Foundation of Control

1. MGT 101 - Principles of Management and Business Foundation of Control • Faisal AlSager Week 12

2. Objectives • Explain the nature and importance of control • Describe the three steps in the control process • Discuss the types of controls organizations and managers use

3. What is Control? And Why? • Control: is the management function tat involves monitoring activities to ensure that they’re being accomplished as planned and correcting any significant deviations • Why is control important? • Goals: to ensure that what employees are supposed to do is being done and goals are being achieved. • Empowering: to provide information and feedback on employee enforcement and minimize the chance of potential problems • Organization and assets: to protect organization and assets against threats (like natural disasters, financial pressure and scandals, workplace violence, supply chain disruptions, security breaches, and even possible terrorist attacks)

4. Planning-Controlling Link

5. The Control Process • Definition • A three-step process of measuring actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards

6. The Control Process Is standard being attained? Do nothing Yes Compare actual performance with standard No Is variance acceptable? Do nothing Yes Goals Standard Measure actual performance No Is standard acceptable? Identify cause of variation Yes No Revise standard Correct performance

7. How Do We Measure? • Four common sources of information frequently used to measure performance: • Personal observation • Statistical reports • Oral reports • Written reports

8. MBWA • Management by Walking Around (MBWA): when a manager is out in the work area interacting with employees

9. Range of Variation • Range of Variation: the acceptable parameters of variance between actual performance and a standard Acceptable upper limit Acceptable range of variation Standard Acceptable lower limit t t + 1 t + 2 t + 3 t + 4 t + 5

10. How to Correct Actual Performance? • Immediate Corrective Actions: corrective action that addresses problems at once to get performance back on track • Basic Corrective Actions: corrective action that looks at how and why performance deviated before correcting the source of deviation

11. When Does Control Take Place?

12. Learning Outcomes • Control is important because it helps us make sure that the organization goals are better attained and that organizational assets are well maintained • The control process is a three-step process of measuring actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards • The company needs to take different control actions and at different times depending on the need for a corrective action