Control Systems Lecture #19

Control Systems Control: Process of ensuring that the organization is attaining its goals

Control Process Establish Performance Standards Measure Performance Compare Performance to Standards Corrective Action

Establish Performance Standards What level of performance are we requiring? Who sets the standards?

Measure Performance Accurate measure of performance When is performance measured? Who measures performance?

Compare Performance to Standards If performance matches standards: OK If performance is above standards: MAYBE things are okay If performance is below standards: Corrective Action

Corrective Action The purpose of corrective action is to get performance up to standard, not to punish people

Control System Example

Types of Standards

Physical Standards 240 bottles/minute

Cost Standards Operating Costs unit cost machine hour cost

Capital Standards Inve$tment Cost

Revenue Standards Sale$, Profit$

Program Standards Deadlines

Program Standards Deadlines

Intangible Standards Reputation Goodwill