1. Prepared by Pheng Khna, Siv VutthyBuild Bright University 1 Controlling i-What is controlling It is the process of monitoring and adjusting organizational activities to ensure they are being accomplished as planned.  Why is Control Needed? 1.To adapt to change and uncertainty 2.To discover irregularities and errors 3.To reduce costs, increase productivity, or add value 4.To detect opportunity 5.To deal with complexity 6.To decentralize decision making and facilitate teamwork Chapter5:

2. Prepared by Pheng Khna, Siv VutthyBuild Bright University 2 iI- The control Cycle 1-Establish the standard: “What is the desired outcome we want?” 2-Measure performance: “What is the actual outcome we got?“ 3-Compare performance to standard: “How do the desired & actual outcome differ?” 4-Take corrective action, if any: “What change should we make to obtain desired?”

3. Prepared by Pheng Khna, Siv VutthyBuild Bright University 3 iII- types of control 1-Feedforward : for the future “What is the desired outcome we want?” 2-Concurrent: for the present “What is the actual outcome we got?“ 3-Feedback: for the past OutputInput Feedforward Control Anticipate problem Processes Concurrent Control Corrects problem as they happen Feedback Control After they occur

4. Prepared by Pheng Khna, Siv VutthyBuild Bright University 4 iV- Levels of control There are three levels of control: 1-Strategic Control by top managers is monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed. 2-Tactical Control by middle managers is monitoring performance to ensure that tactical plans those at the divisional or departmental level-are being implemented and taking corrective action as needed. 3-Operational Control by first level managers is monitoring performance to ensure that operational plans day-to-day goals-are being implemented and taking corrective action as needed.

5. Prepared by Pheng Khna, Siv VutthyBuild Bright University 5 V- organizational control system 1-Management Control Process: A-External Audit  Corporate and  Chose the best supplier  Finding the Strength and Weakness for taking the advantage from the opportunity  Avoid the contingency lost B-Internal Audit  Budgeting  Sale budgeting  Financial control

6. Prepared by Pheng Khna, Siv VutthyBuild Bright University 6 2-Why Do We Need to Control It is very important, the final link in the functional chain of management. Controlling Standard, Measurements, Comparisons, Actions Planning Goals, Objectives, Strategies Leading Leadership, Motivation, Communication Organizing Structure, HRM

7. Prepared by Pheng Khna, Siv VutthyBuild Bright University 7 A-Financial Control Top managers analyze the financial statement (Balance sheet, and Income statement) to valuate the performance company. Managers use ratio analysis as a tool to analyze financial statement: Example  Current ratio=Current Assets/Current Lia  Inventory turnover=COGS/Inventory  Debt ratio=Total Lia/Total Asset  Return on asset=Net income/Total Asset

8. Prepared by Pheng Khna, Siv VutthyBuild Bright University 8 B-Budget Control There are two major types of budget: 1.Operating budget: it is the budget that we can see on the operating expense such as supplier, salary, wage, administrative expense, and other. 2.Capital expenditure budget: it is the capital that expense on fix assets in business such as land, building, machine, and equipment.

9. Prepared by Pheng Khna, Siv VutthyBuild Bright University 9 C-Quality Control It is a assessing the products or services 1.Performance: how to well the product performs or operates. 2.Features: It is the ability to include extra options or add on to the main product. 3.Reliability: Is the product dependable (reliable) or does it often breakdown. 4.Conformance: Does the product conform to existing standards? 5.Durability: If a product is strong and lasts for many years, then it is durable.

10. Prepared by Pheng Khna, Siv VutthyBuild Bright University 10 C-Quality Control con’t It is a assessing the products or services 6.Serviceability: It is the ability to maintaining (repair or problem solving) the product. 7.Aesthetics: How to attractiveness of the product 8.Perceived quality: It is the public image of the product such as high quality are best on the brand name, IBM, NOKIA, …