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CONTROLLING
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AREAS OF CONTROL
Two perspectives
1. Resource Focus
2. Level of focus
. Resource focus can be control over
. Physical resources
. Financial resources
. Information resources
. Human resources
. Implemented through quality control, inventory
control, employee recruitment performance
appraisal, budgets.
AREAS OF CONTROL
Level of focus:
strategic control
Operations control
ORGANIZATIONAL CONTROL
Bureaucratic control: characterized by formal mechanistic
arrangements
Clan control : informal organic arrangements
ORGANIZATIONAL CONTROL
Strategic control:
Directed at ensuring that the organization is in effective alignment
with the external environment and that the organization is
progressing towards strategic goals.
To exercise effective control ,a manager continually need to reflect
on strategic questions regarding managerial styles , culture
structure appraisal systems
Quality circles:
A quality circle is a small group of workers who meet voluntarily
once a week or two ,to identify, analyze and resolve problems in
the work area .
Creates greater employee satisfaction and improved performance
and productivity
BUDGET CONTROL
Budgeting may be defined as the process of
expressing a set of planned activities for a future
time period in numeric terms .
Budgets serve four purposes primarily :
1. Provide clear guidelines about organizational
resources and expectations for their use
2. To help coordinate projects and resources
3. To help define control systems standards
4. To help evaluate the performance of managers
and work units
BUDGET CONTROL
Types of budgets
1. Financial Budgets:
Is used to show where the organization expects to get cash
for the coming period and how that cash is to be used.
. Cash budgets an estimate of the cash flow on the daily or
weekly basis and is designed to ensure that the organization
will always have sufficient cash to meet its obligations.
. Capital expenditure budgets - represents a plan for future
investments in major capital assets
. Balance sheet budget/master budget : sets the amount of
assets and liabilities for the end of the planning period. It
serves as an overall control device to ensure that all budgets
integrate properly and yield profitable results.
BUDGET CONTROL
Operating budgets :
Is an expression of an organizations planned operations.
Expressed in terms of products and services to be sold and the
resources needed to produce and sell them
Sales budget : identifies the sales/ revenues required by the
organization and represents the firms expected income .
Sales forecast helps establish the prices.
Expense Budget :
Defines the anticipated expenses of the organization for the
period.
Fixed cost budgets
Variable cost budgets
Discretionary cost budgets
BUDGET CONTROL
Non-monetary budgets :
not financial in nature
expressed in terms of machine hours , units of
output and man-hours .