2. Learning Objectives:
At the end of the chapter, the student is
expected to understand the following:
Definition of Controlling
The Nature of Controlling
The Control Process
Characteristics of Control
Types of Control
Control Methods and Systems
3. Definition of Controlling
Controlling is the process of Controlling can be considered as
measuring and correcting the activity for knowing and
activities correcting important changes in
Such as plans, organization, the activities that are planned.
personnel, of an organization.
Controlling should be never be
Controlling determines what is considered negative; it is
being tackled by evaluating the managerial necessity and a help,
performance and, if there is a not an impediment or hindrance
deviation, by applying corrective
measures so that the activities
take place according to plans.
4. The Nature of Controlling
Planning is related to controlling.
Planning identifies the things to do for future
accomplishment. The failure of controlling would
mean failure of planning, and success of planning
means success of controlling.
After measuring the plans, and knowing that
the plans are not realistic, a modified or new plan
must be formulated.
5. All forms of management controls are designed to
give the manager information regarding progress. The
manager can use this information to:
Prevent crises.
If a manager does not know what is going
on, it is easy for small, readily solved Update plans.
problems to turn into crises. Remember that the final step in the planning
process is to control the plan. Controls allow
Standardization outputs. the manager to compare what is happening
Problems and services can be standardized with what was planned.
in terms of quantity and quality through the
use of good controls. Protect an organization’s asset.
Controls can protect assets from
Appraise employee performance. inefficiency, waste and pilferage.
Proper controls can provide the manager
with objective information about employee
performance.
The Nature of Controlling
6. In exercising the control function, a
manager measures the performance of an
individual, plans, or programs against their
predetermined standards and takes corrective
action if there are any deviations.
Establishing standards.
Thus, control involves:
Measuring performance against the established
standards.
Comparison of actual performance.
Taking corrective action when and where
deviations from the standards occur.
Making sure recommended corrective actions are
followed through.
The Control Process
7. Characteristics of Control
• Attuned to the activity. Controls should
reflect the needs of people using them.
For instance, manufacturing people
may require a king of control which • Control must be forward-looking.
may not be applicable for marketing Rather than relying on past indicators
people. or historical reports all the time,
forecasts and other forward-looking
• Deviations must be identified quickly. devices must be used. For instance,
What is the use of checking the focusing on probable problem areas
process or parts after they break and thus drawing attention for
down? corrective action improved
effectiveness.
8. • Control must be strategically oriented.
This involves selecting of the crucial
points at which control is applied. Care
should be exercised in selecting these
crucial points.
• Control should be economical. The cost of
• Control should be flexible. Controls establishing and maintaining controls
should permit for unexpected changes or should not exceed the benefits to be
situations. Rigidity destroys effectiveness derived from them.
of control.
• Control should be easy to understand.
Unless people understand their purpose
and the operations, they become useless.
Control should indicate corrective
action. Who or what is causing
deviations and what should be done
about it is the important aspect of
control.
Characteristics of Control
9. Control Methods and Systems
There are two kinds of control
methods:
1. Behaviour Control – (or personal) 2. Output Control – (or impersonal) is based
controls is based on direct personal on the measurement of outputs . Tracking
surveillance. production records or sales are examples of
The first line supervisor maintains a close output control.
personal watch over subordinates is using
behaviour control.
Thomas Peters and Robert Waterman strongly emphasize the need for managers at all levels to
take a hands- on approach to managing. By hands-on, they mean regularly mixing with
subordinates and visiting them at their workplaces. Thus, organizations need to use a mix of
output and behaviour controls; each serves different organizational needs. A budget is
statement of expected results or requirements expressed in financial or numerical terms.
10. Flexible Budgets. In order to overcome many of the shortcomings resulting from
inflexibility, flexible (variable) budgets are designed to vary with the volume of sales or
some other measure of output. Because of their nature, flexible budgets are generally
limited to expense budgets.
Zero-Base Budgeting. Is one approach to budgeting that has received attention over the
last several years. It requires each manager to justify an entire budget request in detail,
from scratch. Under zero-base budgeting, each activity under a manager’s discretion is
identified, evaluated, and ranked by importance.
Written Reports – these are the two basic types of written reports, analytical and
informational. Analytical reports interpret the facts they present; informational reports
only present the facts.
Steps in preparing a written report:
• planning the attack on the problem
• Collecting the facts
• Organizing the facts
• Interpreting the facts
• Writing the report
•
Control Methods and Systems
