This is a handout made for the Controlling Function of Management.

1. Controlling
It’s the process of monitoring, comparing, and correcting work performance. All
managers should control even if their units are performing as planned because they can’t
really know that unless they’ve evaluated what activities have been done and compared
actual performance against the desired standard. Effective controls ensure that activities are
completed in ways that lead to the attainment of goals. Whether controls are effective, then,
is determined by how well they help employees and managers achieve their goals.
Figure 1 shows the different aspects of the management functions wherein the
management cycle is also exhibited. This figure depicts the connection of Planning and
Controlling. Controlling identifies lapses or gaps of the executed plan or action.
Figure 1

2. The Control Process is a three-step process of measuring actual performance,
comparing actual performance against a standard, and taking managerial action to correct
deviations or to address inadequate standards.
The control process assumes that performance standards already exist, and they do.
They’re the specific goals created during the planning process.
Step 1. Measuring Actual Performance
 To determine what actual performance is, a manager must first get information about it.
HOW WE MEASURE.
Four approaches used by managers to measure and report actual performance are
personal observations, statistical reports, oral reports, and written reports.
Step 2. Comparing Actual Performance Against the Standard
 The comparing step determines the variation between actual performance and the
standard. Although some variation in performance can be expected in all activities, it’s
critical to determine an acceptable range of variation.

3. Step 3. Taking Managerial Action
 Managers can choose among three possible courses of action: do nothing, correct the
actual performance, or revise the standards.
1. Correct Actual Performance
Depending on what the problem is, a manager could take different corrective actions.
Example: An unsatisfactory work is the reason for performance variations, the manager
could correct it by things such as training programs, disciplinary action, changes in
compensation practices, and so forth. One decision that a manager must make is
whether to take immediate corrective action, which corrects problems at once to get
performance back on track, or to use basic corrective action, which looks at how and
why performance deviated before correcting the source of deviation.
2. Revise the Standard
It’s possible that the variance was a result of an unrealistic standard—too low or too high
a goal. In that situation, the standard needs the corrective action, not the performance.
Example: If performance consistently exceeds the goal, then a manager should look at
whether the goal is too easy and needs to be raised. On the other hand, managers
must be cautious about revising a standard downward.

4. Controlling Organizational Performance
 Organizational Performance
o the accumulated results of all the organization’s work activities.
 Organizational Productivity
o the amount of goods or services produced divided by the inputs needed to
generate that output.
 Organizational Effectiveness
o the measure of how appropriate organizational goals are and how well those goals
are being met.
 Tools for Measuring Organizational Performance
o Feedforward Control - The most desirable type of control prevents problems
because it takes place before the actual activity.
o Concurrent Control - This takes place while a work activity is in progress.
o Feedback Control - The control that takes place after the activity is done.

5. Financial Controls
Information Controls
A management information system (MIS) is a system used to provide managers with
needed information on a regular basis. In theory, this system can be manual or computer-
based, although most organizations have moved to computer-supported applications. The
term system in MIS implies order, arrangement, and purpose. Further, an MIS focuses
specifically on providing managers with information (processed and analyzed data), not
merely data (raw, unanalyzed facts).
For example, a library provides a good analogy. Although it can contain millions of
volumes, a library doesn’t do you any good if you can’t find what you want quickly. That’s why
librarians spend a great deal of time cataloging a library’s collections and ensuring that
materials are returned to their proper locations.

6. CASE APPLICATION: Baggage Blunders
Terminal 5 (T5), built by British Airways for $8.6 billion, is London Heathrow Airport’s newest state-
of-the-art facility. Made of glass, concrete, and steel, it’s the largest free-standing building in the United
Kingdom and has more than 10 miles of belts for moving luggage. At the terminal’s unveiling in March
of 2008, Queen Elizabeth II called it a “twenty-first-century gateway to Britain.” Alas . . . the accolades
didn’t last long! After two decades in planning and 100 million hours in manpower, opening day didn’t
work out as planned. Endless lines and major baggage handling delays led to numerous flight
cancellations stranding many irate passengers.
Airport operators said the problems were triggered by glitches in the terminal’s high-tech
baggage-handling system. With its massive automation features, T5 was planned to ease congestion
at Heathrow and improve the flying experience for the 30 million passengers expected to pass through
it annually. With 96 self-service check-in kiosks, more than 90 fast check-in bag drops, 54 standard
check-in desks, and miles of suitcase-moving belts estimated to be able to process 12,000 bags per
hour, the facility’s design seemed to support those goals.
However, within the first few hours of the terminal’s operation, problems developed. Presumably
understaffed, baggage workers were unable to clear incoming luggage fast enough. Arriving
passengers waited more than an hour for their bags. Departing passengers tried in vain to check in for
flights. Flights left with empty cargo holds. Sometime on day one, the airline checked in only those
passengers with no luggage. And it didn’t help that the moving belt system jammed at one point.
Lesser problems also became apparent: a few broken escalators, some hand dryers that didn’t work,
a gate that wouldn’t function at the new Underground station, and inexperienced ticket sellers who
didn’t know the fares between Heathrow and various stations on the Piccadilly line.
By the end of the first full day of operation, Britain’s Department of Transportation released a
statement calling for British Airways and the airport operator BAA to “work hard to resolve these issues
and limit disruptions to passengers.” You might be tempted to think that all of this could have been
prevented if British Airways had only tested the system. But thorough runs of all systems “from toilets to
check in and seating” took place six months before opening, including four full-scale test runs using
16,000 volunteers.
Although T5’s debut was far from perfect, things have certainly changed. A recent customer
satisfaction survey showed that 80 percent of passengers waited less than five minutes to check in.
And those passengers are extremely satisfied with the terminal’s lounges, catering, facilities, and
ambience. It’s a nice ending to the chaotic beginning.