Types of Control, Essay Example

There are many different types of control that are available at the disposal of any manager to help monitor the operations and staff within a company.  This is also true for my organization.  I work as the supervisor for a local grocery retail store and there are several types of control that are utilized on a daily basis to ensure that the desired end results are ultimately achieved.  Our organization effectively utilizes approvals, security of assets, reviews of performance and segregation of duties as control efforts to distinguish the desires results and ensure that they are achieved.  Each of these control tactics has a particular purpose and controls a different aspect of the organization.  Furthermore, my role as manager within the company provides me with the ability to utilize these tactics in the best ways possible to ensure production and efficiency within the store for the staff as well as to provide a quality service to the customers.

First of all, approvals are essential elements to ensure that management maintains control over the staff activities.  Approvals exist when “Management authorizes employees to perform certain activities and to execute certain transactions within limited parameters.  In addition, management specifies those activities or transactions that need supervisory approval before they are performed or executed by employees” (“Understanding Internal Controls”, 2009).  There are many behaviors that our management team ensures are approved before employees are able to perform specific actions.  For instance, a cashier in the checkout lanes must receive an electronic and verbal approval to begin working a cash register.  When the employee is ready to begin working, he or she clocks in using the time cards and then contacts me or one of the assistant managers to receive a pre-sorted cash register with $250 worth of assorted bills and coin money to begin working.  Furthermore, the cash register requires the manager’s key to unlock the digital controls to allow for an employee to begin using its computer and to input the cash register funds.  This system is utilized to ensure that no employee is able to take funds from the manager’s office or begin working without a manager’s approval.  We want to ensure that our managerial policies restrict any potential theft or abusive behaviors that employees may utilize against the store.

Similarly, our store management team has utilized a second control method to ensure that all assets are safely secured during all time periods throughout the day.  This method, called Security of Assets, is defined as “Access to equipment, inventories, securities, cash and other assets is restricted; assets are periodically counted and compared to amounts shown on control records” (“Understanding Internal Controls”, 2009).  This control method is used by our team to ensure that all inventoried materials, whether financial or product-based are always counted and in the appropriate amounts.  Too many stores have to write off lost assets through the inappropriate policies or behaviors of staff employees.  This control method ensures that all assets are accounted for and are not lost or misplaced.  We frequently count and recount available merchandise as well as all moneys that are sent out and turned back in from cash registers.

The next control method is that we actively review our performance from quarter to quarter and year-to-year.  Reviews of Performance are any time “Management compares information about current performance to budgets, forecasts, prior periods, or other benchmarks to measure the extent to which goals and objectives are being achieved and to identify unexpected results or unusual conditions that require follow-up” (“Understanding Internal Controls”, 2009).  This control method has been very effective for our company because we are able to analyze what areas are down from last quarter or last year in order to make appropriate changes.  We compare our performance reviews to the monthly and yearly goals set forth by our corporate offices and management staff.  If we are lacking in areas, we want to make effective changes so that profits increase and our benchmarks are achieved.  This control method is performed solely by the managerial staff and is only communicated to the staff employees when we have determined that changes must be made.  Otherwise, the performance reviews are usually not communicated to anyone outside of the corporate officials or managerial staff.

Finally, we also utilize the control method of Segregation of Duties.  This control method is where “Duties are segregated among different people to reduce the risk of error or inappropriate action.  Normally, responsibilities for authorizing transactions, recording transactions (accounting), and handling the related asset (custody) are divided” (“Understanding Internal Controls”, 2009).  Within our organization, we ensure that our employees are specialized workers.  Our checkout clerks will only work the cash registers or bagging lanes in our store.  They will have no knowledge of inventory or provide any manual labor in stocking or restocking the shelves.  This role is specifically delegated to our utility staff that will stock the shelves, perform maintenance repairs in the building and handle unloading the trucks when a new inventory shipment has been delivered.  We utilize this control method to reduce errors and ensure that our employees become experts in their specific task responsibilities.

References

Bateman, T.S., & Snell, S.A. (2009). Management: Leading & collaborating in a competitive world, eighth edition. Boston, MA: McGraw-Hill.

Understanding internal controls. (2009). Retrieved from http:// www.ucop.edu/ctlacct/under-ic.pdf