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Foundations Of Controlling

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Outline Define Controlling & its importance . Controlling Process Stages … Controlling Types & when does it take place

….. The Objectives Of Controlling…. The Impact Of Controlling……. Tools For Measuring Organizational

performance.. Effective Controlling requirements….. Controlling Examples….

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Control : * A process of monitoring performance and taking action to ensure desired results . * Has a positive and necessary role in management process .

Importance : * Changes the environment of an organization *Reduces the complexity of the activities . *Solving the mistakes occurred by the members . *Empowering employees and protecting the workplace .

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Controlling Process Stages:

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Controlling Types and when does it take places:

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Controlling Objectives:

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Impact of Controlling on organizational performance:

Measuring how appropriate organizational goals are and how well the organization is achieving its goals. Systems resource model

The ability of the organization to exploit its environment in acquiring scarce and valued resources

The process model The efficiency of an organization’s transformation

process in converting inputs to outputs The multiple constituencies model

The effectiveness of the organization in meeting each constituencies’ needs

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The output of controlling of An Organization:

ProfitsReturn on revenue Return on shareholders’ equityGrowth in profitsRevenues per employeeRevenues per dollar of assetsRevenues per dollar of equity

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Tools for measuring organizational performance:

Feed Forward Control: Control that takes place before a work

activity is done. Concurrent Control: Control that takes place while a work

activity is in progress. Management by Walking Around: A term used to describe when a manager

is out in the work area. Feedback Control: Control that takes place after a work

activity is done.

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Balanced Scorecard: A performance measurement tool

that examines more than just the financial perspective which measures a company’s performance in four areas..

FinancialCustomerInternal Processes People /Innovation/Growth/Assets

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Management Information Systems (MIS): A system used to provide management with

needed information on a regular basis.Benchmarking: The search for the best practices among

competitors or non-competitors that lead to their superior performance.

Cross-Cultural Issues:The use of technology to increase direct corporate control of

local operationsLegal constraints on corrective actions in foreign countriesDifficulty with the comparability of data collected from

operations in different countries

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Other measurement scales of Controlling:

Economic Value Added (EVA): How much value is created by what a

company does with its assets, less any capital investments in those assets: the rate of return earned over and above the cost of capital.

Market Value Added (MVA): The value that the stock market places

on a firm’s past and expected capital investment projects

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Effective Controlling Requirements:

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Examples of Controlling:

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