Yeditepe Üniversitesi
ACM105
Informatics Management
Introduction to Computing
and
Information Processing
Leman Türkoğlu, PMP, ITIL
Course Agenda
Week
# Topic
1 Course Syllabus & Introduction
2 Management and IT resources
3 Management Strategy
4 Organization
5 Planning
6 Culture and Ethics in Business
7 Midterm Exam
8 Leading
9 Decision Making
10 Management Control Function
11 IT Infrastructure and Management
12 Information Systems & Collaboration
13 Short Exam 2 / Case Study
Planning Ahead — Key Takeaways
Identify the types of controls used by
managers and the reasons for them.
List and describe the steps in the control
process.
Explain the use of common control tools and
techniques.
Outline
1. Managerial Control
⮚ Importance of controlling
⮚ Types of controls
⮚ Internal and external control
2. The Control Process
⮚ Establish objectives and standards
⮚ Measure actual performance
⮚ Compare results with objectives
⮚ Take corrective action
3. Control Tools and Techniques
⮚ Project management and control
⮚ Inventory control
⮚ Breakeven analysis
⮚ Financial controls
⮚ Balanced scorecards
The role of controlling in the management process
Symptoms of an out-of-control company
Absence of policies – the firm’s expectations are not
established in writing.
Lack of agreed-upon standards – organization’s
members are unclear about what needs to be achieved.
“Shoot the messenger” management – employees
feel their careers would be at risk if they reported bad
news.
Lack of periodic reviews – managers do not assess
performance on a regular, timely basis.
Symptoms of an out-of-control company
Bad information systems – key data are not captured,
then measured/analyzed and reported in a timely and
easily accessible way
Lack of ethics in the culture – organization members
have not internalized a commitment to integrity; and finally
Top management & senior managers do not emphasize
or value the need for controls, or they set a bad
example.
Why and How Managers Control
Controlling
The process of measuring performance and taking
action to ensure desired results
⮚ Has a positive and necessary role in the
management process
⮚ Ensures that the right things happen, in the
right way, at the right time
Benefit: Organizational learning (Example: After-
action review)
Benefits of management control
Organizational learning: balance between exploitation
and exploration in organization
Organizations need to :
⮚ exploit their existing resources to be able to
generate revenues and earnings
⮚ explore new opportunities and resources, create
innovations and adapt to arising changes
Management control systems influence the behavior of
managers and employees. Therefore, management
control systems can further the exploitative as well as the
exploratory behavior of employees in an organization.
Why and How Managers Control
Feedforward controls
⮚ Employed before a work activity begins
⮚ Ensures that:
⮚ Objectives are clear
⮚ Proper directions are established
⮚ Right resources are available
⮚ Goal is to solve problems before they occur
Why and How Managers Control
Concurrent controls
⮚ Focus on what happens during work process
⮚ Monitor ongoing operations to make sure they
are being done according to plan
⮚ Goal is to solve problems as they occur
Why and How Managers Control
Feedback controls
⮚ Take place after work is completed
⮚ Focus on quality of end results
⮚ Goal is to solve problems after they occur and
prevent future ones
Feedforward, concurrent, and feedback
controls
Why and How Managers Control
Internal and external control
⮚ Internal control
⮚ Allows motivated individuals and groups to exercise
self-discipline in fulfilling job expectations
⮚ External control
⮚ Occurs through personal supervision and the use
of formal administrative systems
Why and How Managers Control
Self-control
Internal control that occurs through self-discipline in
fulfilling work and personal goals and responsibilities
Analyzing more than 120 management papers, it is found that
there are three main reasons why people occasionally lose self-
control:
1) self-control is a finite cognitive resource
2) different types of self-control tap the same pool of self-
control resources
3) exerting self-control can negatively affect future self-control if
it is not replenished.*
*HBR article by Kai Chi (Sam) Yam, Huiwen Lian, D. Lance Ferris and Douglas Brown-
June 05, 2017.
Why and How Managers Control
Bureaucratic control
⮚ Influences behavior through authority, policies,
procedures, job descriptions, budgets, and day-to-day
supervision
Clan control
⮚ Influences behavior through norms and expectations
set by the organizational culture
Market Control
⮚ Influence of market competition on the behavior of
organizations and their members
⮚ Control based on the use of pricing mechanisms and
economic information to regulate activities within
organizations
EXAMPLES OF MARKET CONTROL
Four steps in the control process
The Control Process
Step 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
The Control Process
Step 2 — measuring actual performance
⮚ 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
The Control Process
Step 3 — comparing results with
objectives and standards
⮚ Need for action = Desired Performance –
Actual Performance
⮚ Comparison methods:
⮚ Historical comparison
⮚ Relative comparison
⮚ Engineering comparison
The Control Process
Step 4 — taking corrective action
Taking action when a discrepancy exists
between desired and actual performance
Management by exception
⮚ Giving attention to situations showing the greatest
need for action
⮚ Types of exceptions
⮚ Problem situation
⮚ Opportunity situation
After-action review
A frank and open-minded discussion of four basic
questions aimed at continuous improvement.
MANAGEMENT AUDITS
Management Audit: An evaluation of effectiveness
and efficiency of various systems within an
organization
External Audit: An evaluation conducted by one
organization, such as a CPA firm, on another.
Internal Audit: A periodic assessment of a
company’s own planning, organizing, leading, and
controlling processes.
Control Tools and Techniques
Project Management
Overall planning, supervision, and control of
projects
Projects – unique one-time events that occur within
a defined time period
Gantt chart – graphic display of scheduled tasks
required to complete a project
CPM/PERT – combination of the Critical Path Method
and Program Evaluation and Review Technique
Gantt Chart
CPM/PERT CHART
Control Tools and Techniques
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
Control Tools and Techniques
Breakeven analysis
Breakeven point
Occurs where revenues just equal costs
Breakeven analysis
Performs what-if calculations under different revenue
and cost conditions
Use of breakeven analysis to make informed “what-if”
decisions
Basic foundations of a balance sheet and income
statement
Control Tools and Techniques
Basic Financial Ratios
Liquidity
The ability to generate cash to pay bills
Leverage
The ability to earn more in returns than the cost of
debt
Asset management
The ability to use resources efficiently and operate at
minimum cost
Profitability
The ability to earn revenues greater than costs
Control Tools and Techniques
Balanced Scorecard (BSC)
Factors used to develop scorecard goals and measures:
⮚ Financial performance
⮚ Customer Satisfaction
⮚ Internal process improvement
⮚ Innovation and learning
Use of Key Performance Indicators (KPIs)
https://www.youtube.com/watch?v=W1i59QkU-Ss
Reference Material
Introduction to Information Systems, (2017). 7th
Edition by R. Kelly Rainer, Brad Prince. Wiley
Management Information Systems: Managing
The Digital Firm, (2016) 14th Ed. Laudon, K.C. and
Laudon, J.P.
Management 13th Edition
John R. Schermerhorn Jr., Daniel G.
Bachrach
