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Controlling
the
Organization
Controlling
-Major management function that
contributes to the achievement of
organizational goals by checking
errors and addressing deviations
from established performance
standards.
Controlling
-Is an ongoing process that
involves members at all levels
of the organization.
-Also considered an end
function and it is also a
dynamic process.
Controlling
Constant monitoring
is vital component of
the control process.
Control Function
– it is the responsibility of everyone, thus
employees are expected to address
problems even if these are not within his or
her area of responsibility.
Anticipatory
Retrospective
Corrective actions should be
quantifiable, measurable and relevant
to the situation being addressed.
Collaboration is vital in all
management functions.
Control Process Main Steps
•1. Establishment of Standards. Develop
criteria by which performance will be
measured. Standards can be quantitative or
expressed in terms of non-measurable
elements.
Time Standards Cost Standards Income Standards
2. Measure of Performance. Performance is
measured by identifying strategic control
points.
3. Comparison of the Actual Performance
with the Standards. The company can also
conduct benchmarking by comparing their
performance with exemplary practices from
other companies.
4. Tasking Corrective Actions and
Realigning Processes when
necessary. Deviations from the
standards may be a result of incorrect
planning, a lack of coordination in the
conduct of tasks or the
misinterpretation of instructions.
The Link between
Planning
and
Controlling
4. Correct deviations
and return to no. 2; or
improve future plans 1. Do the plans
by going back to no.
1.
1. Administrative Control
entails establishing procedures and policies
that ensure efficiency in the activity of the
company.
utilizes documentation to ensure complete
and consistent information.
2. Delegation
assigning an employee to take responsibility
in completing the task.
3. Evaluation
involves the collection of analysis of
information in order to make decisions
• enables the company to identify aspects of
operations and tasks that need revision
4. Financial Reports
provides information on how money is
spent
how profits are maximized by the
company.
Financial ratios used to monitor the
company’s overall financial
performance.
Common financial ratios:
a. Liquidity ratio
b. Leverage ratio
c. Activity ratio
d. Profitability ratio
5. Performance appraisal – this provides general
impression of employee performance.
Tools and methods to appraise the performance of
employees
- Intuitive approach
- Self-appraisal approach
- Trait approach
- Achievement-based approach
- Group approach
6. Policies and Procedures
ensure the employees carry out
tasks in an effective and
efficient fashion and that
directives and instructions are
consistent.
7. Quality Control – defined by the
International Organization for
Standardization (ISO) as “the operational
techniques and activities that are used to
satisfy quality requirements.” An essential
component of quality control is quality
assessment.
The five Ws are as follows:
1. What error was made?
2. Where was it made?
3. When was it made?
4. Who made it?
5. Why was it made?
Management Control
Application
Control is applied to many
functional areas in the business
organization particularly in
accounting and marketing.
Management Control Application
The accounting department provides financial
information that can help determine the
financial stability of the organization.
The marketing department meanwhile,
provides data on the company’s sale
performance.
Account or Financial Control
Three Main Types of Financial
Statements
Balance Sheet
The balance sheet provides a summary
of the company’s financial position over
period of time.
The three major parts of a balance sheet are
the following:
1. Assets are things or resources that the
company owns.
a) Current Assets
b) Property, plant, and equipment
c) Intangible assets
Account receivables refer to the sale
of goods or services that are not yet
collected, or sales still on credit.
Inventory inclues the cost of raw
materials, work-in-process, and finished
goods.
2. Liabilities are the obligations of the
company to creditors for past transactions
such as acquisitions of raw materials and
other’s debts.
Current Liabilities are usually due
within one year while long-term liabilities
have a prescribed period of more than a
year.
a. Notes payable – it is the amount of
loans due based on a written
agreement or promise to pay.
b. Accounts payable – it refers to the
obligations of the company to
suppliers without a written promissory
note and are classified as current
liability.
c. SSS\Philhealth payable – this is a
current liability that is specific to
the Philippines.
d. Income taxes payable – it shows
the amount the company should
remit as taxes to the government.
3. Owner’s equity or stockholder’s equity
shows the amount of capital the
owners of the business have invested.
Marketing Director
• tasked with managing the overall marketing
operations of the organization. Extensive
knowledge in advertising, finance and planning
are crucial in this position.
Marketing Managers (product managers or band
managers)
• tasked with developing strategies for the brand by
analyzing the demand for the or service
• monitor the activities and strategies of competitors
and formulate strategies to maintain awareness of
and demand for the brand.
• identify potential markets, distributors, and
competitors.
• managers also deal with customers, distributors, and
government agencies in the course of their work
Public Relations Managers
• Take charge of promoting the company or
organization to the public and enhancing its
corporate image.
Account Executives
• manage client accounts or departments and
prepare commercials and advertisements for them.
They coordinate with:
Advertising Promotion
Managers managers
Creative Director Promotion
Media Director Specialist
Sales Manager
Sales
Representatives
Operation Management
• Focuses on designing and controlling production
and business operations related to production
Production Manager
• Deal with resource and service require in
manufacturing or production
• Manage qualify specifications, inventory control and
coordinate production tasks the other department in
the organization
Production Scheduling
• ensure a smooth flow of activities.
Production Supervisors
• are assigned to specific parts of the
assembly line or production area
• oversee production operators who do
the actual production work.
Financial Management
Finance
• the lifeblood of business
• the art and science of managing money
• procurement and effective utilization of company
funds.
Finance Manager
• supervises all finance operations
• raises funds, invest in assets and manage them
effectively.
Chief Financial Officer (CFO)
• head of the finance department in
large companies
• reports directly to the president or
chief executive officer (CEO).
Treasurer
mostly involved in major areas of
financial
Controller
is tasked with preparing financial
reports
Finance managers make important decisions in the
ff areas:
1. Investment decision – determine how much of
the total assets should be held or utilized by the
firm and how these will be used by the
company.
2. Financing decision – decide what type of
financing should be availed of the company.
Finance managers make important
decisions in the ff. areas:
3. Asset management decision – the
company must effectively manage the
resulting finances.
•Credit managers
•Cash managers
Finance managers
• are employed by banks, credit
companies and other financial
institutions to supervise
lending, mortgages, investment
and other financial activities.
Materials and Procurement Management