Chapter 7- CONTROLLING

Controlling and its Nature

Controlling refers to the process of ascertaining whether

organizational objectives have been achieved; if not, to determine
why not; and determining what activities should be taken to
achieve objectives better in the future.

In managerial terminology, control is ensuring work

accomplishment according to plans.

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 Characteristics Controlling

• Control is a function of Management

it is a follow up action to the other functions of management performed by managers to
control the activities assigned to them in organization.

• Control is based on Planning

it is designed to evaluate the actual performance against predetermined standards set-up in
the organization. Plans serve as a standards of desired performance.

• Control is a dynamic process

it involves continuous review of standards of performance and results in corrective action,
which may lead to changes in other functions of management

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 THE LINK BETWEEN PLANNING AND
CONTROLLING

• Planning and controlling functions always co-exist or have to exist together as

one function depends on the other.
• Without the basis of planning, controlling activities become baseless and
without controlling, planning becomes a meaningless exercise. In absence of
controlling, no purposed can be served by.

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 Importance of Controlling
When controlling is properly employment, it will help
the organization achieve its goal in the most efficient and
effective manner possible.

In any organization, deviations, mistakes, and

shortcomings happen once in a while. When they occur,
they contribute to unnecessary expenditures, which add up
to the cost of producing goods and services. The
introduction of effective control measures minimizes the
ill effects of such negative occurrences.

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 Importance of Controlling
The importance of controlling may be illustrated as
it is applied in a typical factory. If the required standard
daily output for individual workers is 100 pieces, all
workers who do not produce the requirement are given
sufficient time to improve; if no improvements are
forthcoming, they are asked to resign. This action will help
the company keep its overhead and other costs at expected
levels. If no such control measure is applied, the company
will be saddled with escalating production costs, which will
place the viability of the firm in jeopardy.

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 THE CONTROL PROCESS
1. Establishing Performance Objectives and Standards. For effective controlling,
what has to be achieved must first be determined. Typical examples of
objectives and standards are as follows:

a. Sales Targets - are expressed in quantity or monetary terms;

b. Production Targets - are expressed in quantity and quality;
c. Worker Attendance - is expressed in terms of rate of absences;
d. Safety Records - are expressed in number of accidents for given periods; and
e. Supplies Used - are expressed in quantity or monetary terms for given periods.

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 STEPS IN THE CONTROL
PROCESS
2. Measuring Actual Performance. There is a need to measure actual performance
so that when shortcomings occur, adjustments could be made. The adjustments
will depend on the actual findings.

3. Comparing Actual Performance to Objectives and Standards. Once actual

performance has been determined, this will be compared with what the
organization seek to achieve.

4. Taking Necessary Action. The purpose of comparing actual performance with the
desired result is to provide management with the opportunity to take corrective
action when necessary.

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 The control process consists of four steps, namely

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 If in the illustration cited above, the management of the
construction firm found out that only 15 kilometers were
constructed after two months, then, any of the following
actions may be undertaken;

a. Hire additional personnel;

b. Use more equipment; do
c. Require overtime work.

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 TYPES OF CONTROL
1. Feed forward Control (Preliminary Control) is a mechanism in a
system for preventing problems before they occur by monitoring
performance inputs and reacting to maintain an identified level.

This control is helpful to the manager since it allows the

manager to plan a work effectively; they can regulate resources like
employees, raw materials, and capital ahead of time. This means that
future problems can be avoided

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 TYPES OF CONTROL
2. Concurrent Control. When operations are already ongoing and
measures to detect variances are made, concurrent control is said to
be undertaken.
• Focus on what happens during work process
• Monitor ongoing operations to make sure they are being done
according to plan

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 TYPES OF CONTROL
3. Feedback Control (Output Control) When information is
gathered about a completed activity for purpose of evaluating and
deriving required steps for improving the activity, feedback
control is undertaken.
• Focus on the quality of end results
• Provide useful information for improving future operations

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 Examples of activities using concurrent control
are the following:

• The manager of a construction firm constantly monitors the progress of the

company's activities. When construction is behind schedule, corrective
measures like the hiring of additional manpower are made.

• In a firm engaged in the production and distribution of water, the chemical

composition of the water procured from various sources is checked thoroughly
before they are distributed to the consumers.

• The production manager of an electronics-manufacturing firm inspects

regularly the outputs consisting of various electronic products coming out of
the production lines.

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 Examples of activities using feedback control:

the supervisor who discovers that continuous overtime work

for factory workers lowers the quality of output. The feedback
information obtained leads to some adjustments in the
overtime schedule.

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Thank you!
-Ms. Reiz Portales
 CHAPTER 8 - Introduction to the different functional areas
of management
a. Human Resource Management
b. Marketing Management
c. Operations Management
d. Financial Management
e. Material and Procurement Management
f. Office Management
g. Information and Communication Technology Management

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