Lecture Management: Leading and collaborating in a competitive world - Chapter 16: Managerial control

Learning objectives in this chapter: Explain why companies develop control systems for employees, summarize how to design a basic bureaucratic control system, describe the purposes for using budgets as a control device, define basic types of financial statements and financial ratios used as controls, list procedures for implementing effective control systems

Managerial

Control

Chapter

Sixteen

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Learning Objectives

LO 1 Explain why companies develop control systems

for employees.

LO 2 Summarize how to design a basic bureaucratic

control system.

LO 3 Describe the purposes for using budgets as a

control device.

LO 4 Define basic types of financial statements and

financial ratios used as controls.

LO 5 List procedures for implementing effective control

systems.

LO 6 Identify ways in which organizations use market

Managerial Control

 Control

individuals toward the achievement of organizational goals

16-3

Characteristics of Control

Table 16.2

The Control Process

16-5 Figure 16.1

After-action review

 After-action review

basic questions aimed at continuous

improvement

Approaches to Bureaucratic Control

 Feedforward control

begin, including policies, procedures, and rules designed to ensure that planned

activities are carried out properly

16-7

Management Audits

 Management

audit

the effectiveness

and efficiency of

various systems

within an

organization

Budgetary Controls

 Budgeting

done and comparing the results with the corresponding budget data to verify

accomplishments or remedy differences

16-9

A Sales-Expense Budget

Table 16.4

Activity-Based Costing

 Activity-based costing (ABC)

identify streams of activity and then to allocate costs across particular business processes

according to the amount of time employees

devote to particular activities

16-11

Activity-Based Costing Example: ABC Medical Clinic

Figure 16.3

The Profit and Loss Statement

 Profit and loss

statement

financial statement

of the income and

expenses of a

company’s

operations

16-13 Table 16.6

Using Financial Ratios

 Management

myopia

short-term earnings and

profits at the

expense of

longer-term strategic

obligations

Examples of Market Control

16-15 Figure 16.4