Professional Documents
Culture Documents
Chapter 19
control
Office
productivity
Basic
systems
allocating
financial resources,
developing
human resources,
analyzing
Organizational Control
Plans
Targets
Standards of performance
Organizational Control
Effective
controlling requires
information about
Performance standards
Actual performance
Organizational Control
Three types of control
Examples
Pre-employment
drug testing
Inspect raw
materials
Solve Problems as
They Happen
Examples
Adaptive culture
Total quality
management
Employee
self-control
Focus is on
Inputs
Ongoing
Processes
Feedback Control
Solves Problems
After They Occur
Examples
Final quality
inspection
Survey customers
Focus is on
Focus is on
Concurrent Control
Outputs
Feedforward Control
Focus
is on
Human
Material
Financial resources
Attempts
Sometimes
called preliminary or
preventive control
Concurrent Control
Includes self-control on behavior personal values & attitudes
Monitors
ongoing activities to
ensure consistency with
performance standards
Assesses
Feedback Control
Focuses
on organizations outputs
Sometimes
called postaction or
output control
1. Establish
standards of
performance.
Adjust Performance
2. Measure
actual
performance
.
3. Compare
performance
to standards.
If Adequate
Feedback
10
If
Inadequate
4. Do nothing
or provide
reinforcement.
4. Take
corrective
action.
Budgetary Control
Most
Process
11
Responsibility Center
Organizational
12
13
Top-down budgeting
Bottom-up budgeting
14
Financial Statements
15
2.
Financial Statements
For specific point in time
Balance
16
sheet
Owners equity
Financial Statements
For given time interval usually one year
1.
17
Income statement
Financial Analysis
Managers
18
Liquidity ratios
Activity ratios
Profitability ratios
Leverage ratios
How Determining
Current assets/Current
liabilities
Activity Ratios
Total sales/Average
Inventory turnover
inventory
Conversation ratio
Purchase orders/Customer
inquiries
Profitability Ratios
Net income/Sales
Profit margin on sales
Gross income/Sales
Gross margin
Net income/Total Assets
Return on assets
(ROA)
Leverage
Total debt/Total assets
Ratios
Debt ratio
19
Tells You
1. Ability to meet its current debt
obligations
2. If there are sufficient assets to
convert into cash to pay off debts
1. Measures internal performance
2. How many times the inventory
is used up to meet the total
sales figure
3. Companys effectiveness in
converting inquiries into sales
1. Profits relative to a source,
such as sales or assets
2. What a company earned from
its assets
1. Funding activities with
borrowed money
2. A debt ratio above 1.0 to be a
poor credit risk
Control Philosophies
20
rules
policies
hierarchy of authority
reward systems
written documentation
cultural values
traditions
shared beliefs
trust
21
Team
Selects
Problems to Be
Solved
Team
Gathers Data and
Analyzes
Problems
22
Team
Recommends
Solutions
Decision by
Top Management
23
Six
Many
TQM
24
25
26
27
Customers
How well do we
serve our
customers?
Internal Business
processes
Mission
& Goals
Are we learning,
changing, and
improving?
Do internal activities
and processes add
value for customers
and shareholders?
Understand
your Competencies
Set
Career Goals
Maintain
Get
Networks
a Mentor