Department of Management

College of Business and Economics

Addis Ababa University

Introduction to Management

Yohannes Neda
yohannesneda@gmail.com

Strategic Management 1
Yohannes Neda
 Chapter Eight
THE CONTROLLIGN
FUNCTION
Chapter Objectives Contents

At the end of this course you will be able to:
✓ Explain the meaning and purpose of controlling
✓ Apply the controlling process
✓ Identify the methods of controlling
✓ Use the principles of controlling
✓ Meaning and Purpose of Controlling
✓ The Control Process
✓ Types of Control Methods
✓ Principles of Controlling

2
 Definition of Control

➢ Controlling
 The process of measuring performance and taking action to ensure
desired results.
 Has a positive and necessary role in the management process.
 Ensures that the right things happen, in the right way, at the right time.
 Importance of Controlling
 Adapting to changing conditions
 Limiting the magnification of errors

3
The Controlling Process

4
 The Controlling Process

➢ Step 1 — establishing objectives and standards

 Output standards
Measure performance results in terms of quantity,
quality, cost, or time.
 Input standards
Measure effort in terms of amount of work
expended in task performance.

5
The Controlling Process

➢ Step 2 — measuring actual performance

 The goal is accurate measurement of actual

performance results and/or performance efforts.

 Must identify significant differences between actual

results and original plan.

 Effective control requires measurement.

6
The Controlling Process
➢ Step 3 — comparing results with objectives and
standards
 Need for action reflects the difference between
desired performance and actual performance
 Comparison methods:
Historical comparison
Relative comparison
Engineering comparison

7
The Controlling Process
➢ Step 4 — taking corrective action
Taking action when a discrepancy exists between
desired and actual performance.
 Management by exception
Giving attention to situations showing the greatest
need for action.
Types of exceptions
Problem situation
Opportunity situation
8
Types of Controlling
➢ Feed forward controls/Preventive/Steering/ Preliminary

 Employed before a work activity begins.

 Ensures that:
 Objectives are clear.
 Proper directions are established.
 Right resources are available.
 Focuses on quality of resources.

9
Types of Controlling
➢ Concurrent controls …

 Focus on what happens during work process.

 Monitor ongoing operations to make sure they are
being done according to plan.
 Can reduce waste in unacceptable finished
products or services.

10
Types of Controlling

➢ Feedback controls/Post-Action/ Output Control

 Take place after work is completed.

 Focus on quality of end results.

 Provide useful information for improving future operations.

11
Types of Controlling

12
Types of Controlling

 Cybernetic and Non-cybernetic Controls

 A cybernetic control system is a self-regulating control system that,
once it is put into operation, can automatically monitor the
situation and take corrective action when necessary.
 A non-cybernetic control system is a control system that relies on
human discretion as a basic part of its process.

13
Characteristics of an Effective Control System

 Future–Oriented  Organizationally Realistic

 Multidimensional  Flexible
 Economically Realistic/  Focus on Critical Control
Cost Effective Points
 Accurate  Easy to Understand
 Acceptable to Organization  Emphasis on Exception
Members  Reliability and Validity
 Timely  Monitorable
14