The Control System

Control Definition Purpose monitoring 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 deviations Taking corrective action

Setting performance standards 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 Measure Control Criteria Employees Satisfaction Turnover Absenteeism Budgets Costs Output Sales

Measuring performance Information collection Three sources: Written reports; Formal, broad level, precise; Oral reports; Swift, two-way communication No records Written reports: statistic reports; figures; Oral reports: meetings, party, face to face conversation, phone talk;

Personal observations; An intimate picture General and subjective Time consuming Misleading Mbwa: management by walking around

Comparing performance To evaluate the performance; Note: range of variation acceptable; Exception Significant deviations; Managers should pay attention to exceptional cases; For some activities relatively small deviations are acceptable; while in others a slight deviation may be serious;

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 Basic corrective action: how deviation, why, correct;

Taking Managerial Action Courses 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 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

Feedforward control Concurrent control Feedback control Three types of control Feedforward control Concurrent control Feedback 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. A temperature sensor outside of a room to indicate a drop of temperature so people can start heating the room Speed limit on highway.

Limiting activities in advance prevent the problems before they arise Feedforward Control Characteristic: Future oriented Limiting activities in advance prevent the problems before they arise

Advantages and disadvantages Prevents accidents before they occur. Easy to be accepted and implemented. Disadvantages: Need massive accurate information. Hard to estimate the new situation and the question.

Inspection of raw materials Proper selection and training of employees examples Inspection of raw materials Proper selection and training of employees Japan’s unique cost management system

Take place while plans are carried out , Concurrent control Definition: Take place while plans are carried out , is the heart of any control system. Characteristic: While plans are being carried out Directing , monitoring and fine-tuning activities

Advantages and disadvantages Is helpful to improve staff's working ability and the self-control ability. Reduce loss quickly Disadvantages: The cost is high hard to be accepted

Supervisors monitor the employees Production line Question: Examples Supervisors monitor the employees Production 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.

Waiting for results and comparing them with goals analyzing the reason Feedback control Characteristic: Waiting for results and comparing them with goals analyzing the reason taking corrective action

Advantages and disadvantages 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.

The product quality checks Evaluate an accomplishment examples The product quality checks Evaluate an accomplishment

Difference and connection Out put In put Transformation processes Concurrent control Feedback control Feedforward control

Can you tell more 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?

Can you tell more 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?

Three type of control Compose a control system . They mutually affect. 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 launching Legislation sign contract Work summary Directing working reduce the staff revises 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 budgets How to avoid this problem Variable budget: a series of different budgets based on different levels of output Flexible 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 budgeting The advantages and disadvantages of zero-base budgeting The development of ZBB concept

Types of Budgets Manufacturing: 1. Manufacturing Budget 2. Capital Expenditures Budget

Types of Budgets Marketing: 1. Marketing Budget 2. Product Budget

Types of Budgets Finance: 1. Cash Flow Budget 2. Budget Income Statement 3. Balance Sheet Budget

Types of Budgets Research and General Management: 1. Research and Development Budget 2. Executive Staff Budget 3. Branch and Regional Budget