Halaman 1 Matakuliah: J0084 / Introduction to Management and Business Tahun: 2007 Versi: 1 / 3 Pertemuan 14 (Fourteenth Meeting) Foundations of Control

Halaman 2 Learning Outcome Student should be able to prove that controlling has an important role to achieve organization goals -> C3

Halaman 3 Learning Outline What Is Control Why Is Control Important The Control Process Controlling for Organizational Performance Tools for Controlling Organizational Performance Contemporary Issues in Control

Halaman 4 1. What Is Control It’s the process of monitoring, comparing, and correcting work performance b. Characteristic of Three Approaches to Control Systems: 1) Market control 2) Bureaucratic control 3) Clan control a. Definition

Halaman 5 2. Why Is Control Important a. The Values of Control: 1) Related to planning 2) Empowering employees 3) Protecting the organization and it’s assets

Halaman 6 b. The Planning-Controlling Link Controlling Leading Organizing Planning Standards Measurements Comparison Actions Goals Objectives Strategies Plans Structure Human Resources Management Motivating Leadership Communication Individual and Group Behavior

Halaman 7 3. The Control Process a. Measuring 1) How We Measure 2) What We Measure a) Personal Observation b) Statistical Reports c) Oral Reports d) Written Reports

Halaman 8 b. Comparing Acceptab le Range of Variation Standard Acceptable Upper Limit Acceptable Lower limit Time Period (t) tt+1t+2t+3t+4t+5 Measurement of Performance

Halaman 9 c. Taking Managerial Action 1) Correct Actual Performance a) Immediate corrective action b) Basic corrective action 2) Revise the Standard

Halaman Controlling for Organizational Performance a. What Is Organizational Performance Organizational performance is the accumulated end results of all the organization’s work activities

Halaman 11 b. Measures of Organizational Performance 1) Organizational Productivity 2) Organizational Effectiveness 3) Industry and Company Rankings Popular Industry and Company Rankings Forbes ( Business Week ( Fortune (

Halaman Tools for Controlling Organizational Performance a. Feedforward/Concurrent/Feedbak Controll 1) Feedforward Control 2) Concurrent Control 3) Feedback Control

Halaman 13 Corrects problems after they occur Corrects problems as they happen Anticipates problems Types of Control InputProcessesOutput Feedforward Control Feedback Control Concurrent Control

Halaman 14 b. Financial Controls 1) Traditional Financial Control Measures Popular Financial Ratios Liquidity Current ratio Current assets Current liabilities Objective Ratio Calculation LeverageDebt to assets Acid test Current assets less inventories Current liabilities Total debt Total assets Time interest earned Profit before interest and taxes Total interest charges

Halaman 15 Popular Financial Ratios Objective Ratio Calculation ActivityInventory turnover Sales Inventory Profitability Total assets turnover Sales Total assets Profit margin on sales Net profit after taxes Total sales Net profit after taxes Total assets Return on ivestment

Halaman 16 2) Other Financial Control Measures a) Economic value added (EVA) b) Market value added (MVA) c. Balanced Scorecard 3) Internal processes 2) Customer 1) Financial 4) People/innovation/growth assets

Halaman 17 d. Information Control 1) How Information Used in Controlling Management Information System (MIS) is a system used to provide management with needed information on regular basis 2) Controlling Information e. Benchmarking of Best Practices

Halaman Contemporary Issues in Control a.Adjusting control for Cross-cultural Differences b. Workplace Concerns 3) Workplace Violence 2) Employee Theft 1) Workplace Privacy

Halaman 19 c. Controlling Customer Interactions d. Corporate Governance 1) The role of Boards of Directors 2) Financial Reporting