Lesson 12:

Controlling
the
Organization
 Controlling
-Major management function that
contributes to the achievement of
organizational goals by checking
errors and addressing deviations
from established performance
standards.
Controlling
-Is an ongoing process that
involves members at all levels
of the organization.
-Also considered an end
function and it is also a
dynamic process.
Controlling

Constant monitoring
is vital component of
the control process.
 Control Function
– it is the responsibility of everyone, thus
employees are expected to address
problems even if these are not within his or
her area of responsibility.
Anticipatory
Retrospective
 Corrective actions should be
quantifiable, measurable and relevant
to the situation being addressed.
Collaboration is vital in all
management functions.
 Control Process Main Steps
•1. Establishment of Standards. Develop
criteria by which performance will be
measured. Standards can be quantitative or
expressed in terms of non-measurable
elements.
Time Standards Cost Standards Income Standards
2. Measure of Performance. Performance is
measured by identifying strategic control
points.
3. Comparison of the Actual Performance
with the Standards. The company can also
conduct benchmarking by comparing their
performance with exemplary practices from
other companies.
 4. Tasking Corrective Actions and
Realigning Processes when
necessary. Deviations from the
standards may be a result of incorrect
planning, a lack of coordination in the
conduct of tasks or the
misinterpretation of instructions.
The Link between
Planning
and
Controlling
 4. Correct deviations
and return to no. 2; or
improve future plans 1. Do the plans
by going back to no.
1.

3. Monitor and 2. Carry out the plans

compare actual through strategies
performance formulated.
Control Methods
and
Systems
Before During After

Inputs Processes Outputs

Feedforward Concurrent Feedback

Control Control Control
1. Feedforward Control – anticipates the
occurrence of possible problems so that
preventive measures can be implemented
before the actual operation.
2. Concurrent Control – implemented
while the activity is in progress.
3. Feedback Control –done after the
activity.
 Control methods and system in
monitoring and controlling the general
conduct of company operations:

1. Administrative Control
entails establishing procedures and policies
that ensure efficiency in the activity of the
company.
utilizes documentation to ensure complete
and consistent information.
2. Delegation
assigning an employee to take responsibility
in completing the task.
3. Evaluation
involves the collection of analysis of
information in order to make decisions
 • enables the company to identify aspects of
operations and tasks that need revision

4. Financial Reports
 provides information on how money is
spent
 how profits are maximized by the
company.
Financial ratios used to monitor the
company’s overall financial
performance.
Common financial ratios:
a. Liquidity ratio
b. Leverage ratio
c. Activity ratio
d. Profitability ratio
5. Performance appraisal – this provides general
impression of employee performance.
Tools and methods to appraise the performance of
employees
- Intuitive approach
- Self-appraisal approach
- Trait approach
- Achievement-based approach
- Group approach
6. Policies and Procedures
ensure the employees carry out
tasks in an effective and
efficient fashion and that
directives and instructions are
consistent.
7. Quality Control – defined by the
International Organization for
Standardization (ISO) as “the operational
techniques and activities that are used to
satisfy quality requirements.” An essential
component of quality control is quality
assessment.
The five Ws are as follows:
1. What error was made?
2. Where was it made?
3. When was it made?
4. Who made it?
5. Why was it made?
 Management Control
Application
Control is applied to many
functional areas in the business
organization particularly in
accounting and marketing.
 Management Control Application
The accounting department provides financial
information that can help determine the
financial stability of the organization.
The marketing department meanwhile,
provides data on the company’s sale
performance.
Account or Financial Control
 Three Main Types of Financial
Statements

 Balance Sheet
The balance sheet provides a summary
of the company’s financial position over
period of time.
The three major parts of a balance sheet are
the following:
1. Assets are things or resources that the
company owns.
a) Current Assets
b) Property, plant, and equipment
c) Intangible assets
 Account receivables refer to the sale
of goods or services that are not yet
collected, or sales still on credit.
Inventory inclues the cost of raw
materials, work-in-process, and finished
goods.
2. Liabilities are the obligations of the
company to creditors for past transactions
such as acquisitions of raw materials and
other’s debts.
Current Liabilities are usually due
within one year while long-term liabilities
have a prescribed period of more than a
year.
a. Notes payable – it is the amount of
loans due based on a written
agreement or promise to pay.
b. Accounts payable – it refers to the
obligations of the company to
suppliers without a written promissory
note and are classified as current
liability.
c. SSS\Philhealth payable – this is a
current liability that is specific to
the Philippines.
d. Income taxes payable – it shows
the amount the company should
remit as taxes to the government.
3. Owner’s equity or stockholder’s equity
shows the amount of capital the
owners of the business have invested.

a) Common stock – represents

ownership of the corporation.
b) Preferred stock – this is a special class
of stock whose holders are given
preference in the distribution of
dividends before the common
stockholders.
c) Retained earnings – this is the net
income of the corporation less dividends.
Income Statement
The income statement reports profits earned or losses
incurred by the company over a given period.
1. Revenue – income from primary activities
Sales Revenue refers to revenue from gained
from the sale of goods by retailers, distributors,
manufacturers, and wholesalers.
Other Revenue comes from secondary
activities unrelated to the main business
2. Expenses – costs incurred in the operation of the
business
3. Net Income – lists the revenue and expenses incurred by
the company, and total expenses is subtracted from the total
revenues.
profit indicates that expenses are less than the income
or total revenue at a given period.
loss; if the expenses are greater than the revenue

Revenues – Expenses = Net Income

 MARKETING CONTROLS
- control is also applicable in the
marketing function since setting
performance standards is an important
part of developing marketing
objectives.
 Four Types of Marketing
Controls
1. Strategic control
this refers to processes implemented to
control the formulation and execution of
strategic plans.
a. Marketing Effectiveness
this evaluates the extent and the
quality of customer relations, how the
marketing function is integrated with
the other functions of the organization,
and how well marketing activities and
functions are coordinated.
b. Marketing Audit
this is detailed and
systematic analysis of past
and present marketing
activities of the
organization.
2. Annual Plan Control – uses annual marketing
targets as performance standards to determine
whether planned results or outcomes were
achieved.
a. Sales Analysis – analyzing a company's sales
data to determine trends and changes in sales
figures and identify any discrepancy or variance
in performance.
b. Market Share Analysis
this determines the overall standing of
the company against its competitors.
c. Marketing Expenses to Sales Ratio
this entails comparing marketing
expenses with the achieved sales of
the company.
3. Customer Tracking
determine customer behavior and
their reactions to marketing activities.
4. Profit Control
profitability of company activities and
identifies where the company is
making or losing money.
5. Efficiency Control
this keeps track of the efficiency of
the marketing expenditures such
as sales force, advertising, sale
promotion, and distribution.
 BUDGETING
Budgets are quantitative expressions of
plans set by the management for a specific
period. Budgeting is a planning tool used to
translate in quantitative terms all the plans
of the company.
Budget Plan
a budget plan is essential to the
realization of the plans of the
organization. A budget plan consists
of two parts:
• Direct Costs
• Indirect Costs
1. Operational Costs – direct costs of
doing the actual work, activity, or
project.
2. Organizational Costs – indirect
costs that refer to activities that
support operational plans
3. Staffing Costs
these are also called labor costs and refer to the
wages or salaries of the people who perform
the actual work.
4. Capital Costs
these are fixed, one item costs for large
investments such as heavy equipment,
facilities, land, and buildings.
 Lesson 13:
Functional
Areas of
Management
Functional Areas
of
Management
Technical or Functional
General Managerial Competence

People who have general managerial

competence prefer to solve problems, make
decisions, or influence and lead others. These
people will only feel satisfied once they get
promoted to a general manager position.
 Autonomy or Independence People
• who value autonomy have a sense of
Independence and work based on their own
rules.
• resist organizational routines such as dress
codes, policies, and uniforms.
• they want to exert control over their work life.
Security and stability People
who value security and stability
ultimately desire and secure job

Entrepreneurial Creativity People

with entrepreneurial creativity will only
feel accomplished if their creative efforts are
successful in starting up a business
Entrepreneurial Creativity People
they consider profits as important, these
people believe that money is secondary to the
reward and recognition of starting something
new and innovative.

Service and Dedication to a Cause

There are people who dedicate their service to a
cause.
Service and Dedication to a Cause

They believe that uplifting the lives of others

is much more important than self-
improvement. Some professions in line with
this career anchor are preachers, social
workers, doctors, nurses, lawyer and
teachers.
Pure Challenge People
who prefer pure challenge are very
competitive. The kind of work they do is
only secondary to the satisfaction that they
get out of beating other competitors in
tough situations. Any job is suitable for
these individuals as long as they feel that it
is a challenge.
Lifestyle
There are people who prefer to balance
between family and career. They value their
career as much as their personal life and
would prefer flexibility in work schedules
by working for organizations which value
the importance of this perspective.
Human Resource Management
• supervisor, manager, department
head, directors, and vice president.
• human resources are not managed
properly, they can adversely affect the
utilization of material resources
HR MANAGER
Outline the different positions from top
management to the people in the lowest
level of the organization. HR manager
recruit, conduct interviews, and manage
benefits based on company policies. They
see to it that employee potentials and
abilities are utilized to the fullest and that
their work satisfaction remains high.
RECRUITMENT MANAGER
• responsible for the screening, hiring, and
placement of candidates in suitable
position in the organization
• continuously search for qualified
applicants to fill vacant positions by
employing various means to find and
acquire people who can be an asset to
the organization.
 Job Analysts
 define and classify job position and ensure
access to information on each job and
position in the organization
 Compensation and Benefits Managers
 develop salary structures, analyze prevailing
salary rate in the market, and classify
benefits based on job position, levels, and
length of service
TRAINING AND DEVELOPMENT MANAGERS
Enhance and improve the skills of the
employees through the implementation of
appropriate training programs. These
programs not only focus on the skill related
to job performance, but also help employees
in their total growth as a person.
 Training Specialist meanwhile, develop
modules, prepare lessons, invite speakers,
and conduct training needs analysis in order
to create appropriate training programs for
employees
EMPLOYEE RELATIONS MANAGERS
• Take charge of formulating policies, creating
employee handbooks and manuals, coordinating
with labor groups, managing employee complaints
and concerns, and dealing with employee violations.
• also handle dispute and conflict settlements among
employees
Marketing Management
• overseeing the development of new products,
advertisements, promotions, and sales.

Marketing Director
• tasked with managing the overall marketing
operations of the organization. Extensive
knowledge in advertising, finance and planning
are crucial in this position.
Marketing Managers (product managers or band
managers)
• tasked with developing strategies for the brand by
analyzing the demand for the or service
• monitor the activities and strategies of competitors
and formulate strategies to maintain awareness of
and demand for the brand.
• identify potential markets, distributors, and
competitors.
• managers also deal with customers, distributors, and
government agencies in the course of their work
Public Relations Managers
• Take charge of promoting the company or
organization to the public and enhancing its
corporate image.

Account Executives
• manage client accounts or departments and
prepare commercials and advertisements for them.
They coordinate with:
 Advertising  Promotion
Managers managers
 Creative Director  Promotion
 Media Director Specialist
 Sales Manager
 Sales
Representatives
Operation Management
• Focuses on designing and controlling production
and business operations related to production

Production Manager
• Deal with resource and service require in
manufacturing or production
• Manage qualify specifications, inventory control and
coordinate production tasks the other department in
the organization
Production Scheduling
• ensure a smooth flow of activities.
Production Supervisors
• are assigned to specific parts of the
assembly line or production area
• oversee production operators who do
the actual production work.
 Financial Management
Finance
• the lifeblood of business
• the art and science of managing money
• procurement and effective utilization of company
funds.
Finance Manager
• supervises all finance operations
• raises funds, invest in assets and manage them
effectively.
Chief Financial Officer (CFO)
• head of the finance department in
large companies
• reports directly to the president or
chief executive officer (CEO).
Treasurer
mostly involved in major areas of
financial
Controller
is tasked with preparing financial
reports
Finance managers make important decisions in the
ff areas:
1. Investment decision – determine how much of
the total assets should be held or utilized by the
firm and how these will be used by the
company.
2. Financing decision – decide what type of
financing should be availed of the company.
Finance managers make important
decisions in the ff. areas:
3. Asset management decision – the
company must effectively manage the
resulting finances.
•Credit managers
•Cash managers
Finance managers
• are employed by banks, credit
companies and other financial
institutions to supervise
lending, mortgages, investment
and other financial activities.
Materials and Procurement Management

Procurement is the act of purchasing or

acquiring goods and services for company use.
Purchasing department is in charged with the
acquisition of materials and resources for the
different departmets in the organization.
Procurement Management
is to determine the sources of materials and identify
and implement processes that will enable the
company to acquire these resources.
Purchasing Managers or Procurement Managers
supervise the procurement process of the company.
Buyers or Purchasing Officers, acquire specific products
and services required by the company
Officers in purchasing equipment and machines should know technical aspects.
Officers in government offices should ensure that proper procedures are observed.

Wholesale Buyer is a type of buyer who purchases

merchandise for resale to retailers and other firms.
Competitive Bidding a process where prospective
suppliers submit their bids which indicate to provide
products and services to company at certain prices.
The bidding process is implemented to ensure transparency and
allow the company to purchase quality materials at the lowest
price
OFFICE MANAGEMENT
• involves the proper handling and maintenance
of the clerical aspects of all the functional
departments of the organization, as well as the
facilitation of proper communication,
coordination and storage of data.
• Also involves payroll, records,
telecommunications and parking management.
• Administrative managers or office mangers perform
diverse tasks in the conduct of office management
but mostly concentrate on monitoring and
reviewing office operations to determine the best
work processes.
• Middle officers or supervisors perform a number
of roles related to office management, such as
coordinating with support services and efficiency is
maintained in their respective department by
formulating appropriate strategies.
Information and Communication Technology
Management
Information technology – refers to the application of
computer and telecommunication technology to store,
manager and transmit data in businesses and other
organizations.
Information systems – are organized systems or networks
that collect, store and disseminate information required to
support key organizational functions.
•Collected data are processed by the
systems through three basic activities:
input, processing and output.
•Information systems are now an
indispensable tool in conducting
business.
•Information technology supports
several functional areas of a firm.
Business organizations also employ a
variety of information systems in the
conduct of their operations.

1. Sales and marketing information system

2. Finance and accounting information
system
3. Human resource system
Information system manager
• take charge of establishing an information
system, managing its component and
programs.
Enterprise system
• which integrates the key business processes
of an organization into a central repository
• kind of information system software
implemented in business organizations.