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    Control as a Feedback System, Feedforward Control

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    AASHISH MEHRA

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    Control as a Feedback System, Feedforward Control

    Uploaded by

    AASHISH MEHRA
    8 views16 pages

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    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    8 views16 pages

    Control as a Feedback System, Feedforward Control

    Uploaded by

    AASHISH MEHRA

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    UNIT 6: Controlling

    3
    CONTROL AS A
    FEEDBACK SYSTEM,
    FEEDFORWARD
    CONTROL, PREVENTIVE
    CONTROL
    Feedback Control Model

    Adjust Standards Adjust Performance

    Establish 1. Establish 2. Measure 3. Compare 4. Take


    Strategic standards of actual performance If corrective
    Goals performance. performance. to standards. Inadequate action.

    If Adequate

    4. Do nothing
    Feedback or provide
    reinforcement.
    Control Model

    Input Output
    Process

    Concurrent Feedback
    Pre-Control
    Control Control

    Preventive Corrective
    Methods of Control
    Organizational Control
    Focus
    Concurrent Control Feedback Control
    Feed forward Control
    Solve Problems as Solves Problems
    Anticipates Problems
    They Happen After They Occur
    Examples Examples Examples
    • Pre-employment • •
    Adaptive culture Analyze sales per
    drug testing • employee
    • Inspect raw Total •
    materials • quality Final quality
    Hire only inspection
    college graduates management • Survey
    Focus is on

    Focus is on

    Focus is on
    • customers
    Employee
    self-
    control
    Ongoing
    Inputs Outputs
    Processes
    Tools for Controlling
    Organizational Performance
     Feedforward Control
     A control that prevents anticipated
    problems before actual occurrences of
    the problem.
     Buildingin quality through design.
     Requiring suppliers conform to ISO 9002.

     Concurrent Control
     A control that takes place while the
    monitored activity is in progress.
     Directsupervision: Management By Walking
    Around (MBWA).
    Tools for Controlling
    Organizational Performance
    (cont’d)
     Feedback Control
     A control that takes place after an
    activity is done.
     Corrective
    action is after-the-fact, when the
    problem has already occurred.
     Advantages of feedback controls:
     Providemanagers with information on the
    effectiveness of their planning efforts.
     Enhanceemployee motivation by providing
    them with information on how well they are
    doing.
    Organizational
    18–8
    Performance: Financial
    Controls
    Traditional Other Measures

    Controls  Economic Value


     Ratio analysis Added (EVA)
     Liquidity  Market Value
     Leverage
    Added (MVA)
     Activity

     Profitability

     Budget Analysis
     Quantitative
    standards
     Deviations
    Popular Financial Ratios
    Popular Financial Ratios (cont’d)
    Tools for Controlling Organizational
    Performance: Financial Controls (cont’d)

     Other Measures
     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.
     The choice is to use less capital or invest
    in high-return projects.
    Tools for Controlling Organizational
    Performance: Financial Controls (cont’d)

     Other Measures (cont’d)


     Market Value Added (MVA)
     The value that the stock market places on a
    firm’s past and expected capital investment
    projects
     Ifthe firm’s market value (its stock and debt)
    exceeds the value of its invest capital (its
    equity and retained earnings), then
    managers have created wealth.
     The Practice of Managing Earnings
    Controlling Organizational
    Performance
     Balanced Scorecard
     Is a measurement tool that uses goals set
    by managers in four areas to measure a
    company’s performance:
     Financial

     Customer

     Internalprocesses
     People/innovation/growth assets

     Is intended to emphasize that all of these


    areas are important to an organization’s
    success and that there should be a balance
    among them.
    Information Controls
     Purposes of Information Controls
     As a tool to help managers control other
    organizational activities.
     Managers need the right information at the
    right time and in the right amount.
     As an organizational area that managers
    need to control.
     Managers must have comprehensive and
    secure controls in place to protect the
    organization’s important information.
    Information Controls
     Management Information Systems (MIS)
     A system used to provide management
    with needed information on a regular basis.
     Data:an unorganized collection of raw,
    unanalyzed facts (e.g., unsorted list of
    customer names).
     Information: data that has been analyzed and
    organized such that it has value and relevance
    to managers.
    Benchmarking of Best
    Practices
     Benchmark
     The standard of excellence against which to
    measure and compare.
     Benchmarking
     Is the search for the best practices among
    competitors or noncompetitors that lead to
    their superior performance.
     Is a control tool for identifying and
    measuring specific performance gaps and
    areas for improvement.

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