MGMT101 Chap 15 0902.pptVIP

Essentials of Management Chapter Fifteen Essentials of Control Learning Objectives Explain how controlling relates to the other management functions. Understand the different types and strategies of control. Describe the steps in the control process. Explain the use of non-budgetary control techniques. 5. Explain how managers and business owners manage cash flow and control costs and use non-traditional measures of financial performance. 6. Specify several characteristics of effective controls. Controlling The control function of management involves measuring performance then taking corrective action if goals are not being achieved. Controlling has been referred to as the terminal management function. Controlling and the Other Management Functions Types and strategies of control The time element of controls Preventive control takes place prior to the performance of an activity. (before) Prevents anticipated problems. The most cost – effective control. Requires timely and accurate information that is often difficult to develop. Types and strategies of control The time element of controls Concurrent controls monitor activities while they are carried out. (during) Observe performance, notice the problem and immediately make a constructive suggestion. Correct it before it gets serious. Types and strategies of control The time element of controls Feedback controls evaluate an activity after it is performed. (after) Pointing out what went wrong in the past. Provide guidelines for future corrective action. However, by the time manager has the information, the damage has already taken place. Types and strategies of control External vs. internal controls External control strategy is based on the belief that employees are motivated primarily by external rewards and need to be controlled by their managers. 3 steps to be effective: the standards need to be relatively difficult. cannot be manipulated or distorted by others. rewards must be directly and openly tie