LESSON 4: FINAL TERM AY: 2023 - 2024
LESSON
OBJECTIVES
• Know the nature of controlling
• Describe the link between planning and
controlling.
• Distinguish control methods and systems
• Apply management control in accounting
and marketing concepts and techniques
• Prepare a budget plan
CONTROLLING
Control - knowing what is
actually happening in
comparison to set standards
or objectives and then making
necessary corrections.
CONTROLLING
managerial activity for
ensuring the achievement of
an organization’s objective
WHY PRACTICE MANAGEMENT
CONTROL?
• Prevent crises - if a manager does not know what is going on, it is easy for
small, readily solvable problems to turn into crises.
• Standardized outputs - Problems and services can be standardized in
terms of quantity and quality through the use of good controls.
• Appraise employee performance - Proper controls can provide the
manager with objective information about employee performance.
• Update plans - Even the best plans must be updated as changes may
occur.
• Protect the organization’s assets - Control can protect assets from
inefficiency, waste and pilferage.
THE CONTROL Correcting deviations
PROCESS or straightening up
what is crooked.
Comparing actual
performance against
standards.
Establishing standards
against which
performance can be
measured.
THE LINK BETWEEN PLANNING
AND CONTROLLING
Where
are we How can
Planning occurs before action is taken
now? we get
while controlling takes place after
from planning is completed and the
What do here? organizational activities begin.
we want
to be?
BEHAVIOR OR PERSONAL
CONTROL
• Based on direct, personal surveillance.
TYPES OF Ex. the first-line supervisor who maintains a close
personal watch over employees is using behavior
control.
CONTROL OUTPUT OR IMPERSONAL
CONTROL
• Based on the measurement of outputs.
Ex. Tracking production records
PRELIMINARY CONTROL
• called steering control and feed-forward
control. It identifies major problems before
they occur.
METHODS CONCURRENT CONTROL
OF
• called screening control. It monitors the
operation in progress
CONTROL POST-ACTION CONTROL
• designed to detect existing problems after
they occur but before they reach crisis
proportions.
APPLICATION OF
MANAGEMENT CONTROL IN
ACCOUNTING AND
MARKETING CONCEPTS AND
TECHNIQUES
CLASSIFICATION OF
CONTROL TECHNIQUES
Overall
Traditional Specialize
Perfomance
d
CLASSIFICATION OF CONTROL TECHNIQUES Budgetary Control
• Refers to managing income and
expenditures.
• Regularly comparing actual income or
Traditional expenditure to planned income or
expenditure to identify whether or not
corrective action is required
Control Break-Even Point Analysis
Techniques • Total income = total cost
• Level of activity when profit or loss is
made.
• The manager analyzes the break ene
point and determines the steps to be
taken
CLASSIFICATION OF CONTROL TECHNIQUES Gantt Chart Technique
Specialized
Control Network Analysis
Techniques • Used to control a complex project that
requires analysis of various activities
and events.
• The chart enables interrelated activities
and critical paths to be observed.
CLASSIFICATION OF CONTROL TECHNIQUES Income Statement
complied at the end of
accounting period that
calculates net profit or loss
Controlling from business operations
Overall
Return on Investment
Performance (ROI)
• shows how good and fast the business
achieve an optimum rate of return
CLASSIFICATION OF CONTROL TECHNIQUES Key Control Area
includes quantity, quality,
time, and cost with profit as
Controlling the criterion for success
Overall
Audits
Performance • Internal Audit - conducted by internal auditors
• External Audit - conducted by external auditors
that were not part of the organization
• Managerial Audit - periodic assessment of
managerial performance done by internal or
external auditors
Control
Strategies
Market Control - managerial approach that
relies on market mechanism to regulate
prices for certain clearly spcicified goods and
reasonable level of competition in the goods
or service are and it must be possible to
specify requirements clearly.
Control
Strategies
Bureaucratic Control - Relies on regulations
through policies, supervision, budgets,
schedules, reward system, and other
administrative mechanisms. Useful for
keeping recurring activities.
Control
Strategies
Clan Control - relies on values, beliefs,
traditions, corporate culture, shared norms
and informal relations to regulate employee
behaviors and facilitate the reaching of
organizational goal.
Role of Budgets in Planning and
Control
Budget - formal document that states the monetary
capacity of a firm to plan, control, and allocate its
resources accordingly.
Budget and Its Role in Planning
Finding the leverage of the firm that the budget helps
one to do. Accordingly, one can take the respective
loans in order to complete a project.
Budget and Its Role in Controlling
There have been mny areas where corrective actions
have to be taken so as to put projects back on track.
This is where the role of budgetting in controlling
takes place.
Create a Budget Plan that
Actually Works: 3 Steps to Take
• Base your income and expenses on reality.
• Choose a customized plan:
2.1. the 50/30/20 rule (essential epenses, unnecessary expenses
and future goals
2.2. the fixed and variable expenses budget - lower the payment of
fixed expenses, and cut out entertainment fall under discretionary
spending
2.3 the bare bonus budget - based on lowest possible monthly
income
3. Find a method to track your budget.
THANK YOU
