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Management Control Processes Explained

Management control involves setting standards and evaluating performance against those standards to make corrections if needed. It helps organizations adapt to change, limit errors, cope with complexity, and minimize costs. There are several types of controls, including physical resource controls, human resource controls, and information resource controls. The controlling process involves establishing standards, measuring performance, comparing performance to standards, determining if corrective action is needed, and maintaining or correcting deviations. Effective control is integrated with planning, flexible, accurate, timely, and objective.

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Wasantha Kumara
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91 views12 pages

Management Control Processes Explained

Management control involves setting standards and evaluating performance against those standards to make corrections if needed. It helps organizations adapt to change, limit errors, cope with complexity, and minimize costs. There are several types of controls, including physical resource controls, human resource controls, and information resource controls. The controlling process involves establishing standards, measuring performance, comparing performance to standards, determining if corrective action is needed, and maintaining or correcting deviations. Effective control is integrated with planning, flexible, accurate, timely, and objective.

Uploaded by

Wasantha Kumara
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

Management Control

Click to edit by Presented Master subtitle style

Mr.D.Wasantha Kumara Senior Lecturer Depart of Marketing Mgt University of Kelaniya

4/17/12

Introduction

The process of setting standards and evaluation performance against the set standards to make corrective adjustments if needed to meet the desired objectives as stated in the plan.

Proper controlling process is needed for a better implementation of plans.

No controlling makes even a good plan deviates from results.


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The PlanningControlling Link

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Adapt to environmental change

Limit the accumulation of error

Control helps the organization

Cope with organizational complexity

Minimize costs

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Types of Controls

Areas of Control

Physical resourcesinventory management, quality control, and equipment control. Human resourcesselection and placement, training and development, performance appraisal, and compensation. Information resourcessales and marketing forecasts, environmental analysis, public relations, production scheduling, and economic forecasting.

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Controlling process

Steps.
1 Establi sh standar ds Meas ure performan ce 2 Comp are performance against standards 3 4

Determine need for corrective action

Maintain the status quo

Correct the deviati on

Chan ge standar ds

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Steps in the Control Process (contd)

Establish Standards

Control standarda target against which subsequent performance will be compared.

Control standards should be expressed in measurable terms. Control standards should be consistent with organizational goals. Control standards should be identifiable indicators of performance.

Measure Performance
Performance measurement is an ongoing process.

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Contd.

Compare Performance Against Standards

Define what is a permissible deviation from the performance standard. Utilize the appropriate timetable for measurement.

Determine the Need for Corrective Action


Maintain the status quo (do nothing). Correct the deviation to bring operations into compliance with the standard.

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Forms of Operations Control


Feedba ck Inpu ts Transformati on Outpu ts

Preliminary control

Focuses on inputs to the organizational syste m

Screening control

Focuses on how inputs are being transformed into outpu ts

Postaction control
Focuses on outputs from the organizational system

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Forms of Financial Control

Financial Control

Control of financial resources (i.e., revenues, shareholder investment) as they flow into the organization, are held by the organization (i.e., working capital, retained earnings), and flow out of the organization (i.e., payment of expenses).

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Characteristics of Effective Control

Integration with Planning

the more control is linked to planning, the more effective the control system.

Flexibility

the control system must be flexible enough to accommodate change.

Accuracy

Inaccurate information results in bad decision making and inappropriate managerial actions.

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Contd.

Timeliness

A control system should provide information as often as necessary.

Objectivity

A control system must be free from bias and distortion.

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