Page 147 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes produce the correct results. Concurrent controls monitor ongoing employee activity to ensure
consistency with quality standards. These controls rely on performance standards, rules, and
regulations for guiding employee tasks and behaviors. Their purpose is to ensure that work
activities produce the desired results. As an example, many manufacturing operations include
devices that measure whether the items being produced meet quality standards. Employees
monitor the measurements; if they see that standards are not being met in some area, they make
a correction themselves or let a manager know that a problem is occurring.
Since concurrent control involves regulating ongoing tasks, it requires a thorough understanding
of the specific tasks involved and their relationship to the desired and product.

Concurrent control sometimes is called screening or yes-no control, because it often involves
checkpoints at which determinations are made about whether to continue progress, take corrective
action, or stop work altogether on products or services.

Caselet Zenith Industries Limited

“I heard about this variable budget idea in a management conference I attended last
week,” remarked Mr. Kapoor, President of Zenith Industries, a small company whose
clever new sports products had given rise to growth since its founding five years ago to a
level of 5 million in annual sales. “Some speaker said that the sound way to run a
company is to let all the department and section heads develop their own budgets.
But I cannot imagine doing this in this company. If I did, these people would spend so
much money that we would soon be bankrupt. No! As long as I am incharge of this
company, I will tell my people what they can spend. There will be no blank cheques here.
And I will hold my chief accountant responsible for making sure that this company makes
the profits I want. I have heard of too many companies, with the fast growth we have had,
that have gone into liquidation because optimism and uncontrolled spending went through
the ceiling. And this idea of variable budgets is even worse. Imagine what would happen
if I let everyone vary his budgets each month, quarter or year”.
Source: Parag Diwan, Management Principles and Practices, Excel Books.

Task Discuss how would you control the overhead costs of your organisation when
you know that they are high only on papers because they are being incurred by your
company to warm the pocket of your accountant?

Case Study A Purchase Manager’s Troubles

Description
I (Purchase Manager) am faced with a dilemma. I am not between the devil and the deep
sea—I am in the deep sea and the devil is waiting on the shore.
Well, the purchases in most industries are based on the production programme which in
turn is based on the sales forecast. Now firstly, the production has fallen far short of the
target and secondly, the sales forecast has failed to materialize into firm orders. The net
Contd...

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