Explain the methods of control and the challenges managers face in controlling today.

1. 1 · Open. Managers use several tools to measure and correct performance across the whole organization.
2. 2 · Financial controls.
   • Liquidity, leverage, activity and profitability ratios
   • Budgets as standards for income and spending
3. 3 · Work a short ratio example. Current ratio 6,000,000 ÷ 4,000,000 = 1.5; profit margin 1,800,000 ÷ 30,000,000 = 6% against an 8% standard.
4. 4 · Other methods.
   • Management information systems
   • Balanced scorecard (Kaplan and Norton)
   • Benchmarking
   • Audits and performance measures
5. 5 · Draw the balanced scorecard. [Four boxes around 'vision and strategy': financial, customer, internal processes, learning and growth]
6. 6 · Challenges.
   • Cultural and global differences
   • Workplace privacy
   • Employee theft and fraud
   • Customer interactions
   • Corporate governance
   • Over-control and gaming of targets
7. 7 · In Sri Lankan business. Integrated annual reports of large listed groups; governance rules such as audit committees.
8. 8 · Close. Good control is balanced: enough to stay on track, not so much that it kills initiative.

Scoring tip: Show at least one ratio with real numbers. Examiners reward a correct calculation more than a list of ratio names.