Place Slide Title Text Here JOHN R SCHERMERHORN

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Place Slide Title Text Here JOHN R. SCHERMERHORN, JR. MANAGEMENT 12 th Edition Chapter

Place Slide Title Text Here JOHN R. SCHERMERHORN, JR. MANAGEMENT 12 th Edition Chapter 9 Control Processes and Systems © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -

Place Slide Title Text Here 9 Study Questions Planning Ahead — Chapter 1. Why

Place Slide Title Text Here 9 Study Questions Planning Ahead — Chapter 1. Why and how do managers exercise control? 2. What are the steps in the control process? 3. What are the common control tools and techniques? © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -2

Place Slide Title Text Here Dashboard Chapter 9 Learning 1. Managerial Control 1. 2.

Place Slide Title Text Here Dashboard Chapter 9 Learning 1. Managerial Control 1. 2. 3. Importance of controlling Types of controls Internal and external control 2. The Control Process 1. 2. 3. 4. Establish objectives and standards Measure actual performance Compare results with objectives Take corrective action © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -3

Place Slide Title Text Here Dashboard Chapter 9 Learning 3. Control Tools and Techniques

Place Slide Title Text Here Dashboard Chapter 9 Learning 3. Control Tools and Techniques 1. 2. 3. 4. 5. Project management and control Inventory control Breakeven analysis Financial controls Balanced scorecards © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -4

Place Slide Title Text Here Takeaway 1: Managerial Control • Controlling – The process

Place Slide Title Text Here Takeaway 1: Managerial Control • Controlling – The process of measuring performance and taking action to ensure desired results – Has a positive and necessary role in the management process – Ensures that the right things happen, in the right way, at the right time – Benefit: Organizational learning (Example: After-action review) © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -5

Place Slide Title Text Here Figure 9. 1 The role of controlling in the

Place Slide Title Text Here Figure 9. 1 The role of controlling in the management process © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -6

Place Slide Title Text Here Takeaway 1: Managerial Control • Feedforward controls – Employed

Place Slide Title Text Here Takeaway 1: Managerial Control • Feedforward controls – Employed before a work activity begins – Ensures that: • Objectives are clear • Proper directions are established • Right resources are available – Goal is to solve problems before they occur © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -7

Place Slide Title Text Here Takeaway 1: Managerial Control • Concurrent controls – Focus

Place Slide Title Text Here Takeaway 1: Managerial Control • Concurrent controls – Focus on what happens during work process – Monitor ongoing operations to make sure they are being done according to plan – Goal is to solve problems as they occur © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -8

Place Slide Title Text Here Takeaway 1: Managerial Control • Feedback controls – Take

Place Slide Title Text Here Takeaway 1: Managerial Control • Feedback controls – Take place after work is completed – Focus on quality of end results – Goal is to solve problems after they occur and prevent future ones © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -9

Place Slide Title Text Here Figure 9. 2 Feedforward, concurrent, and feedback controls. ©

Place Slide Title Text Here Figure 9. 2 Feedforward, concurrent, and feedback controls. © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -10

Place Slide Title Text Here Takeaway 1: Managerial Control • Internal and external control

Place Slide Title Text Here Takeaway 1: Managerial Control • Internal and external control – Internal control • Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations – External control • Occurs through personal supervision and the use of formal administrative systems © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -11

Place Slide Title Text Here Takeaway 1: Managerial Control • Self-control – Internal control

Place Slide Title Text Here Takeaway 1: Managerial Control • Self-control – Internal control that occurs through selfdiscipline in fulfilling work and personal goals and responsibilities © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -12

Place Slide Title Text Here Takeaway 1: Managerial Control • Bureaucratic control – Influences

Place Slide Title Text Here Takeaway 1: Managerial Control • Bureaucratic control – Influences behavior through authority, policies, procedures, job descriptions, budgets, and day-to -day supervision • Clan control – Influences behavior through norms and expectations set by the organizational culture © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -13

Place Slide Title Text Here Takeaway 1: Managerial Control • Market Control – Influence

Place Slide Title Text Here Takeaway 1: Managerial Control • Market Control – Influence of market competition on the behavior of organizations and their members © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -14

Place Slide Title Text Here Figure 9. 3 Four steps in the control process

Place Slide Title Text Here Figure 9. 3 Four steps in the control process © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -15

Place Slide Title Text Here Takeaway 2: The Control Process • Step 1 —

Place Slide Title Text Here Takeaway 2: The Control Process • Step 1 — establishing objectives and standards – Output standards • Measure performance results in terms of quantity, quality, cost, or time – Input standards • Measure effort in terms of amount of work expended in task performance © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -16

Place Slide Title Text Here Takeaway 2: The Control Process • Step 2 —

Place Slide Title Text Here Takeaway 2: The Control Process • Step 2 — measuring actual performance – Goal is accurate measurement of actual performance results and/or performance efforts – Must identify significant differences between actual results and original plan – Effective control requires measurement © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -17

Place Slide Title Text Here Takeaway 2: The Control Process • Step 3 —

Place Slide Title Text Here Takeaway 2: The Control Process • Step 3 — comparing results with objectives and standards – Need for action = Desired Performance – Actual Performance – Comparison methods: • Historical comparison • Relative comparison • Engineering comparison © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -18

Place Slide Title Text Here Takeaway 2: The Control Process • Step 4 —

Place Slide Title Text Here Takeaway 2: The Control Process • Step 4 — taking corrective action – Taking action when a discrepancy exists between desired and actual performance – Management by exception • Giving attention to situations showing the greatest need for action • Types of exceptions – Problem situation – Opportunity situation © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -19

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Project Management

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Project Management – Overall planning, supervision, and control of projects • Projects – unique one-time events that occur within a defined time period • Gantt chart – graphic display of scheduled tasks required to complete a project • CPM/PERT – combination of the critical path method and program evaluation and review technique © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -20

Place Slide. Takeaway Title Text Here 3: Gantt Chart © 2013 John Wiley &

Place Slide. Takeaway Title Text Here 3: Gantt Chart © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -21

Place Slide Title Text Takeaway 3: Here CPM/PERT Chart © 2013 John Wiley &

Place Slide Title Text Takeaway 3: Here CPM/PERT Chart © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -22

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Inventory control

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Inventory control – Ensures that inventory is only big enough to meet immediate needs – Economic order quantity • Places new orders when inventory levels fall to predetermined points – Just-in-time scheduling • Routes materials to workstations just in time for use © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -23

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Breakeven analysis

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Breakeven analysis – Breakeven point • Occurs where revenues just equal costs – Breakeven analysis • Performs what-if calculations under different revenue and cost conditions © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -24

Place Slide Title Text Here Figure 9. 4 Use of breakeven analysis to make

Place Slide Title Text Here Figure 9. 4 Use of breakeven analysis to make informed “what-if” decisions © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -25

Place Slide Title Text Here Figure 9. 5 Basic foundations of a balance sheet

Place Slide Title Text Here Figure 9. 5 Basic foundations of a balance sheet and income statement © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -26

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Basic Financial

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Basic Financial Ratios – Liquidity • The ability to generate cash to pay bills – Leverage • The ability to earn more in returns than the cost of debt – Asset management • The ability to use resources efficiently and operate at minimum cost – Profitability • The ability to earn revenues greater than costs © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -27

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Balanced Scorecard

Place Slide Title Text Here Takeaway 3: Control Tools and Techniques • Balanced Scorecard • Factors used to develop scorecard goals and measures: – Financial performance – Customer Satisfaction – Internal process improvement – Innovation and learning © 2013 John Wiley & Sons, Inc. All rights reserved. 9 -28