1. CONTROLLING & INTERNATIONAL MANAGEMENT
Chapter 7
CONTROLLING & INTERNATIONAL MANAGEMENT
BBB1113 | Intro to Business Management Faculty of Business Management & Globalization Prepared by Kannan Asokan

2. L E A R N I N G O U T L I N E Controlling
Four (4) steps in control process
3 Types of control and control systems
7 Characteristics of effective controls
Subsystem controls-Finance controls, Marketing controls, human resource controls
Tools of quality control
International management, Multinational corporation
Primary reasons why business become international
Characteristics of multinationals
International environment
Choosing strategies
Major concerns

3. Controlling & Purpose of controlling
Controlling is the management function of establishing performance standards, measuring actual performance activities to see if the standards have been met, and taking corrective action.
The purpose of controlling is to determine whether people and the various parts of the organization are on target and achieving the progress toward the objectives that they planned to achieve.

4. Four (4) steps in control process
Step 1. Establishing Performance Standards Step 2. Measuring Performance Step 3. Comparing Measured Performance to Established Standards Step 4. Taking Corrective Action

5. Types of control (3 Types)
Feed forward Controls – Feed forward controls are future directed: they are designed to detect and anticipate.
Concurrent Controls - Known as ‘in-process’ or ‘steering’ controls, these controls apply to processes as they happen.
Feedback Controls - These post-performance controls focus upon the end results of the process.

6. Control Systems
The composite feed forward, concurrent, and feedback controls make up a “package” or system. A system is a combination of any two or more controls.
Any combination of these controls is used to accommodate various management control needs.

7. 7 Characteristics of effective controls…
1. Focus on Critical Points - The critical control points include all the areas of an organization’s operations that directly affect the success of its key operations. 2. Integration - Trust, confidence, and acceptance of all controls must be a part of the culture. Employees must have faith in these devices. 3. Acceptability - As with integration, employees must accept these devices or methods. 4. Timeliness - Deadlines, time costs, and punctual needs are apparent in this criteria. 5. Economic Feasibility - How much does it cost? What will it save? What are the returns on the investment? The above questions need to be answered and the accompanying expenses to any control or system of controls must be analysed. 6. Accuracy - The information for the control must be useful and accurate. 7. Comprehensibility - Ease of understanding and application is often associated with simplicity.

8. Subsystem controls Finance Controls Marketing Controls
Human Resource Controls

9. Finance Controls
Financial control is at the heart of organizational survival.
The balance sheet focuses on the assets of an organization and who owns them. It shows assets, liabilities, and stockholders equity.
The income statement provides the manager with a tool to review the expenses and revenue of the business on an on going basis.

10. Marketing controls Marketing Research Stockage Marketing Ratios
Sales Quotas
Test Marketing

11. Human resource controls
Statistical Analysis
Human Asset Valuation
Training and Development
Performance Appraisals
Attitude Surveys
Management Audits

12. Some of the tools of quality control
Check sheet — present information in an efficient, graphical format.
Flowchart — used to identify where errors are likely to be found in the system
Control Chart — indicates the range of variability that is built into a system.

13. International management & Multinational corporation
International management - The process of managing resources across national boundaries and adapting management principles and functions to the demands of foreign competition and environments.
Multinational corporation - A company with operating facilities, not just sales offices, in one or more foreign countries, management favours a global market and strategy, seeing the world as their market.

14. Primary reasons why business become international
Search for new customers, new markets
Increased market share
Increased return on investment
Needed raw materials and other resources
Tax advantages
Lower costs
Economic of scales
To better serve customers
To remain competitive
Desire to escape from trade barriers and other government regulations

15. Characteristics of multinationals
Creation of foreign affiliates
Global vision and strategy
Choose certain types of business activities
Locate affiliates in the developed countries in the world
Adoption basic strategies regarding staffing

16. International Environment (PESTEL)
Political environment
Economic environment
Sociocultural environment
Technological environment
Ecological / Physical environment
Legal environment

17. Choosing strategies Export your product or service.
License others to act on your behalf.
Enter into joint ventures (partnership) for mutual benefit to produce or market or both.
Build or purchase facilities outside the home country to conduct business on your own.

18. Major concerns about International Management
Staffing problems and solutions
Compensations
Employee attitudes
Communication problems
Cross-cultural management
Characteristics of controls
Control problems

19. Think & React
“To enjoy good health, to bring true happiness to one's family, to bring peace to all, one must first discipline and control one's own mind. If a man can control his mind he can find the way to Enlightenment, and all wisdom and virtue will naturally come to him.”-Buddha
“A good manager is a man who isn't worried about his own career but rather the careers of those who work for him.”-H. S. M. Burns
“To enjoy freedom we have to control ourselves.”-Virginia Woolf