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    Supreet Singh
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    The document discusses the importance of control in management by defining controlling, explaining its purpose, and outlining the key steps in the control process including measuring performance, comparing to standards, and taking corrective actions. It also examines different types of controls like feedforward, concurrent, and feedback controls as well as information controls and benchmarking best practices.

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    The document discusses the importance of control in management by defining controlling, explaining its purpose, and outlining the key steps in the control process including measuring performance, comparing to standards, and taking corrective actions. It also examines different types of controls like feedforward, concurrent, and feedback controls as well as information controls and benchmarking best practices.

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    21 views20 pages

    Controlling

    Uploaded by

    Supreet Singh
    The document discusses the importance of control in management by defining controlling, explaining its purpose, and outlining the key steps in the control process including measuring performance, comparing to standards, and taking corrective actions. It also examines different types of controls like feedforward, concurrent, and feedback controls as well as information controls and benchmarking best practices.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 20

    1

    Foundations of Control
    2

    What Is Control?
    • Controlling
    ▫ The process of monitoring activities to ensure that
    they are being accomplished as planned and of
    correcting any significant deviations.
    • The Purpose of Control
    ▫ To ensure that activities are completed in ways
    that lead to accomplishment of organizational
    goals.
    3

    Why Is Control Important?


    • As the final link in management functions:
    ▫ Planning
     Controls let managers know whether their goals and plans
    are on target and what future actions to take.
    ▫ Empowering employees
     Control systems provide managers with information and
    feedback on employee performance.
    ▫ Protecting the workplace
     Controls enhance physical security and help minimize
    workplace disruptions.
    4

    The Planning–Controlling Link


    5

    The Control Process


    • The Process of Control
    1. Measuring actual
    performance.
    2. Comparing actual
    performance against a
    standard.
    3. Taking action to correct
    deviations or inadequate
    standards.
    6

    The Control Process


    7

    Measuring: How and What We Measure


     Sources of  Control Criteria
    Information (How) (What)
    ▫ Personal observation ▫ Employees
    ▫ Statistical reports  Satisfaction
    ▫ Oral reports  Turnover
    ▫ Written reports  Absenteeism
    ▫ Budgets
     Costs
     Output
     Sales
    8

    Comparing
    • Determining the degree of variation between
    actual performance and the standard.
    ▫ Significance of variation is determined by:
     The acceptable range of variation from the standard
    (forecast or budget).
     The size (large or small) and direction (over or
    under) of the variation from the standard (forecast
    or budget).
    9

    Defining the Acceptable Range of Variation


    10

    Taking Managerial Action


    • Courses of Action
    ▫ “Doing nothing”
     Only if deviation is judged to be insignificant.
    ▫ Correcting actual (current) performance
     Immediate corrective action to correct the problem at once.
     Basic corrective action to locate and to correct the source of
    the deviation.
     Corrective Actions
     Change strategy, structure, compensation scheme, or training
    programs; redesign jobs; or fire employees
    11

    Taking Managerial Action (cont’d)


    • Courses of Action (cont’d)
    ▫ Revising the standard
     Examining the standard to ascertain whether or not
    the standard is realistic, fair, and achievable.
     Resetting goals that were initially set too low or too
    high.
    12

    Managerial Decisions in the Control Process


    13

    Controlling for Organizational


    Performance
    • What Is Performance?
    ▫ The end result of an activity
    • What Is Organizational
    Performance?
    ▫ The accumulated end results of all of the organization’s
    work processes and activities
     Designing strategies, work processes, and work activities.
     Coordinating the work of employees.
    14

    Organizational Performance Measures


    • Organizational Productivity
    ▫ Productivity: the overall output of goods and/or
    services divided by the inputs needed to generate
    that output.
     Output: sales revenues
     Inputs: costs of resources (materials, labor expense,
    and facilities)
    ▫ Ultimately, productivity is a measure of how
    efficiently employees do their work.
    15

    Types of Control
    16

    Tools for Controlling Organizational


    Performance
    • Feedforward Control
    ▫ A control that prevents anticipated problems before
    actual occurrences of the problem.
     Building in quality through design.
     Requiring suppliers conform to ISO 9002.
    • Concurrent Control
    ▫ A control that takes place while the monitored activity is
    in progress.
     Direct supervision: management by walking around.
    17

    Tools for Controlling Organizational


    Performance
    • Feedback Control
    ▫ A control that takes place after an activity is done.
     Corrective action is after-the-fact, when the problem has
    already occurred.
    ▫ Advantages of feedback controls:
     Provide managers with information on the effectiveness
    of their planning efforts.
     Enhance employee motivation by providing them with
    information on how well they are doing.
    18

    Information Controls
    • Purposes of Information Controls
    ▫ As a tool to help managers control other
    organizational activities.
     Managers need the right information at the right
    time and in the right amount.
    ▫ As an organizational area that managers need to
    control.
     Managers must have comprehensive and secure
    controls in place to protect the organization’s
    important information.
    19

    Information Controls
    • Management Information Systems (MIS)
    ▫ A system used to provide management with needed
    information on a regular basis.
     Data: an unorganized collection of raw, unanalyzed facts
    (e.g., unsorted list of customer names).
     Information: data that has been analyzed and organized
    such that it has value and relevance to managers.
    20

    Benchmarking of Best Practices


    • Benchmark
    ▫ The standard of excellence against which to measure and
    compare.
    • Benchmarking
    ▫ Is the search for the best practices among competitors or
    noncompetitors that lead to their superior performance.
    ▫ Is a control tool for identifying and measuring specific
    performance gaps and areas for improvement.

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