a
definite quantity of fans to be
produced.
Identify the step of controlling
process applicable in this case.
Explain why?

a
MANY
THANKS!