2. Definition
• Controlling ensures that there is effective and efficient
utilization of organizational resources so as to achieve the
planned goals.
• Controlling measures the deviation of actual performance
from the standard performance, discovers the causes of such
deviations and helps in taking corrective actions.
3. CHARAECTERISTICS OF CONTROL
1. Control Process is Universal
2. Control is a Continuous Process
3. Control is Forward Looking
4. Control involves Measurement
5. Management Control is a System
6. Control is aimed at results not at people
7. Control is goal oriented
4. TYPES OF CONTROL
Feed forward Control
• Feed forward control focuses on the regulation of inputs (human,
material, and financial resources that flow into the organization) to
ensure that they meet the standards necessary for the transformation
process.
• Feed forward controls allow management to prevent problems rather
than having to cure them later.
• Unfortunately, these control require timely and accurate information
that is often difficult to develop.
• Known as preliminary control, pre control, preventive control.
5. Concurrent Control
• Concurrent control takes place while an activity is in progress. It
involves the regulation of ongoing activities that are part of
transformation process to ensure that they conform to organizational
standards. Concurrent control is designed to ensure that employee
work activities produce the correct results.
• Concurrent control involves regulating ongoing tasks. Concurrent
control sometimes is called screening or yes/no control, because it
often involves checkpoints at which determinations are made about
whether to continue progress, take corrective action, or stop work
altogether on products or services.
6. Feedback Control
• This type of control focuses on the outputs of the organization after
transformation is complete.
• Feedback provides managers with meaningful information on how
effective its planning effort was. If feedback indicates little variance
between standard and actual performance, this is evidence that
planning was generally on target. If the deviation is great, a manager
can use this information when formulating new plans to make them
more effective.
7. Steps in the Control Process
(1) Establishing standards and methods for measuring performance
(2) Measuring the performance
(3) Determining whether performance matches the standard
(4) Taking corrective action
8.
9. Establishing standards and methods for measuring performance
• Standards means simply the criteria of performance.
10. Establishing standards and methods for measuring performance
• Standards could include sales and production targets, work
attendance goals, safety records etc. In service industries, on the
other hand, standards might include the amount of time customers
have to wait in the queue at a bank, or the number of new clients
attracted by a new advertising campaign.
11. Measuring the performance
• The measurement of performance against standards should be done
on a forward-looking basis so that deviations may be detected in
advance of their occurrence and avoided by appropriate actions.
• There are many activities for which it is difficult to develop accurate
standards, and there are many activities that are hard to measure.
• It may be quite simple, for example, to establish labour-hour
standards for the production of a mass-produced item and it may be
equally simple to measure performance against these standards.
12. Determining whether performance matches the standard
• It is an easy but important step in the control process. It involves
comparing measured results with the standards already set. If
performance matches the standard, managers may assume that
"everything is under control". In such a case the managers do not
have to intervene in the organisation’s operations.
13. Taking corrective action
• If performance falls short of standards and the analysis indicates that
corrective action is required. The corrective action could involve a change
in one or more activities of the organisation’s operations.
• For example, the branch manager of a bank might discover that more
counter clerks are needed to meet the five-minute customer-waiting
standard set earlier.
• The emphasis should always be on devising constructive ways to bring
performance up to standard rather than on merely identifying past failures.
14. Importance of Controlling in Management
1. Coping with changes: Each and every modern organisation has to
cope with changes in the environment. New products and technologies
emerge, government regulations are two often amended or enacted,
competitors change their strategies. The control function helps
managers to respond to these environmental changes as and when
necessary
15. Importance of Controlling in Management
2. Creating better quality: Modern industries follow total quality
management (TQM) which has led to dramatic improvements in controlling.
Employees are empowered to inspect and improve their own work and this
also helps change their attitudes and approaches to achieving effective
control.
TQM program had helped restore quality, decrease cost and increase
production of giant organisations that confronted threats of shutdowns
owing to low quality, high cost and declining productivity
16. Importance of Controlling in Management
3. Creating faster cycles: Control helps speed up the cycles involved in creating and
then delivering new products and services to customers.
Customers expect not only speed but also customized products and services.
It is clear that the most successful companies try to personalise things and tailor
them to individual needs. They most successfully target narrow customer niches
with specific models.
17. Importance of Controlling in Management
4. Adding value: An organization that strives to survive through
competition should be able to "add value" to products or services so
that customers prefer them to those offered by the organisation’s
rivals.
18. Importance of Controlling in Management
5. Facilitating delegation and teamwork:
Under the traditional system, the manager would specify both the
standards for performance and the methods for achieving them.
Under a new, participative system, managers communicate the
standards, but then let employees, either as individuals or as teams,
use their own creativity to decide how to solve certain work problems.
The control process, then, lets the manager monitor the employees'
progress without hampering employees' creativity or involvement with
the work.
20. Controls must reflect nature and needs of the activity
• An adequate control system must reflect the nature and needs of the
operation concerned. A system of control useful for the vice-president in
charge of manufacturing will almost certainly be different in scope and
nature from that of the foreman in one of the shops under his supervision.
• The basic control tools of the sales department will vary from those of the
finance department, and these from the controls of the purchasing
department.
• Small business will doubtless need different kinds of controls from a large
business.
21. Controls must reflect nature and needs of the activity
• Certain techniques, such as budgets, break-even points, standard
hours or costs, or various financial ratios have general application in
many business situations.
• It is the task of the manager to be alert to the strategic factors in his
plans and operations that call for control and to make sure that the
techniques used are suited to them.
22. Controls must report deviations expeditiously
• Manager can- not do anything about the past and even rather little
about the present, the best control system is one that will report
deviations from plans expeditiously.
• The ideal system is one that detects deviations before they actually
occur. In any case, the information must reach the manager as soon
as possible, so that he can take action to head off continuing failures.
It is exactly because failures are not reported expeditiously that the
typical accounting system in a business enterprise is often weak in
furnishing control information.
23. Controls must be flexible
• An effective system of control must be flexible. Controls must remain
workable in the face of changed plans, unforeseen circumstances, or
outright failures. "A complex program of managerial plans may fail in
some particulars. The control system should report such failures and
should contain sufficient elements of flexibility to maintain
managerial control of operations despite such failures."
24. Controls must be flexible
• If a company has a budget system that projects a certain level of expenses,
and grants authority to managers to hire labor and purchase materials and
services at this level.
• This budget is based on a level of sales that has been forecast, the budget,
as a system of control, may become meaningless if the sales volume
actually experienced is considerably above or below that forecast.
• What is needed, of course, is a budget system that will reflect sales
variations as well as other deviations from plans if they occur. This has
been provided, as will be noted presently, by the flexible budget.
25. Controls must be flexible
• In the case of production scheduling, the production
manager must be prepared for failures occasioned by the
breakdown of a machine or the illness of a key worker.
• Much of this flexibility in control can be provided by means
of having alternative plans available for various probable
situations
26. Controls must be economical
• Any control device must meet the standard of economy, must, in
other words, be worth its cost.
27. Controls must be economical
• The expensive preparation, approval, and administration of complex
budgetary control programs may be a necessity for the large
enterprise, and well worth their cost, but may be uneconomical for
the small company.
• Likewise, a finance vice-president may feel that money has been well
spent in incurring many thousands of dollars in cost for careful
historical and forecast data on cash flow or capital investment, but in
the same company a much smaller expenditure might be too costly
for tracing the handling of scrap inventories.
28. Controls must be understandable
• Controls must meet the test of comprehension for the managers who
must use them. One of the problems encountered in some control
devices, especially those based upon mathematical formulas,
complex break-even charts, detailed analyses, and statistical
summaries, is that they are not understandable to the managers who
must use them.
• In some cases the manager would understand them if he would take
the time to learn the techniques involved. Clearly, a control system
that a manager cannot or will not understand is ineffective.
29. Controls must assure corrective action
• Thus an adequate control system should not only detect failures but
should disclose where they are occurring, who is responsible for
them, and what should be done to correct them.
30. References
• Principles of Management by Professor Dr. Md. Mainul Islam
University of Dhaka, Dr. Abdul Awal Khan Ex. Professor & Ex. Dean
School of Business Bangladesh Open University
• Koontz, H., O'Donnell, C., & Weihrich, H. (1986). Essentials of
management (Vol. 18). New York: McGraw-Hill.
• Prasad, L. M. (2020). Principles and practice of management. Sultan
Chand & Sons.
• Suri, R. K., & Chhabra, T. N. (2009). Managing Human Resource:
Techniques and Practices. Pentagon Press.