BAM 191:Intro to Business Administration

Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

Lesson Title: Controlling Function Materials:

Student Activity Sheet
Lesson Objectives:
1. Explain the importance of controlling as function of References:
management; Ballada, W; 2018; Introduction
2. Identify the control process; to Business and Management;
3. Enumerate the various characteristics of control;
4. Distinguish different control methods and systems; Mutya, R.:2019; Fundamentals
5. Apply management control in accounting and of Management Functions,
Practices and Cases
marketing concepts and techniques; and
6. Prepare a Budget Plan

Productivity Tip: “Action is the foundational key to all success.” ~ Picasso

A. LESSON PREVIEW/REVIEW
1) Introduction
Hi Friend! You’re now on your Module #20. You only have 6 modules left to finish the course. In this
module, you will learn the last function of management, “controlling’. Let’s begin activating your prior
knowledge in this lesson by answering the pretest below. Do not worry if you do not know the answer to
each question. This just means that you have little or no prior knowledge about the lesson.

Instruction: Read each of the statements and simply write the letter of your choice beside the item number on
the following:

When Mike Berry of Berry Enterprises realized that his plan to increase teamwork
among lower-level managers was not producing the results he desired, he took quick
____1 action to make necessary adjustments. Mike was exercising the management
function of?
A.) Planning B.) Organizing C.) Leading D.) Controlling
Which of these is NOT a key management function?
____2 A.) Controlling B.) Planning C. Leading D.) Research
Basis for cost control includes the following except for:
____3 A.) Fixed Cost B. Variable C.)Direct Labor D. Materials E.) Credit Cost
When managers use metrics to assess performance and then develop strategies for
____4 corrective action, they are performing the ________ function of management.
A.) Planning B.) Leading C. Staffing D.) Controlling
Quantitative performance measures used by human resource managers to assess
____5 operations are called
A.) Ratios B.) Benchmarks C.) Metrics D.) Grades
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FLM 1.0
 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

2) Activity 1: What I Know Chart, part 1

What I Know Questions: What I Learned

1. What is controlling?

2. What is budget?

B. MAIN LESSON
1) Activity 2: Content Notes
PART 1. CONTROLLING

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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

PART 2. MANAGEMENT CONTROL SYSTEMS

Types of Organizational Controls

1. Feed forward controls – sometimes called preliminary or preventive controls, attempt to identify and
prevent deviations in the standards before they occur.
2. Concurrent controls – monitor on-going employee activity to ensure consistency with quality
standards. These controls rely on performance standards, rules, and regulations for guiding employee
tasks and behaviors.
3. Feedback controls – involve reviewing information to determine whether performance meets
established standards.

Effective Organizational Control Systems

• A focus on critical points
• Acceptance by employees
• Accuracy
• Availability of information when needed
• Comprehensibility

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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

• Economic feasibility
• Integration into established processes

Organizational Control Techniques

- Provide managers with the type and amount of information they need to measure and monitor
performance.

1. Financial Controls
Managers use financial statements, such as an income statement or balance sheet, to monitor the
progress of programs and plans.
• Financial statements – provide management with information to monitor financial resources and
activities.
• Income statement – shows the results of the organization’s operations over a period of time.
• Balance sheet – shows what the organization is worth (assests0 at a single point in time, and the
extent to which those assets were financed through debt (liabilities) or owner’s investment (equity).
• Financial audits – formal investigations, are regularly conducted to ensure that financial management
practices follow generally accepted procedures, policies, laws, and ethical guidelines.
• Financial ratio analysis – examines the relationship between specific figures on the financial
statements and helps explain the significance of those figures.
a. Liquidity ratios – measure an organization’s ability to generate cash.
b. Profitability ratios – measure an organization’s ability to generate profits.
c. Debt ratios – measure an organization’s assets being financed by debts as well as its ability to pay
its obligations.
d. Activity ratios – measure an organization’s efficiency in operations and use of assets.

2. Budget controls
A budget depicts how much an organization expects to spend (expenses) and earn (revenues) over a
time period.
• Top-down budgeting – managers prepare the budget and send it to subordinates.
• Bottom-up budgeting – figures come from the lower levels and are adjusted and coordinated
as they move up the hierarchy.
• Zero-based budgeting – managers develop each new budget by justifying the projected
allocation against its contribution to departmental or organizational goals.
• Flexible budgeting – any budget exercise can incorporate flexible budgets, which set “meet or
beat” standards that can be compared to expenditures.

3. Marketing controls
Marketing controls help monitor progress toward goals for customer satisfaction with products and
services, prices, and delivery.
• Market research – gathers data to assess customer needs – information critical to an
organization’s success.
• Test marketing – small scale product marketing to assess customer acceptance.
• Marketing statistics – measure performance by compiling data and analyzing results.
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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

4. Human Resource Controls

Human resource controls help managers regulate the quality of newly hired personnel, as well as
monitor current employees’ developments and daily performances.
• Performance appraisals
• Disciplinary programs
• Observations
• Training and development assessments

5. Computers and information controls

Provide enormous benefits, such as improved productivity and information management, organizations
should remember the following limitations of the use of information technology.
• Performance limitations – replacing long-time organizational employees with information
systems technology may result in the loss of expert knowledge that these individuals hold.
• Behavioral limitations - too much information can overwhelm employees, cause stress, and
even slow decision making.

PART 3. PREPARING A BUDGET PLAN

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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

2) Activity 3: Skill-building Activities

Part 1. Instruction: Complete the table below. Given Organizational Control Techniques, identify each
technique and give real-life application in example.

Financial Controls Budget controls Human Resource Controls

Example: Example: Example:

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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

Part 2. Instruction: You are almost there! Try to solve this word puzzle. Write the words inside the box using
the clues below. Answers with more than one word should be separated by space.

Clues.

1. Statements are updated to reflect how 4. Meeting customers’ expectations and

much was spent helps anticipate customer needs
2. Both planning tool and a control 5. Targets
mechanism 6. Money out
3. Checking

Part 3. Instruction: To check your understanding in the preparation of budget, prepare your budget plan for
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 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

May. Assuming that you want to increase your income by 20% based on last month’s actual data.
ABC Budget Plan
(April 2019)
Budget Actual Difference
Revenues and Gains
Sales Revenues 100,000 105,000 5,000
Interest Revenues 5,000 5,000 -
Gains on sales of assets 3,000 3,000 -
Total revenue and gains 108,000 113,000 5,000

Expenses and Losses

Cost of goods sold (variable) 75,000 80,000 (5,000)
Commission expense (variable) 5,000 5,500 (500)
Office supplies expense (variable) 3,500 4,000 (500)
Office equipment expense (fixed) 2,500 2,500 -
Advertising expense (variable) 2,000 2,000 -
Interest expense (variable) 500 600 (100)
Loss from lawsuit (variable) 1,500 2,000 (500)
Total expenses and losses 90,000 96,600 (6,600)

Net Income 18,000 16,400 (1,600)

ABC Budget Plan
(May 2019)
Budget
Revenues and Gains
Sales Revenues
Interest Revenues
Gains on sales of assets
Total revenue and gains

Expenses and Losses

Cost of goods sold (variable)
Commission expense (variable)
Office supplies expense (variable)
Office equipment expense (fixed)
Advertising expense (variable)
Interest expense (variable)
Loss from lawsuit (variable)
Total expenses and losses

Net Income

FLM 1.0
 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

3) Activity 4: What I Know Chart, part 2

It’s time to answer the questions in the What I Know chart in Activity 1. Log in your answers in the table.

4) Activity 5: Check for Understanding

Question: Is it possible to use the same control techniques in all areas within an organization? Why or why
not?

_______________________________________________________________________________________________

_______________________________________________________________________________________________

_______________________________________________________________________________________________

_______________________________________________________________________________________________

_______________________________________________________________________________________________

______________________________________________________________________________________________

C. LESSON WRAP-UP
1) Activity 6: Thinking about Learning
Congratulations for finishing this module! Shade the number of the module that you finished.

My Work Tracker
You are done with the session! Let’s track your progress.

Period 1 Period 2 Period 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Did you have challenges learning the concepts in this module? If none, which parts of the module helped you
learned the concepts?
________________________________________________________________________________________

Some question/s I want to ask my teacher about this module

is/are:___________________________________________________________________________________
________________________________________________________________________________________

FAQs
U -1. What is quality control?
Quality control is a process by which entities review the quality of all factors involved in production.

FLM 1.0
 BAM 191:Intro to Business Administration
Student Activity Sheet #20

Name:__________________________________________ Class number: _________________

Section: _________ Schedule: ______________________ Date: _________________________

KEY TO CORRECTIONS
Pre-test
1.D 2. D 3.E 4.D 5.C
Activity #3
Part 1. Answer may vary.
Part 2.
1. Financial Controls; 2. Budget; 3. Controlling; 4. Research; 5. Standards; 6. Expenditures
Part 3.
1. Note: Figures may vary except for net income of 19,680

Activity # 5. Answer may vary.

ASSIGNMENT:

Write your answers on a separate paper. Submit your assignment next “IN” meeting.

CASE 11

OPPORTUNITY KNOKS
You and your friend are both graduating from college this year. Your friend’s father asked whether the
two of you would like to buy the air-conditioning business which he founded and operated for thirty years. It has
been a very lucrative business, and a leader on the line.
Your friend’s father will finance to buy-out through loan, which will paid off over the next ten years. His
father agreed to be a consultant for a year or two in case his advice is needed. The firm has sixty qualified
employees, large inventory, forty service trucks, and a well-established list of clients.
You and your friend are discussing the possibility of buying the firm. Discuss the types of control you
would use and the control process the two of you would implement as the new owners of the firm.

CASE 12

SWEETS UNLIMITED
Sweet Unlimited is a corporation engaged in manufacturing confectionary products. It uses an
automated system of production to ensure uniformity in all areas of production and quality control. The quality
control group undergoes highest level of evaluation in every stage of the cycle. The team analyzes and
determines deviations from standards and takes the necessary corrective actions even on early onset of raw
materials procurement, to processing and packaging. The corporation, with its well-equipped in-house quality
control team test confectionary products on various parameters.
1. What is the type/s of control system performed by the quality assurance team?
2. Explain the statement, “analyzes, determines deviations and take necessary corrective actions.”
3. Discuss the control system according to timing be applied on this type of production system. Identify
steps you can create to make one final confectionary output.

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