3.1 Feedback and Control 3.2 More on Feedback 3.3 Financial and Non- Financial Controls 3.4 Control and Planning

Transcription

1 3. Controlling

2 3.1 Feedback and Control 3.2 More on Feedback 3.3 Financial and Non- Financial Controls 3.4 Control and Planning

3 3.1 Feedback and Control

4 Control - how we manage the execution of our plans and make sure we stay on target

5 Control needs a target (Goal) and a feedback loop

6 The Cars Stay In Their Lane Through Visual Feedback

7 Blindfold means no visual feedback Other children must give you verbal feedback - negative and positive

8 Plans provide the goals that are your target. Feedback gets you to them.

9 Lots of Different Control Tools Budgets Schedules Personnel Reviews Quality Control GPS Control spending Control timing Control performance Controls quality of processes Controls route to geographic destination

10 Budgets help control expenditure of resources - usually money. They tell you what you planned to spend.

11 Without control, you are not managing anything and goals are just dreams.

12 3.2 More on Feedback

13 Feedback can be complex. How much and what type can affect how we control outcomes

14 Positive feedback = Going in the right direction. Keep it up Negative feedback = Going in the wrong direction. Change course

15 A key choice in feedback is closeness of coupling - how much deviation before you react

16 Very close coupling can leave employees feeling distrusted and micromanaged

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18 Very loose coupling can let things get out of control and lead to disaster

19 Chernobyl - a failure of control

20 A 360 degree performance review collects feedback from supervisors, employees, and subordinates

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22 Budgetary Review The budget describes how much money you expect to spend each month. Are you over or under?

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24 Feedback is important in every aspect of management. Without it, you are not managing anything

25 3.3 Financial and Non-Financial Controls

26 Businesses control financial activities but all organizations control non-financial activities

27 Financial Controls Control/manage a firm s costs and expenses

28 Key Financial Control Tools Budgets Cash Flow Statements Balance sheets Control spending Monitor money in and out Provide a snapshot for current conditions Break-even analysis When have you paid off the initial investment and started making profits? Productivity Analysis How much of the inputs become useful outputs?

29 Break-Even Analysis When total revenue (Money in) = total costs (Money out), you have broken even on a decision

30 Break-Even Analysis When total revenue (Money in) = total costs (Money out), you have broken even on a decision

31 Productivity = Ratio of output to input. A basic measure of efficiency in any organization Productivity is a key goal for any organization

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33 Key Non-Financial Control Tools Quality Control Are you building the product in the right way? Performance reviews Are employees performing in the right ways? Customer Satisfaction Are you serving customers in the right way? Schedule Are you doing things at the right time? Waste Management Are you wasting resources that you could be using?

34 Quality control means adhering to a standard for output. Are you building things the way you should be?

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36 We use ratios to correct for the differences in absolute size. They help compare big things to little things.

37 3.4 Control and Planning

38 All the functions of management are related, but planning and control are the closest in the relationship

39 Planning sets the goals and control manages how we reach them.

40 Strategic Controls Broad strategic plans need controls that track broad outcomes, like market share or productivity

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42 Tactical Controls Short-term plans need flexible controls that track very specific things during short periods of time

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44 Productivity = Ratio of output to input. A basic measure of efficiency in any organization Productivity is a key goal for any organization

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46 If planning and control are not closely connected, planning is useless and control is not efficient