© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Controlling Chapter 13

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Control Specific techniques to direct an employee’s behavior in accomplishing objectives Effective control techniques provide guidance without direct supervision.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Multiple Meanings of Control 1.Establishing standard operating procedures to ensure employees’ proper execution of their tasks 2.Establishing timely implementation of predetermined objectives from the mission of the organization 3.Integrating each independent catering management function into an achievable event plan 4.Protecting a caterer’s assets, including money, food, beverages, and equipment 5.Efficiently using the caterer’s assets to produce a product at a profitable price

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Process of Control 1.Timely and relevant information to make appropriate decisions 2.Creation of achievable standards and operating procedures 3.Monitoring and evaluating each event

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cash Flow Payment policies Menu Expenses Other factors Financial goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pricing the Event Cost-based pricing method Client-based pricing method Competitive-based pricing Market-skimming pricing Market-penetration pricing

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Professional Service Companies Commissions are a positive addition to the caterer’s profit structure. Service companies include: –Entertainment –Photographers –Limousine services

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Code of Ethics Formal statement written and communicated to each employee and each stakeholder Guides individual acceptable behavior Should become part of each employee’s job Caterer must communicate a standard of moral conduct. Ethical standards help create ethical environments.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Financial Component Maximizing shareholder or owner wealth Creating a healthy balance between risk and profitability Key financial management activities include: –Raising capital –Building relationships with suppliers –Installing an accounting system Internal and external funding

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Accounting Function Evaluating and analyzing the data Creating summaries of business transactions –Required for tax reporting purposes –Communicate financial vitality of the operation –Inform investors of wealth management –Provide financial picture of the operation Key reports: –Balance sheet –Income statement