CONTROL
B A 1 O 1
BONGAS, Kennice Angela
CARAIG, Johanne Erica
INOCENCIO, Isaiah Kyle
LUNA, Anna Therese
SAN JOSE, Rinah Marrion
SANTAIGO, Robert Uriel
SY, Ryona Allison
YU, Andrei
THE NEED FOR
CONTROL
ORGANIZATION
a group of persons working together for
specific purposes or goals ORGANIZATIONAL GOALS
INDIVIDUAL GOALS
The need to design a control system is for the
facilitation of GOAL CONGRUENCE
of the organization and its individuals.
TWO MAIN ASPECTS OF
THE CONTROL SYSTEM
1. BEHAVIORAL ASPECT
narrow the gap between personal and
organizational goals; motivate the employees
to strive towards these motivational goals
2. FORMAL ASPECT
help provide the tools to influence the
behavior of the employees toward the
attainment of desired goals
THE CONTROL
PROCESS
CONTROL
process of assuring management that
organization plans, programs, and
specific tasks are carried out EFFECTIVELY
when targets are met
EFFICIENTLY
when the minimum amount of
resources are used in meeting the
targets
THE CONTROL PROCESS
1. ESTABLISHMENT OF STANDARDS
2. ANALYSIS OF PERFORMANCE
3. CORRECTION OF DEVIATION
THE CONTROL PROCESS
ESTABLISHMENT OF STANDARDS
process by which criteria or benchmarks are
set against which actual performance can be
measured BUDGET
MASTER BUDGET
SALES BUDGET
THE CONTROL PROCESS
ANALYSIS OF PERFORMANCE
done periodically and on a regular basis
REPORTS
THE CONTROL PROCESS
CORRECTION OF DEVIATION
remedial actions when actual performance is
not in accordance with planned performance
MANAGEMENT CONTROL
& OPERATING CONTROL
CONTROL MANAGEMENT OPERATIONAL
ELEMENTS CONTROL CONTROL
FOCUS OF ACTIVITY overall performance single task or operations
employees assigned to do
FOCUS OF CONTROL operating managers
the job; supervisors
financial and non-financial,
CONTROL REPORTS future and historical
date specific to operations
INFORMAL
CONTROL
FACTORS AFFECTING INFORMAL
MANAGEMENT CONTROL
1. SIZE AND REACH OF THE COMPANY
2. MANAGEMENT STYLE OF TOP
MANAGEMENT
3. SERVICES PERFORMED BY THE
COMPANY
CHARACTERISTICS OF
INFORMAL CONTROL SYSTEMS
1. PERFORMANCE STANDARDS are not explicitly
defined
2. ANALYSIS OF PERFORMANCE is not based on
reports that are regularly prepared for management
3. no regular time schedule for PERFORMANCE
EVALUATION
4. no SYSTEMATIC PROCESS wherein goals of the
company are formulated or reappraised
THE BUDGETING
PROCESS
THE BUDGETING PROCESS
system of management control in which
actual income and expenses are compared
to predicted income and expenses
BUDGETTING PROCESS OF A
HOTEL COMPANY
1. BUDGET PLAN for the succeeding year is prepared in
August
2. The controller oversees all activities and releases
GUIDELINES and ASSUMPTIONS to various units.
3. Units are classified as REVENUES or EXPENSE
DEPARTMENTS ..
REVENUE DEPARTMENTS
composed of food and drinks, room and
service departments
SERVICE DEPARTMENTS
include fees from telephone, laundry,
communication, etc.
BUDGETTING PROCESS OF A
HOTEL COMPANY
4. The HOTEL REVENUE BUDGET is prepared by the
revenue heads of a department which are submitted to the
controller
5. BUDGET CONTROL is derived by adding a margin
from actual revenue from previous year
6. EXPENSE DEPARTMENTS are classified into
three: personnel, engineering, and controller’s office
7. If PAYROLL and UTILITIES COST RATIOS are
within last year’s actual level, budget is approved, If not, then
budgets are further discussed.
BUDGETTING PROCESS OF A
HOTEL COMPANY
8. The FIRST DRAFT is discussed with the
General Manager, then to the Board.
REVENUE BUDGET
PROFIT PLAN
COMPARISON OF BUDGET AND
ACTUAL REVENUES
THE BUDGETING PROCESS
OPERATING BUDGETS FACILITATE
1. planning by operating managers
2. communication and coordination
among various segments
CONTROL TOOLS
& TECHNIQUES
OPERATIONAL
CONTROL TOOLS
concerned with the processes that the
organization uses in the performance of
an activity related to specific operations PRODUCTION
SCHEDULING
INVENTORY
CASH BALANCES
OPERATING
GENERAL SPECIFIC
TASKS
merchandise claim
internal control for cash and
SELLING merchandise
counter system; office
uniforms; stock cards
linear programming; internal
control for raw materials , EOQ and reorder point;
PRODUCTION factory supplies, and spare PERT/GANTT Chart; Critical
parts; quality control; Path Method
scheduling system
internal control for cash voucher system; petty
ACCOUNTING disbursements cash fund
ECIMDAERSHN CLMAI
OUECRNT SSMYET
assures management that all sales are recorded
in the cash register at the merchandise claim
counter area; cash should equal the recorded
sales at the end of each working day
MERCHANDISE CLAIM
COUNTER SYSTEM
assures management that all sales are recorded
in the cash register at the merchandise claim
counter area; cash should equal the recorded
sales at the end of each working day
OFEFCI NIMUROSF
identifies employees in the work area, especially
in sensitive places where confidential data are
stored or where stocks are kept
OFFICE UNIFORMS
identifies employees in the work area, especially
in sensitive places where confidential data are
stored or where stocks are kept
STKOC CASRD
show the record of all receipts and releases for
each item in the inventory; balance shown in the
stock card can be compared with the physical
count from time to time
STOCK CARDS
show the record of all receipts and releases for
each item in the inventory; balance shown in the
stock card can be compared with the physical
count from time to time
COIEMOCN ORRDE
UATQITYN
used to maintain inventories at the optimum level
considering the operating requirements and
financial resources of the business; considers two
major components of inventory costs
ECONOMIC ORDER
QUANTITY
used to maintain inventories at the optimum level
considering the operating requirements and
financial resources of the business; considers two
major components of inventory costs
OLGHNID COSST
consist of the desired rate of return on the
investment in inventory and other costs like
insurance, warehousing, and storage expenses
HOLDING COSTS
consist of the desired rate of return on the
investment in inventory and other costs like
insurance, warehousing, and storage expenses
RDNOIRGE TCSOS
costs of procuring the inventory items like the clerical
salaries of the Purchasing Department’s staff
ORDERING COSTS
costs of procuring the inventory items like the clerical
salaries of the Purchasing Department’s staff
EOERRRD POTIN
inventory quantity level that will automatically
trigger the purchase of new stocks; depends on
the EOQ, the lead time required by suppliers before
an order can be filled and the average usage
REORDER POINT
inventory quantity level that will automatically
trigger the purchase of new stocks; depends on
the EOQ, the lead time required by suppliers before
an order can be filled and the average usage
LNRIEA
RGIPMAGONRM
typically deals with the problem of allocating
limited resources among competing activities in
the best possible or optimal way; control function
of linear programming is to optimize the objectives
by the simultaneous solution to a set of linear
equations representing objectives and constraints
LINEAR
PROGRAMMING
typically deals with the problem of allocating
limited resources among competing activities in
the best possible or optimal way; control function
of linear programming is to optimize the objectives
by the simultaneous solution to a set of linear
equations representing objectives and constraints
GATNT CHTAR
shows the scheduled time of accomplishing the
tasks of an activity; can be used to compare actual
progress sin production with scheduled progress
GANTT CHART
shows the scheduled time of accomplishing the
tasks of an activity; can be used to compare actual
progress sin production with scheduled progress
RTACLICI PAHT
MTDEOH
appropriate for large and complex projects in which
many interdependent tasks are involved; used to
identify the most time consuming series of tasks
CRITICAL PATH
METHOD
appropriate for large and complex projects in which
many interdependent tasks are involved; used to
identify the most time consuming series of tasks
ROAPMGR VLOIEANATU
& RVWEEI ECUTQNEHI
refinement of the CPM where three time estimates
are made for each task:
THE EARLIEST POSSIBLE
TIME OF COMPLETION
THE TARGET
COMPLETION TIME
THE LATEST POSSIBLE
TIME OF COMPLETION
PROGRAM EVALUATION
& REVIEW TECHNIQUE
refinement of the CPM where three time estimates
are made for each task:
THE EARLIEST POSSIBLE
TIME OF COMPLETION
THE TARGET
COMPLETION TIME
THE LATEST POSSIBLE
TIME OF COMPLETION
OUEVRCH ETSSMY
requires that every liability should be recorded as
soon as sit is incurred and that only checks be
used in payment of approved liabilities
VOUCHER SYSTEM
requires that every liability should be recorded as
soon as sit is incurred and that only checks be
used in payment of approved liabilities
PEYTT CAHS FUDN
MYTSSE
internal control over these small cash payments
can best be achieved through this
PETTY CASH FUND
SYSTEM
internal control over these small cash payments
can best be achieved through this
MANAGEMENT
CONTROL TOOLS
monitor and evaluate OVERALL
OPERATIONS of the firm and are
commonly financial in nature
TYPES OF CONTROL REPORTS
FINANCIAL
balance sheet, income statement
ACCOUNTING REPORTS
MEASUREMENT
budget reports, variance analysis reports
REPORTS
RESPONSIBILITY cost center reports, profit center reports,
ACCOUNTING REPORTS investment center reports
TYPES OF CONTROL REPORTS
FINANCIAL ACCOUNTING REPORTS
prepared in accordance with the GAAP
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
present to management summaries and analysis
of deviations from established standards or plans
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
_ _ _ _ _ _ REPORTS
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
BUDGET REPORTS
compare actual results with the budget together
with the analysis of differences and other
explanations
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
_ _ _ _ _ _ PLAN
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
PROFIT PLAN
composed of the sales and expenses
budgets is the commonly used basis for
evaluating managerial performance
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
_ _ _ _ _ VARIANCE
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
PRICE VARIANCE
accounts for the difference between the
actual price and budget price
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
PRODUCT _ _ _ VARIANCE
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
PRODUCT MIX VARIANCE
results from selling a different combination of
products from that contained in the budget
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
_ _ _ _ _ _ VARIANCE
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
VOLUME VARIANCE
results from selling different quantities of
products from the budget
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
VARIANCE _ _ _ _ _ _ _ _ REPORTS
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
VARIANCE ANALYSIS REPORTS
commonly prepared for management related
to manufacturing costs when a standard cost
system is used
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
STANDARD _ _ _ _ COSTS
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
STANDARD UNIT COSTS
carefully predetermined costs for the
production of a single unit of output
TYPES OF CONTROL REPORTS
RESPONSIBILITY ACCOUNTING REPORTS
measure the effectiveness and efficiency of
responsibility centers
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
Responsibility Centers
organizational unit headed by a manager who is
accountable for the work done by his organizational unit
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
Responsibility Centers
organizational unit headed by a manager who is
accountable for the work done by his organizational unit
xpsEeen enrCste
control system measures performance by analyzing the
expenses or costs incurred by the unit
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
Responsibility Centers
organizational unit headed by a manager who is
accountable for the work done by his organizational unit
Expense Centers
control system measures performance by analyzing the
expenses or costs incurred by the unit
Potrif rnestCe
evaluated on the basis of profit
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
Responsibility Centers
organizational unit headed by a manager who is
accountable for the work done by his organizational unit
Expense Centers
control system measures performance by analyzing the
expenses or costs incurred by the unit
Profit Centers
evaluated on the basis of profit
nenIettvms etnsreC
profit of the responsibility center is compared with the
assets employed in earning it
TYPES OF CONTROL REPORTS
MEASUREMENT REPORTS
Responsibility Centers
organizational unit headed by a manager who is
accountable for the work done by his organizational unit
Expense Centers
control system measures performance by analyzing the
expenses or costs incurred by the unit
Profit Centers
evaluated on the basis of profit
Investment Centers
profit of the responsibility center is compared with the
assets employed in earning it
MANAGEMENT
CONTROL TOOLS
CASH BUDGET
operational control tool which assists
managers in determining IDLE CASH
CASH FOR DEFICITS
CASH FOR LONG -TERM ASSETS
DIVIDENDS
MODIFICATIONS
NEW CONTROL
MEASURES
CUSTOMER
SATISFACTION
mainly focused on customer; digital; trend of
business to be CUSTOMER-DRIVEN
QUALITY MEASUREMENTS
(STATISTICAL QUALITY CONTROL)
TOTAL QUALITY MANAGEMENT
benchmarking “To extend the philosophy of
continuous improvement to all
other operations and processes
in the firm.”
QUALITY MEASUREMENTS
(STATISTICAL QUALITY CONTROL)
INTERNATIONAL STANDARDS
ORGANIZATION
collection of standards for various
practices GENEVA, SWITZERLAND
100+ COUNTRIES IN THE WORLD
DEPARTMENT OF TRADE &
INDUSTRY
QUALITY MEASUREMENTS
(STATISTICAL QUALITY CONTROL)
INTERNATIONAL STANDARDS
ORGANIZATION
most popular QUALITY MANAGEMENT
FOOD SAFETY
ENVIRONMENTAL MANAGEMENT
CHILD SEATS IN CARS
USING
TECHNOLOGY
CLOUD COMPUTING (storage of data)
ISSUES IN
CONTROL
COST IMPLICATIONS
OF CONTROL
“Control requires that NOT ONE
PERSON should have full control of
a transaction.”
COST IMPLICATIONS
OF CONTROL
PERSONNEL, CAPITAL, AND
OPERATING, COSTS PERSONNEL
businesses need more manpower
to control as the businesses grow
COST IMPLICATIONS
OF CONTROL
“The more your business expands, the
MORE CONTROL you would need.”
DANGERS OF
REMOTE CONTROL
some ENVIRONMENTAL VARIABLES
that affect the firm might be uncontrollable by
company personnel; TIME LAG could delay
corrective actions
OVERCOMING RESISTANCE
TO CONTROL
the leader should EMPLOY TECHNIQUES to counter
balance these negative feelings associated with control;
management should ENCOURAGE PARTICIPATION
of employees in the planning stage.
CONTROL THROUGH
SELF-CONTROL
individual’s self-control is based on
VALUES and BELIEFS LONG & EXTENSIVE
TRAINING PROGRAMS
SKILLS TRAININGS
CONTROL THROUGH
SELF-CONTROL
EFFECTIVITY is based on the acceptance
of the employee of the training.
CONTROL
B A 1 O 1
BONGAS, Kennice Angela
CARAIG, Johanne Erica
INOCENCIO, Isaiah Kyle
LUNA, Anna Therese
SAN JOSE, Rinah Marrion
SANTAIGO, Robert Uriel
SY, Ryona Allison
YU, Andrei
