Organization and

Management
Target
Control methods and techniques are deemed
necessary in marketing and accounting.
Basically, these can determine not only the
success of the business but also gauge the
performance, quality, stability and efficiency of
the organization. An effective and efficient
manager must create a good control methods or
techniques that are congruent to the needs and
concerns of the business in order to achieve its
organization’s goals and of course,
 This learning resource will
help you understand the
concept and nature of
different control methods and
techniques in accounting and
marketing
Jumpstart
Activity 1: Pretest
Direction: Read and understand the
questions below and choose the letter
of the correct answer. Use a separate
sheet of paper for your answer.
______1. What techniques are used
for measuring an organization’s
financial stability, efficiency,
effectiveness, production output,
and organization members’
attitudes and morale?
A. Control Methods
B. Non-quantitative Methods
C. Quantitative Methods
______2. Which among the
choices below are the most
common quantitative tools?
A. Budgets
B. Audits
C. Budgets and Audits
D. None of the given choices.
______3. What is referred to as
the overall control of
performance instead of only
those of specific organizational
processes?
A. Quantitative Methods
B. Non-quantitative Methods
C. Qualitative Methods
______4. Which should be
excluded from the choices
below?
A. Feedforward control
B. Employee discipline
C. Concurrent control
D. Project runway
______5. Enforcing discipline in the
workplace is not easy. In what way
a manager should control his or her
employees?
A. Feedforward control
B. Project management control
C. Employee discipline
D. Concurrent control
______6. Which among the
choices is considered the
lifeblood of a business?
A. Budgets C. Sales
B. Audits D. Profit
______7. Which among the
statements below best explain why
managers need
accounting and financial controls?
A. The goal of business is to gain profit.
B. Managers need accounting and
financial controls to gain profit.
C. Financial ratios determine the success
of the business.
______8. Which is NOT true among the
choices below?
A. Asset management is practiced to achieve
organizational goals.
B. Liquidity ratio tests the organization’s ability
to meet short term obligations.
C. Activity ratio determines if the organization
is technically insolvent.
D. Profitability ratio measures the efficiency of
assets to generate profits.
______9. Which is NOT a type
of benchmarking?
A. strategic benchmarking
B. management benchmarking
C. operational benchmarking
D. None of the given choices.
______10. How does benchmarking
begin?
A. After the sales, interests and profits were
determined.
B. Determine what company functions are to be
benchmarked.
C. Before conducting the strategic plans of a
company.
D. When 50% of the employees are complaining
about their salaries.
Activity 1: WORD HUNT GAME

Direction: Loop ten (10) important terms

that you can find inside the box. You can find
them vertically, horizontally, diagonally and
inverted. Write your answers in a separate
sheet of paper.
Activity 2. TRUE/ FALSE.
Directions: Read each statement
below carefully. Mark “T” for
statements you believe are true, and
“F” for statements you believe are
false. Write your answers in a
separate sheet of paper.
_______1. A firm may apply
control techniques or
methods which are either
quantitative or
nonquantitative.
_______2. Budgets and
audits are among the most
uncommon quantitative
tools.
_______3. Internal auditing
involves the independent review
and evaluation of the
organization’s nontactical
operations.
_______4 Audit service
provides an independent
audit programs, activities,
systems and procedures.
_______5. Qualitative methods
use tools such as inspections,
reports, direct supervision and
on-the-spot checking and
performance evaluation or
counseling to accomplish
goals.
_______6. Managers choose
the feed forward method as
the most desirable because
of its preventive action.
_______7. The concurrent
control’s advantage is that it
can help managers correct
problems before they become
too costly or damaging.
_______8. Project managers need
technical and intrapersonal skills
in order to control the
implementation of the project
efficiently and effectively.
_______9. Management
control in marketing doesn’t
need projected sales,
forecasts, or statistical
models.
_______10. Some firms
produce two sets of forecasts,
one that uses a statistical
approach and another that
relies on customer.
Discover
Direction: Read the text below.
You can highlight the important
terms as you go along by
underlining them.
 CONTROL METHODS AND
SYSTEMS
Control methods are techniques used
for measuring an organization’s
financial stability, efficiency,
effectiveness, production output, and
organization members’ attitudes and
morale.
METHODS OF CONTROL
A firm may apply control
techniques or methods which
are either quantitative or
nonquantitative.
1. Quantitative Methods – make
use of data and different quantitative
tools for monitoring and controlling
production output. Budgets and
audits are among the most common
quantitative tools. By far, the most
widely recognized quantitative tool is
the chart.
 Charts used as control tools
normally contrast time and
performance.The visual impact of a
chart often provides the quickest
method of relating data. A
difference in numbers is much
more noticeable when displayed
graphically.
 Budgets. The budget remains the
best known control device. Budget
and control are, in fact,
synonymous. An organization’s
budget is an expression in
financial terms of a plan for
meeting the organization’s goals
for a specific period.
 Audits. Internal auditing involves
the independent review and
evaluation of the organization’s
nontactical operations, such as
accounting and finances. As a
management tool, the audit
measures and evaluates the
effectiveness of management
2. Nonquantitative methods – refer to the
overall control of performance instead of only
those of specific organizational processes. These
methods use tools such as inspections, reports,
direct supervision and on-the-spot checking and
performance evaluation or counseling to
accomplish goals. Other control methods include
feedforward control, concurrent control, feedback
control, employee discipline and project
management control.
 Feedforward control
prevents problems because
managerial action is taken
before the actual problem
occurs.
 Concurrent control takes place
while work activity is happening.
The best example of this type of
control is direct supervision or
management by walking around.
 Feedback control is control that
takes place after the occurrence of
the activity. It is disadvantageous
because by the time the manager
receives the information, the
problem had already occurred and
waste or damage had already
resulted.
When the above three control methods are
compared, managers choose the feedforward
method as the most desirable because of its
preventive action. The concurrent control’s
advantage is that it can help managers correct
problems before they become too costly or
damaging. Feedback control’s advantage is the
exhibiting of variance between the standard and
the actual work performance. Little variance
indicates that planning is successful while
significant variance may give managers an idea of
 Employee discipline is a control challenge for
managers. Enforcing discipline in the workplace is not
easy. Concerns regarding this include workplace privacy,
employee theft, and workplace violence, among others.
From simple monitoring of employee’s computer usage
at work to protecting employees at work from
psychologically unstable workers who may have hidden
desires to harm them, managers need discipline control
to ensure that tasks can be efficiently and effectively
carried out as planned.
 Project management control ensures that the task
of getting a project’s activities done on time, within the
budget, and according to specifications, is successfully
carried out. Project managers need technical and
interpersonal skills in order to control the
implementation of the project efficiently and effectively.
The project planning process controls include: the
defining objectives, identifying activities and resources,
establishing sequence and estimating time for activities,
determining the project completion date, and comparing
with objectives and determining additional resource
requirements.
 APPLICATION OF
MANAGEMENT CONTROL IN
ACCOUNTING AND
MARKETING CONCEPTS AND
TECHNIQUES
Management control in accounting and finance is the
control that makes use of balance sheet, income
statement, and cash flow statement to analyze and
examine financial statements in order to determine the
company’s financial soundness and viability, as well as
financial ratios to determine the company’s stability.
Meanwhile, management control in marketing is the
control that makes use of projected sales or forecasts,
statistical models, econometric modeling, surveys,
historical demand data, and actual consumption of
their products.
Sales is considered to the “lifeblood of the business”. No
matter how good the product is, if it is not sold in the
market, there is no way that a business can survive.
Thus, the projected sales often guide the sales manager
or the marketing head on how much the target or the
quota must be. In a way, this will also guide of the
operations manager in determining the number of units
to be produced. Excess production may mean cost, and
unsold items may resort to inventory expenses or
worse, the obsolescence or degradation of the product.
Indeed, the sales forecast requires consideration.
For more established businesses, or
those that had been in the industry for
quite some time, the most commonly
used technique is to look at the
historical demand and actual
consumption, with the assumption of
the same economic condition.
A firm may generate a set of assumptions
regarding the macroeconomic environment to
which all divisions must adhere as their guide, but
forecasts can still be generated from the customer
level and taken into account. Some firms produce
two sets of forecasts, one that uses a statistical
approach and another that relies on customer
feedback. Senior managers then compare the two
forecasts to see how far apart they are before
setting a final sales objective.
 ACCOUNTING/FINANCIAL
CONTROL RATIOS
The goal of business is to gain profit. In
order to achieve this, managers need
accounting/financial controls. Managers
must also analyze the organization’s
financial condition, which is done with
the help of the following financial ratios.
A. Liquidity ratio – test the
organization’s ability to meet short
term obligations; it may also refer to
acid tests done when inventories
turn over slowly or are difficult to sell
current ratio = current assets ÷
current liabilities
B. Leverage ratio – determines if
the organization is technically
insolvent,
meaning that the organization’s
financing is mainly coming from
borrowed money or from the owners’
investments
deb – to – assets ratio = total
C. Activity ratio – determines if the
organization is carrying more
inventory than what it needs; the
higher the ratio, the more efficiently
inventory assets are being used.
inventory turnover = cost of
goods sold ÷ average inventory
D. Profitability ratio – determines
the profits that are being generated;
net profit after taxes ÷ total sales
or it measures the efficiency of
assets to generate profits
return on investment = net profit
after taxes ÷ total assets
In addition to the above ratios, asset
management is also practiced to
achieve organizational goals. Asset
management is the ability to use
resources efficiently and operate at
minimum cost.
inventory turnover = sales ÷
average inventory
STRATEGIC CONTROL
Strategic plans serve as control points for
strategic control – a systematic monitoring at
control points that leads to change in the
organization’s strategies based on
assessments done on the said strategic plans.
Control provides a chance for comparing the
plan’s intended goals with the actual
organizational performance. This then becomes
the basis for modifications or changes in the
BENCHMARKING
Benchmarking is an approach or process of
measuring a company’s own services and
practices against those of recognized leaders
in the industry in order to identify areas of
improvement. It is a widely used and well-
accepted approach because it helps
organizations gather data and information
against which performance can be measured
and controlled.
Weihrich and Koontz (2005) gave
three types of benchmarking:
A. Strategic benchmarking –
which compares various
strategies and identifies the key
strategic elements of success
B. Operational benchmarking – which
compares relative costs or possibilities
for product differentiation
C. Management benchmarking –
which focuses on support functions such
as planning and information systems,
logistics, human resource
management, etc.
The benchmarking process begins with determining
which company functions are to be benchmarked and
the key performance indicators to be measured. Then,
the best industry performers have to be identified. Data
gathering and analysis follows and these become the
foundations for performance goals. New programs are
implemented, and during this step, performance is
measured at regular intervals. Corrective actions are
taken in order to close the gap between the organization
and the best-in-class companies. The monitoring of
results must be continuous to ensure benchmarking
success.
Explore
Here are some enrichment activities for
you to master and strengthen the basic
concepts you have learned from this
lesson. Are you ready?
Enrichment Activity 1

Direction: Answer on a
separate sheet of paper the
following questions below.
1. What are the two types of control
methods or techniques?
________________________________________
________________________________________
________________________________________
________________________________________
________________________________________
__________________
2. Using the T-Chart below, compare
and contrast Quantitative Methods
and Nonquantitative Methods.
3. Among the two control methods, which do you
think is more effective and efficient? Why do you
say so?
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
_______________________________________
Enrichment Activity 2
Direction: Match Column A to
Column B. Select the letter of your
answer from Column B that best
describes the key terms from Column
A. Write the letter of your choice in a
separate sheet of pap
Deepen
Activity 1: SITUATIONAL
ANALYSIS
Direction: Read the situation
below and answer the question that
follows through writing a short
essay. Below is your rubric to assess
your output.
Food and beverage businesses became a
demand after the lockdown. With the
economic crisis we are experiencing, many
lost their jobs and some resorted to
establishing their own businesses. The Dulay
family is one of them. They started a milk tea
business in front of their house right after the
lockdown was lifted.
To make sure, they secured all the necessary
business permits from their municipality and
started their small business right away. Mang
Ernesto, the head of the family, together with
his wife, served as the manager and children,
her employees. He divided the labor equally
among them and made sure that everyone
works efficiently.
He does the planning, budgeting, auditing and the like
to make sure that they are making money to sustain
their family needs. Their location is beside the market
where passersby can easily grab and buy a milk tea. For
a while, their milk tea business became known in their
barangay not only because of its good and sweet taste
but also because of their hospitality and
accommodation for their customers. For six months
already, they are accumulating good sales and profits,
and almost every week, their sales are increasing.
Question: How do you think the Dulay family,
especially Mang Ernesto, handle their
business in terms of control methods and techniques?
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________