Controlling

CHAPTER 7
CHAPTER OUTCOMES
Upon completing this topic, students
should be able to:

i. Define controlling
ii. Discuss the importance
iii. Explain the controlling process
iv. Explain the types of control
v. State the barriers to successful control
and the ways to overcome
CHAPTER OUTLINE
7.1 Definition
7.2 The importance of control
7.3 The controlling process
7.4 Types of control
7.5 Potential barriers to effective
control
7.6 Criteria to successful control
7.1 Definition
CONTROLLING
Monitoring performance of the organisation, identifying
deviations between planned and actual result and taking
corrective action. (Lewis)

ORGANISATIONAL CONTROL
The systematic process through which managers
regulate organizational activities to make them
consistent with the expectations established in
plans, and to help them achieve all predetermined
standards of performance. (Lewis)
7.2 The Importance
There are several reasons why controlling is important :

 Assist the management process

 Deal with change or uncertainty

 Deal with complexity

 Deals with human limitations

 Help delegation and decentralization to run

smoothly
7.3 The Control Process
Set performance standards

Measure actual performance

Compare actual performance with

standards
If no deviations / If deviations are
acceptable unacceptable
Take no corrective
action (or provide Take corrective
positive action
reinforcement)

Periodically repeat
 The Control Process
FOUR (4) STEPS
• SETTING • COMPARING
• MEASURING
STANDARDS ACTUAL • RESPONDING
ACTUAL
OF PERFORMAN TO
PERFORMAN
PERFORMAN CE WITH DEVIATIONS
CE
CE STANDARDS
THR FOU
ONE TWO
1 2 EE 3 R 4
 THE CONTROL PROCESS
• SETTING
STANDARDS Whenever possible, the standards
OF should be set in a manner that allows
PERFORMAN
them to be compared with actual
ON CE
performance.
E 1
The performance standard has acceptable deviations.

EXAMPLE:
• Average productivity standard at Barner Foods = 500
pounds of cheese per worker.
•The acceptable deviation = + / - 50 pounds
Defining an Acceptable Range of Variation
 The Control Process
• MEASURING
ACTUAL
An organization must decide:
PERFORMAN i. What to measure.
CE
ii. When to measure.
TW
O 2
iii.How frequently to measure.
Can be done by personal observation, statistical
reports, oral reports, and written reports.
EXAMPLE:
• The manager records the average performance
standards for five employees.
• Kelly (40), Richard (60), Mell (40), Anna (55), Zack (45)
 The Control Process
• COMPARING
ACTUAL This step involves determining if
PERFORMAN
CE WITH actual performance compared to
STANDARDS standards falls within acceptable
THR
EE 3 limits.

EXAMPLE:
• Average standard performance = 500
• The acceptable deviation = + / - 50 pounds
• Actual performance = Kelly (400), Richard (600), Mell (400),
Anna (550), Zack (450)
• Unacceptable deviation = Kelly (400), Mell (400) & Richard(600)
 The Control Process
• RESPOND If the deviation from performance
TO is unacceptable, then corrective
DEVIATIO
NS action is warranted.
FOU
R 4 If the deviation is acceptable, no
correction action is necessary.
EXAMPLE:
Take some action towards the employees that did not
achieve the standards (first warning / deduct their
salary)
 Types of Control / Control
7.4 Methods
Feed forward
(Preventive)
Control

TYPES OF Concurrent
CONTROL Control

Feedback
Control
Types of Control / Control Methods
1) FEED FORWARD (PREVENTIVE)
Control
Focuses on detecting undesirable material,
financial, or human resources that serve as
inputs to the transformation process.

Resources are prepared before action.

Important to prevent problems at the input

levels before going through the
transformation process.
Example : Barner Foods – tests raw milk
input that will eventually be converted into
cheese products.
Types of Control / Control Methods
2) CONCURRENT
Control
Focuses on the transformation process to
ensure that it is functioning properly.
Detect deviations from some standard or
goal.
Allow corrections to be made before a
particular sequence of actions is
completed.
Example : Berner Food – monitored the
temperature and time in cheese making
process.
Types of Control / Control Methods
3) FEEDBACK
Control
Focuses on discovering undesirable output and
implementing corrective action
Causes of any deviation are determined, & the
findings are applied to similar future activities.

Also used as a basis for rewarding.

Example : Berner Foods – before products are

shipped, cheese product will be tested to ensure
their safety for comsuption.
Types of Control / Control Methods

Transformati
Input on Output
Processes

Concurrent Feedback
Feed Forward Control Control
Control
Correct Corrects
Anticipates problems as problems after
Problems they happen they occur
 Potential barriers to EFFECTIVE
7.5 Control

i. Employee resistance to be controlled

ii. Over control, no privacy

iii. Standard are unrealistically high

iv. Managers wait for big, dramatic occurrence

 Criteria of SUCCESSFUL /
7.6 EFFECTIVE Control
Timeliness Economy

Corrective
Accuracy
Action

EFFECTIVE
CONTROL
Flexibility Understandability

Reasonable Emphasis on
Criteria the Exception
 The Criteria of EFFECTIVE
Control
Accuracy Timeliness
• Information must be accurate Information must be collected
• Inaccurate Information will routed
cause the & evaluated quickly to enable
wrong decision or the wrong managers to solve problems on
actions. time.

Corrective Action Flexibility

Can detect deviation and can tell

Control must be able to suit the
what corrective action to take.
change in environment.
 The Criteria of EFFECTIVE
Control
Economy
Cost implementing control
should be lower than or at most
equal to the benefits derived from
it.
Emphasis on the
Exception
Exception system ensures
manager will not overwhelmed by
information from standards.
Understandability
Control system that
understandable will prevent
unnecessary mistakes, frustrate
employees, and ultimately be
ignored.
Reasonable Criteria
• Control standards must be
reasonable and attainable.
• Unreasonable will cause
unethical
conduct by employees.
THE END