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Welcome once again to Home Economics. Today, we will continue with the free course on Business Economics.
Learn about administrative control in business, its types, stages, importance, and areas of application for effective management.
Key Takeaways
- Administrative control is a continuous regulatory process essential for business success.
- Control functions to correct existing faults and prevent future errors in all company processes.
- Applying control before, during, and after processes ensures optimal performance and quality.
- Control enhances organizational adaptability, efficiency, and value creation.
- Control spans multiple departments, each with specific focus areas to monitor and improve.
Summary
- Administrative control involves verifying if business activities align with plans and standards to identify and correct errors.
- Three types of administrative control: preventive (before action), concurrent (during action), and feedback (after action).
- Four stages of administrative control: setting standards, measuring results, comparing results with standards, and taking corrective action.
- Control helps detect current and future errors, enabling better planning and response to changes.
- It accelerates production cycles by identifying and eliminating inefficiencies.
- Control adds value by ensuring quality and facilitating customer preference.
- It supports delegation and teamwork by monitoring progress without limiting creativity.
- Control applies across all company areas: production, commercial, human resources, and financial departments.
- Examples include quality, cost, sales, attendance, vacation, salary, budgetary, and inventory controls.
- Effective control is continuous and essential for maintaining strengths and correcting weaknesses.
Full Transcript — Download SRT & Markdown
Speaker A
In this chapter, we will talk about administrative control and its phases. What is administrative control?
Speaker A
The concept of business control is very general, and you can see it defined in many different ways. However, in the end, they all more or less say the same thing.
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For example, for Henry Fayol, control consists of verifying if everything occurs in accordance with the adopted plan, with the instructions issued, and with the established principles.
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Its purpose is to point out weaknesses and errors in order to rectify them and prevent them from occurring again.
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For Robert B. Buchele: The control in the company consists of the process of measuring the current results in relation to the plans, diagnosing the reason for the deviations, and taking the necessary corrective measures.
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These two definitions that I just mentioned are among the most accepted, so you can choose the one you like the most.
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Types of administrative control: There are three types of administrative controls: Preventive control: this is carried out before taking any action.
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Their role is to ensure that the project runs without risk. In this control, the availability of all the necessary resources must be verified, taking into account the expenses that must be assumed.
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Concurrent control: this control is carried out during the processes. Its function is to ensure that all processes are carried out optimally, supervising the different phases and ensuring that the quality or safety of both machines and workers is not compromised.
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Feedback control: this control is carried out once the process or activity is finished. Its objective is to gather information about the performance of the process in order to implement possible improvements to the production process.
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Therefore, we see that control is present in all phases of the production process, that is, there is control both before, during, and after the production process of the company.
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Stages of administrative control: We find mainly four stages. The first is to determine standards and objectives: in this first step, the objective of the measurement must be established, determining the values that are expected to be obtained when evaluating the process.
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From them, it will be known if the company has achieved the objectives or not. These objectives can be of a very diverse nature, such as reaching a certain volume of production, controlling the quality of the production, not exceeding certain costs in the manufacture of the product, etc.
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2 - Measurement of the company's real results. To evaluate the results obtained by the company, there are a wide variety of procedures such as meetings, reports, and accounting analysis.
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The effectiveness of the control will be reduced in the event that the information does not arrive on time or it is not possible to compare it with the standards that we have set in the first phase.
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3 - Comparison of the results with the established standards. Once you have the measurement, it is possible to compare the values with previous standards or measurements to determine if the work is being done correctly or not.
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4 - Feedback and decision making: Depending on the result when comparing the values, adjustments can be made in the processes.
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We will speak of a deviation when the results differ significantly from what was planned, in which case we will have to take corrective action to solve the problem.
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At the end of the day, the objective of this administrative control is to correct weaknesses and ensure that strengths are maintained.
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Importance of control in the company: The control function is very important in the company since it allows the company to detect errors that are occurring in the production process but also, and this is key, it detects future errors since the control function also applies to company planning.
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In addition to these two key functions, control is used, among others, to: Face change.
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This is an inescapable part of the environment of any organization. The monitoring function helps managers respond to threats or opportunities that occur over time by helping them detect changes that are affecting the products and services of their organizations.
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Produce faster cycles. During the production process of the company, there may be errors that slow down the manufacturing or sales process of the products or services that the company sells.
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By detecting these failures, the company's times are faster, which translates into a competitive advantage over its competitors. Add value. The main objective of an organization should be to "add value" to its product or service, in such a way that customers will buy it, preferring it over the consumer's offer. This added value can take the form of an above-average quality, which can only be achieved through quality control procedures. Facilitate delegation and teamwork.
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Administrative control allows the executive to control the progress of his employees without hindering their creativity or participation in the work.
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Areas of control in the company: Control acts in all areas, areas, and levels of the company.
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Virtually all activities are under some form of control. In the production area, for example, the main existing controls are: Quality control.
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It serves to correct any deviation from the quality standards of products or services. Cost control to continuously verify production costs, whether raw material or labor.
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Control of production times, to eliminate possible waste of time or unnecessary waiting during working hours, and control of inventories of raw materials, tools, products, among others, to avoid running out of materials.
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If we are in the commercial area, we find two main types of controls: Sales control.
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The daily, weekly, monthly, and annual volume of the company's sales is controlled by client, region, product, or service, in order to detect failures in relation to the forecasts.
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And cost control. To continuously check the costs of sales, as well as the commissions of the sellers, the costs of advertising, etc.
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On the other hand, if we change departments and go to the human resources area, we find three main controls: Attendance controls and delays.
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This type of control verifies the delays of the personnel, the absences justified by medical reasons, and the unjustified ones.
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Vacation control. Thanks to this control, we can know when a worker takes vacation and for how many days.
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And salary control that verifies that salaries are being awarded correctly, their readjustments, or possible corrections, among other things.
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And finally, in the financial area, we find two main controls: Budgetary control: Budget control is the control of financial expenses by department.
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In this way, we will be attentive to possible deviations in expenses. And cost control.
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A global control of the costs incurred by the company is carried out, whether they are production, sales, administrative, or financial expenses such as interest and amortization.
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Before ending this video commenting on the conclusions of the administrative control, let me tell you that if you want to know more about the areas that make up a company and their functions, I made a video explaining all this that I leave here on the labels and that I recommend you see.
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Now, yes, conclusions: Business control is an administrative function, which measures and evaluates performance and takes corrective action when needed.
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In this way, control is essentially a regulatory process. The application of control in companies seeks to serve two main purposes: correct existing faults or errors; and prevent new failures or errors of the processes.
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For the control in the company to be effective, it must be applied all the time, that is, before the processes (preventive control), during the process (concurrent control), and after the process, which would be the feedback control.
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In addition to being applied throughout the time, it must also...
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For the control in the company to be effective, it must be applied all the time, that is, before the processes (preventive control), during the process (concurrent control) and after the process, which would be the Feedback Control.
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In addition to being applied throughout the time, it must also be exercised in all areas of the company.And finally, by applying control in the company it is possible, among others: To determine and analyze the causes that originate the deviations so that they are not repeated present in the future
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Locate those responsible and establish corrective measures. Reduce costs and save time by avoiding mistakes.
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And improve the productivity of all the company's resources. With all this I say goodbye for today, if I have helped you and you want to continue learning I leave you two videos for you to click on based on YouTube recommendations.
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On the other hand, I would appreciate it if you would subscribe to my channel if I have been useful to you by clicking on my logo on the left side of the video.
Speaker A
As always, any questions or suggestions please leave them in the comments so I can answer them.
Speaker A
See you in the next video
Topics:administrative controlbusiness controlpreventive controlconcurrent controlfeedback controlbusiness managementquality controlcost controlproduction controlcompany departments
