The Control System

Control

Definition monitoringmonitoring employees’ activities, determining,

whether the organization is on target toward its goals, and making corrections as necessary.

Purpose To measure progress toward planned

performance and apply corrective measures.

Why Is Control Important?

As the final link in management functions:Controls let managers know whether their

goals and plans are on target and what future actions to take.

Control systems provide managers with information and feedback on employee performance.

Controls enhance physical security and help minimize workplace disruptions.

What is control system

Control systems are designed to measure progress toward planned performance and, if necessary, to apply corrective measure

Four major steps

Setting performance standards;Measuring performance;Comparing performance against the

standards and determining deviationsTaking corrective action

Setting performance standards

Standard The level of expected performance for a given

goal; Desired performance levels Job requirements, objective data; Reference: quantity; quality; time used; cost;

When do managers set standard?

Measuring: How and What We MeasureControl Criteria

Employees Satisfaction Turnover Absenteeism

Budgets Costs Output Sales

Measuring performance

Information collectionThree sources:

Written reports; Formal, broad level, precise;

Oral reports; Swift, two-way communication No records

Personal observations; An intimate picture General and subjective Time consuming Misleading

Comparing performance

To evaluate the performance;Note: range of variation acceptable; Exception

Significant deviations;

Managers should pay attention to exceptional cases;

Comparing

Determining the degree of variation between actual performance and the standard. Significance of variation is determined by:

The acceptable range of variation from the standard (forecast or budget).

The size (large or small) and direction (over or under) of the variation from the standard (forecast or budget).

Taking corrective action

To adjust operation to achieve the initially planned results;

By whom? those having authority (Higher-ups) the operator at the point; Corrective action Immediate corrective action Basic corrective action

Taking Managerial ActionCourses of Action

“Doing nothing” Only if deviation is judged to be insignificant.

Correcting actual (current) performance Immediate corrective action to correct the problem at once. Basic corrective action to locate and to correct the source of

the deviation. Corrective Actions

Change strategy, structure, compensation scheme, or training programs; redesign jobs; or fire employees

Taking Managerial Action (cont’d)

Courses of Action (cont’d) Revising the standard

Examining the standard to ascertain whether or not the standard is realistic, fair, and achievable.• Upholding the validity of the standard• Resetting goals that were initially set too low or too high.

Taking corrective action

Action A change in a procedure or method; A disciplinary action; A major organizational modification; A change of the standard.

How does a teacher control study?

Types of control

Three types of control

Feedforward controlConcurrent controlFeedback control

Feedforward Control

Definition:Process control in which changes are

detected at the process input and an anticipating correction signal is applied before process output is affected.

Feedforward Control

Characteristic:Future orientedLimiting activities in advanceprevent the problems before they arise

Advantages and disadvantages

Advantages:Prevents accidents before they occur.Easy to be accepted and implemented.

Disadvantages:Need massive accurate information.Hard to estimate the new situation and t

he question.

examples

Inspection of raw materials Proper selection and training of employeesJapan’s unique cost management system

Concurrent control

Definition:Take place while plans are carried out , is the heart of any control system.

Characteristic:While plans are being carried outDirecting , monitoring and fine-tuning

activities

Advantages and disadvantages

Advantages:Is helpful to improve staff's working abili

ty and the self-control ability.Reduce loss quickly

Disadvantages:The cost is highhard to be accepted

Examples

Supervisors monitor the employeesProduction line Question:How does Information technology affect

the concurrent control?

Feedback control

Definition:Feedback control implies that performance

data were gathered and analyzed and the results returned to someone (or something) in the process to make corrections.

Feedback control

Characteristic:Waiting for results and comparing them

with goalsanalyzing the reason taking corrective action

Advantages and disadvantages

Advantages:Summarizing the rule for further

implementation, creating the condition , realizing the positive cycle, enhancing the efficiency and so on.

Disadvantages:The deviation has produced before the

implementation measure.cannot control the process in time

Important aspect—Timing

If feedback on performance is not timely, managers cannot quickly identify and eliminate the problem and prevent more serious harm.

examples

The product quality checksEvaluate an accomplishment

Difference and connection

In put

Transformation processes

Out put

Feedforward control

Feedback control

Concurrent control

Difference

Feedfordward control

Concurrent control

Feedback control

The time they take place

Focus on in a control system

Function

Control type

Aspect

Can you tell more difference?

Difference

Feedfordward control

Concurrent control

Feedback control

The time they take place

Before operations begin

While plans are being carried out

After the fact

Focus on in a control system

input Transformation processes

Out put

Function Prevent problems before they arise

Monitor behavior Point out and correct improper performance

Control type

Aspect

Can you tell more difference?

connection

Three type of control Compose a control system .They mutually affect.Preliminary control sets antecedents Concurrent control monitor behavior According to

the antecedents and find the information results.Feedback control analyze the results in order to

correct improper performance or revised the antecedents.

which type of control do they belong to?

Rocket launchingLegislationsign contract Work summaryDirecting working reduce the staffrevises the law

Question

Analyzes the control types of our school and their connection during the appraisal stage.

Budgets and Their Types

Budgets

The origin of budget: France in the Middle Ages

Definition: A budget is simply a financial plan listing in detail the resources or funds assigned to a particular product, division, or project.

Developing a budget

Guidelines for budget preparation: detailed economic, sales, and profit forecasts

Who?1. Budgets are developed at the top

management levels.2. The department and individuals

responsible for implementation should be allowed to contribute to the development of budget.

The advantages of the “bottom-up” approach

The process of developing a comprehensive budget

Building flexibility into the budget

A serious drawback to many budgetsHow to avoid this problemVariable budget: a series of different

budgets based on different levels of outputFlexible budgets, sliding-scale budgets,

step budgets

Program Planning Budgeting Systems (PPBS)

Five basic steps:1. List and analyze the objectives of the

activity.2. Analyze the results of a given program

or activity based on the objectives.3. Estimate future program costs as well

as original outlays.

Program Planning Budgeting Systems (PPBS)

Five basic steps:4. Analyze alternatives.5. Integrate the first four steps into the

budgetary process.

Program Planning Budgeting Systems (PPBS)

The advantages of PPBS:1. It relates the budget to agency or

departmental objectives and requires accountability.

2. It requires a realistic appraisal of future costs and requires managers to justify their decision.

3. It brings into sharp focus the relationship between costs and benefits.

Zero-Base Budgeting (ZBB)

What is the essence of zero-base budgeting?

The steps of zero-base budgetingThe advantages and disadvantages of

zero-base budgetingThe development of ZBB concept

Types of Budgets

Manufacturing:1. Manufacturing Budget2. Capital Expenditures Budget

Types of Budgets

Marketing:1. Marketing Budget2. Product Budget

Types of Budgets

Finance:1. Cash Flow Budget2. Budget Income Statement3. Balance Sheet Budget

Types of Budgets

Research and General Management:1. Research and Development Budget2. Executive Staff Budget3. Branch and Regional Budget