ControllingCo, V China Marian B.

Ngo, Janne Pauline

Ong, Chelsea Anne S.

Sarangaya, Gail V.

DEFINITION

Ensuring that objectives are achieved according to plan

ELEMENTS OF CONTROL

PLAN

• Stipulates what NEEDS to be done.

• BASIS to determine if things are in control

• Pertains to any or all SITUATION, OBJECTIVE, SCHEME, ACTION

OR RESOURCE ALLOCATIONS.

ACTUAL

• It is COMPARED with the plan.

• If it deviates from the plan, adjustments are made.

FEEDBACK

• DEVIATION between the actual and the plan

• Can be regular depending on the importance of the plan

• Reported as needed by the manager (controller)

ALLIGNMENT

• ELIMINATING deviation by adjusting the actual or adjusting the plan

• PRECONTROL prevents deviation by instituting measures prior to plan implementation (PREVENTIVE CONTROL).

• CONCURRENT control happens when control is implanted simultaneously with the plan.

• POSTCONTROL is correcting the deviation after the actual performance (CORRECTIVE OR FEEDBACK CONTROL).

ELEMENTS OF CONTROL

TYPES OF CONTROL

TIME OF IMPLEMENTATION

• Preventive or Feed Forward controls – before

• Example: design of fail-safe product and method, use of quality resources, training of workers, trial run, etc.

• Concurrent or Steering controls – during

• Example: production work sampling, daily productivity monitoring of resources, periodic financial variance reporting, etc.

• Corrective or Feedback controls – after

• Example: customer feedback, equipment repair, product recall, employee appraisal, and financial adjustments.

TYPES OF CONTROL

SOURCE OF CONTROL

• Self-control – allows individuals to exercise control

• External Control – occurs through personal supervision and formal administrative systems

• Examples: performance appraisal, compensation and benefit, employee discipline, and management-by-objective.

TYPES OF CONTROL

BUSINESS FUNCTIONS

• Financial Controls

• Financial Analysis – evaluates profitability, viability, and stability through established metrics

• Budgeting – reports on budget variance reveals deviation between actual and planned financial performance

• Variance metrics (Four CSFs): Revenues, Expenses, Profits, Investments

• Audit – appraising the accuracy and reliability of the financial documents and the integrity of the organization’s financial activities.

• Internal Audit

• External Audit

TYPES OF CONTROL

BUSINESS FUNCTIONS

• Operational Controls – use of metrics for daily activities to improve performance

• HR Controls – view that one of the effective ways of controlling HR is with the use of metrics:

• Recruitment metrics – costs incurred, people involved, quality of new recruits, final number of recruits, success rate of each sourcing channel

• Training and Development metrics – job-impact indicators, benefit-to-cost ratio

• Attrition metrics – employee turnover rate, employee retention rate

• Welfare and compensation metrics – increase in productivity, level of employee satisfaction

POWER TO CONTROL

Measure of an individual’s potential to get others to do what he/she wants them to do

Extent of this power depends on how much the manager is able to harness from power sources

POWER TO CONTROL

KINDS

LEGITIMATE power-power that comes from the position

REWARD power-results from the subordinate’s perception that his manager will reward him if he follows

COERCIVE power-if he doesn’t follow the manager, he will be punished

EXPERT power-comes from the manager’s special and valued expertise from which subordinates can learn.

Organizational Structure and Design

Organizational Structure The skeleton of the organization

Shows who is performing the various functions and tasks of a company and how these people relate to one another

Organizational Structure

Organizational Design

Developing plans for how the organization should function or would perform better

6 KEY ELEMENTS

Work Specialization

Departmentalization

Chain of command

Span of control

Centralization and decentralization

Formalization

Purpose of Organizational Design

• Divides work to be done into specific jobs and departments.• Assigns tasks and responsibilities associated with individual

jobs.• Coordinates diverse organizational tasks.• Clusters jobs into units.• Establishes relationships among individuals, groups, and

departments.• Establishes formal lines of authority.• Allocates and deploys organizational resources.

Work Specialization

The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person.

Departmentalization Grouping of jobs

Departmentalization by Type

Functional Grouping jobs by functions performed

Product Grouping jobs by product line

Geographical Grouping jobs on the basis of territory or geography

Process Grouping jobs on the basis of product or customer flow

Customer Grouping jobs by type of customer and needs

Chain of Command

The continuous line of authority that extends from upper levels to the lowest levels of an organization

clarifies who reports to whom.

Span of Control

The number of employees who can be effectively and efficiently supervised by a manager.

Centralization and Decentralization

Centralization

The degree to which decision making is concentrated at upper levels in the organization.

Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders.

Decentralization

Organizations in which decision making is pushed down to the managers who are closest to the action.

Common Organizational Designs

Traditional Designs

Simple structure

Low departmentalization, wide spans of control, centralized authority, little formalization

Functional structure

Departmentalization by function

Operations, finance, marketing, human resources, and product research and development

Divisional structure

Composed of separate business units or divisions with limited autonomy under the coordination and control the parent corporation.

Common Organizational Designs

Contemporary Designs Team structures

The entire organization is made up of work groups or self-managed teams of empowered employees.

Matrix and project structures Specialists from different functional departments are assigned to work on projects

led by project managers.

Boundaryless Organization A flexible and unstructured organizational design that is intended to break down

external barriers between the organization and its customers and suppliers

Eliminates the chain of command Has limitless spans of control Uses empowered teams rather than departments

QUIZ

1. What is controlling?

A) the ability to manipulate

B) changing the circumstances

C) ensuring that objectives are achieved according to plan

D) to be in charge

QUIZ

2. Budgeting is what type of control?

A) Self- control

B) Financial Control

C) Operational Control

D) Essential Control

QUIZ

3. Which is a type of power that comes innately with position?

A) Innate Power

B) Legitimate Power

C) Expert Power

D) Coercive Power

QUIZ

4, It is the measure of potential to get others to do what he/she wants them to do

A) Controlling

B) Power to Control

C) Manipulation

D) Persuasion

QUIZ

5. Which is not a traditional organizational design/structure?

A) Team Structures

B) Simple structure

C) Functional structure

D) Divisional structure

Answers

1. C

2. B

3. B

4. B

5. A