Project 4:  Controlling

The key roles that management plays in business are planning, organizing, leading, and controlling. The management is tasked with the creation of the business goals, bringing together the resources needed to achieve the goals, ensuring that the workforce is adequately skilled to perform the task, and measuring the output against the set standards. The purpose of this essay is to analyze the management function of control in a business setting. This will be analyzed by first understanding the concept of control. Then using a case study, we will be able to compare actual performance against the standards set while addressing any deviations through corrective action.

Controls

Control is the measurement of the performance of the business against the set standard. It mainly involves the use of five steps: (1) set objectives, (2) measure performance, (3) compare performance to standards, (4) determine the reasons for deviations and then (5) take corrective action as needed (Learning, 2013). The objectives set can either be in monetary terms profits and cost or in other units of production terms such as training time. Performance is then measured in different ways depending on what is being measured. For example, employee Performance is measured through periodic performance appraisal. Once the performance has been compared, deviations are noted, if they surpass the acceptable range of variation, then action needs to be taken. Taking corrective action can involve: doing nothing, correcting the actual performance, or choosing to revise the set standards. Application of effective control measures bear a cost to the organization such as Financial, Poorly implemented controls and

Responsiveness costs. Financial costs emerge when the organization sets aside a team to conduct the internal audit. Poorly implemented controls are a cost that emerges as a result of failure to fully implement new controls. Responsiveness costs are due to the time taken between making decisions and the corrective actions needed to be applied. The benefits of control outweigh the cost it takes. The main benefit is that it ensures an organization maintains the standard of quality while reducing inefficiencies in the system.

From the case study given, Sleek Motors needs to be concerned with the results for the electric-car production because most cities are performing below the Utilization rate. In the case of Georgetown (49.09%) and Tijuana(77.27%), the percentages are below  Standard (81.82%) by a wide margin. This shows that the cities are not fully utilizing the resources. The percentage of safety incidents per employee exceeded the standard in all the cities with the highest being  Koenigsegg (3%). This serves as an indicator that there is a need for training on safety and also creating a safe environment in the organization.

Standard Specifications

           From the case study presented about Sleek motors, we will endeavor to analyze the performance of each branch against the standards that have been set on the different metrics. The total cost of manufacturing had been set at (13,500) and only one branch, Koenigsegg (12,750), spent below the standard. The deviation margins seen are wide, with the highest being Kansas City who spent (16,000). This creates a need to re-calibrate the standard set. Most departments managed to deliver below The manufacturing cycle time set for them. There is a need to have more control over Ft. Wayne department as it had the highest variation. When it came to the Yield % of cars without rework, all the branches’ performance was within the acceptable variation. Most of the branches exceeded the standard set for the recall rate with only one Ft. Wayne performing below the standard. This shows that there is a need for control in the production process to reduce the numbers. The branches performed within the standard when it came to the Scrap rate metric, thus no action is required. When it came to the average percentage of production metric, all the branches performed above the standards set. The number of hours (8) set for training was not met by all the branches. There is a need for continuous training of employees on production to reduce the cost incurred from the high number of recalls received. The effects of lack of effective training can also be seen in the Shipping Problems metric, as only one branch was able to meet the standard set. The percentage of Safety Incident Per employee was also above the standard set in all the branches. More training should be conducted on the safety measures that need to be followed. Only two branches, Kansas City(48,000) and Lingotto(45,500), met and exceeded the set number of units to be manufactured(45,000). Georgetown (27,000) had the lowest margin. The deviation in this performance indicated the need for the company to re-evaluate the processes that are being used in that branch. This is also reflected in Georgetown’s performance against the utilization matrix.

    Corrective Action

              Total quality management (TQM) is a management system that emphasizes the continuous improvement of an organization to satisfy its stakeholders’ needs: For customers, that is achieved through high-quality products, employees through human growth, shareholders through productivity and the community through social contribution. TQM aims at ensuring zero defects, thus it works to prevent the occurrence of the defects from the onset. This tool will greatly benefit the Sleek Motors organization. It can be used as a tool to reduce the cost of production by decreasing the number of defects. TQM is very keen on employee education which is needed in the organization.

Conclusion

      The management function of control plays a key role in driving customer satisfaction. It ensures that there is consistent delivery of high-quality products. Organizations are also able to efficiently allocate the resources available for efficient results.

References

Learning, L. (2013). Principles of Management. Retrieved May 14, 2020, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/why-it-matters-test-page/

Kantardjiev, M. (2015). The relationship between total quality management (TQM) and strategic management. Journal of Economics, Business and Management, 3(5), 537-541.

Sadikoglu, Esin, Olcay, & Hilal. (2014, March 16). The Effects of Total Quality Management Practices on Performance and the Reasons of and the Barriers to TQM Practices in Turkey. Retrieved May 15, 2020, from https://www.hindawi.com/journals/ads/2014/537605/