What is
Controlling?
Group 4
Controlling
Controlling involves monitoring, evaluating,
and adjusting organizational activities to
ensure goals are achieved.
It includes setting standards, measuring
performance, and implementing corrective
actions when necessary.
CONTROLLING 2
Nature of Controlling
• It is present and required in all levels of management
and by all executives to control the activities.
• Controlling is a goal-oriented function of management
• Controlling is a continuous process.
• Control is closely linked with planning
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The link between planning and
controlling
-As one plans, the elements of control
immediately take place to consider how
every turnout of the plan may be
evaluated and rectified.
-To put it simply, planning creates the
route map, and controlling, through
feedback and required adjustments,
makes sure the journey doesn't veer off
course. They are complementary actions
that enhance an organization's overall
performance and efficacy.
Control methods
and system
-Control methods are techniques used for
measuring an organization's
financial stability, efficiency, effectiveness, production output, and
organization members' attitudes and morale.
From the general point of view, managerial
effectiveness must be concerned with the
maximizing of the abovementioned factors
that are measured by the control methods
Methods of control
A. Quantitative method
Quantitative methods make use of data and different
quantitative tools for monitoring and controlling
production output.
• Budgets
-A budget is an instrument of planning, management,
and control.
•Audit
-Auditing involves the independent review and
evaluation of the organization's non-tactical operations
such as accounting and finances. As amanagement tool,
the audit measures and evaluates the effectiveness of
management controls. 6
Methods of control
B. Non Quantitative method
It refers to the overall control of performance
instead of only those of specific organizational
processes. These methods use tools such as
inspections, reports, direct supervision, and on-
the-spot checking and performance evaluation or
counseling to accomplish goals.
Other control methods
include the following:
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• Feed forward control- prevents problems because the managerial action is
taken before the actual problem occurs.
• Concurrent control- takes place while work activity is happening. It is
disadvantageous because by the time the manager receives the information,
the problem had already occurred and waste or damage had already resulted.
• Employee discipline - is a control challenge for managers. Enforcing discipline in
the workplace is not easy. Concerns regarding this include workplace privacy,
employee theft, and workplace violence, among others.
• Project management control- ensures that the task of getting a project's activities
done on time, within the budget.
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Application of
Management Control in
Accounting and Marketing
Concepts and Techniques
10
Application of control in accounting
control in accounting and finance is the control that makes use of the balance sheet,
income statement, and cash flow statement to analyze and examine financial
statements in order to determine the company's financial soundness and viability, as well
as financial ratios to determine the company's stability.
Application of control in marketing
management control in marketing is the control that makes use of projected sales or
forecasts, statistical models, econometric modeling, surveys, historical demand data,
and actual consumption of their products.
The goal of businesses is to gain profit. In order to achieve this, managers need
accounting/financial controls. Managers must also analyze the organization's financial
condition; done with the help of the following financial ratios.
PRESENTATION TITLE 11
Five(5) types of
Financial Ratios
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Liquidity ratio
– Tests the organization's ability to meet short-term
obligations; it may also refer to acid tests done when
inventories turn over slowly or are difficult to sell
Current ratio = current assets ÷ current liabilities
Leverage ratio
– Determines if the organization is technically insolvent,
meaning that the organization’s financing is mainly
coming from borrowed money or from the owner’s
investments
Debt-to-assets ratio = total debt ÷ total assets
Activity Ratio
– Determines if the organization is carrying more
inventory than what it needs; the higher the ratio, the
more efficiently inventory assets are being used
Inventory turnover= cost goods sold ÷ average inventory
Profitability ratio
– determines the profits that are being generated;
Net profit taxes ÷ total sales
Or measures the efficiency of assets to generate profit
Return on investment = net profit taxes ÷ total assets
Asset management
- Asset management is the ability to use resources
efficiently and operate at minimum cost.
Inventory turnover = sales ÷ average inventory
Benchmarking
-Is an approach or process of
measuring a company's own services
and practices against those of
recognized leaders in the industry in
order to identify areas
for improvement. It is a widely used
and well-accepted approach because
it helps organizations gather data and
information against which
performance can be measured and
controlled.
Three (3) types of
Benchmarking
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Strategic Benchmarking
“compares various strategies and
identifies
the key strategic elements of success;”
Operational Benchmarking
"compares relative costs or possibilities
for product differentiation;”
Management Benchmarking
“focuses on support functions such as
market planning and information
systems, logistics, and human resource
Budget
An organization's ability to have a good control system is also
dependent on its budget process. Budgets are plans to
monitor, control, and implement the resource of the firm on
its operation based on its objectives or goals. Adjustments are
made by top-level management on a periodic basis.
PRESENTATION TITLE 18
There are many kinds of budget so here are
some examples
Examples of budget :
Example of budget in planning
a seminar
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QUIZ
TIME
Direction: Draw the following and answer the questions to
get the answers in the crossword .
20
Down
1.involves monitoring, evaluating, and adjusting organizational activities to ensure goals are
achieved.
2. involves the independent review and evaluation of the organization's non-tactical operations
such as accounting and finances.
4. makes use of the balance sheet, income statement, and cash flow statement to analyze and
examine financial statements in order to determine the company's financial soundness and
viability
Across
3. A type of control that takes place while work activity is happening.
5. makes use of projected sales or forecasts, statistical models, econometric modeling,
surveys, historical demand data, and actual consumption of their products.
6. a type of benchmarking that compares various strategies and identifies the key
strategic elements of success.
7. instrument of planning, management, and control
20
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