Supervisory Management Week 9: Lecture 2 - Controlling
Nov 14, 2014
Supervisory Management
Week 9: Lecture 2 - Controlling
Control: outcomes
• The purpose of control• How control processes work• Various types of control• Characteristics of an effective control system
The purpose of control
• Provides feedback
The purpose of control
• Helps adapt to change
The purpose of control
• Helps reduce errors
The purpose of control
• Helps cope with increasing complexity & size
The purpose of control
• Helps minimise costs
The control process
1 setting
standards
2measuring
performance
3evaluating deviations
4correcting
1. Setting standards
1 setting
standards
2measuring
performance
3evaluating deviations
4correcting
Control = revised planning
Standards should be:• relevant• realistic• attainable• worthwhile
1. Setting standards
relevant realistic attainable worthwhile
standard
tolerance
2. Measuring performance
1 setting
standards
2measuring
performance
3evaluating deviations
4correcting
Control should be• quantifiable
Reports to be• reliable
2. Measuring performance
quantifiable reliable
3. Evaluating deviations
1 setting
standards
2measuring
performance
3evaluating deviations
4correcting
Large deviations should be investigated.
3. Evaluate deviations
quantifiable reliable
standard
tolerance
Large deviation
4. Correcting
1 setting
standards
2measuring
performance
3evaluating deviations
4correcting
Correcting can include:• improving performance• revising strategies• lowering standards to be more realistic
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
Types of control
• Physical resources• Financial resources• Information resources• Human resources
Physical resources
• Capital & assets and raw materials
inventory Stock-taking
Financial resources
Organisation
1. income 2. assets3. expenses
BUDGET
Information resources
Human resources
Characteristics of effective control
• Integration• Flexibility • Accuracy• Timeliness• Simplicity
Summary: what is control?
• Control is a continuous process• Control is a management process• Control is embedded in each level of organizational
hierarchy• Control is forward looking• Control is closely linked with planning• Control is a tool for achieving organizational activities• Control is an end process• Control compares planned performance with actual
performance
True or False?
a. Control helps cope with changesb. Control systems increase costs in an
organisationc. Controls helps cope with increasing size and
complexityd. Control limits errors