The document discusses the concept of controlling, which is the process of measuring performance against standards and taking corrective action when needed, and outlines the key steps in controlling including setting standards, measuring performance, comparing results, and taking action. It also describes various control systems and techniques used in organizations like management by objectives, quality control, inventory control, and breakeven analysis. Establishing an effective control system is important for achieving goals, revising plans, bringing order, and facilitating change.

1. Module: 05
Controlling

2. Module Coverage
1. Meaning and importance
2. Steps in controlling
3. Essentials of a sound control system
4. Methods of establishing control

3. Controlling
“What gets measured happens”
• What is
important to
know about the
control •What are
process? some
organizational
control
systems and
techniques?

4. Meaning of controlling
“Management control is the process by which
managers assure that resources are
obtained and used effectively in the
accomplishment of an organization’s
objectives”

5. Controlling
 Controlling is one of the four management
functions.
 Control begins with objectives and standards.
 Control measures actual performance.
 Control compares results with objectives and
standards.
 Control takes corrective action as needed.
 Control focuses on work inputs, throughputs, and
outputs.

6. Controlling
 Controlling
 The process of measuring performance and
taking action to ensure desired results

7. Characteristics
 Managerial Function
 Forward Looking
 Continuous activity
 Control is related to planning
 Essence of control is action
 Controlling is goal oriented
 Dynamic

8. Control Systems & Process or Steps
 Output Standard
 Measures performance results in terms of quantity, quality, cost, or
time.
 Input Standard
 Measures work efforts that go into a performance task

9. Types Of Control Systems
 Management By Exception
 Focuses attention on substantial differences
between desired and actual performance
 Feedforward Controls
 Ensure the right directions are set and the right
resource inputs are available f
 Concurrent Controls
 Ensure the right things are being done as part of
work-flow operations
 Feedback Controls
 Ensure that final results are up to desired standards

10. Types Of Control Systems

11. Organizational Control Systems and
Techniques
 Control focuses on work inputs, throughputs, and
outputs.
 Management by objectives integrates planning and
controlling.
 Employee discipline is a form of managerial control.
 Quality control is a foundation for Total Quality
Management.
 Purchasing and inventory controls help save costs.
 Breakeven analysis shows where revenues will equal
costs.

12. Management By Objectives
 MBO (Management By Objectives)
 A process of joint objective setting between
superior and subordinate

13. Employee Discipline
 Discipline
 is the act of influencing behavior through reprimand.
 Progressive Discipline
 ties reprimands to the severity and frequency of misbehavior.
MANAGEMENT TIPS
 “Hot stove rules” of employee discipline
 • Issue a reprimand immediately. A hot stove burns the first time you touch it.
 • Direct a reprimand toward someone’s actions, not their personality. A hot stove doesn’t
hold
grudges, humiliate people, or accept excuses.
 • Apply a reprimand consistently. A hot stove burns anyone who touches it, and it does so
every time.
 • Provide an informative reprimand. A hot stove lets a person know what to do to avoid
getting burned again: “Don’t touch.”
 • Give the reprimand within a supportive setting. A hot stove conveys warmth but with an
Inflexible rule: “Don’t touch.”
 • Support a reprimand with the relevant rules. The Don’t-touch-a-hot-stove rule isn’t a
power
play, a whim, or an emotion of the moment; it is a necessary rule of reason.

14. ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES
Quality Control
 Total Quality Management (TQM)
 commits to quality objectives, continuous improvement, and
doing things right the first time.
 Quality Circle
 is a small group that meets regularly to discuss ways of
improving work quality.
Four Absolutes of Quality Control
1. Quality means conformance to standards. Workers must know exactly what performance standards they are
expected to meet.
2. Quality comes from defect prevention, not defect correction. Leadership, training, and discipline must prevent
defects in the first place.
3. Quality as a performance standard must mean defect-free work. The only acceptable quality standard is perfect
work.
4. Quality saves money. Doing things right the first time saves the cost of correcting poor work.

15. ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES
Purchasing And Inventory Controls
 Purchasing Control
 buying what is needed at the right quality, at a good price, and
for on-time delivery.
 Supply Chain Management
 uses information technology to link suppliers and purchasers in
cost efficient ways.
 Inventory Control
 ensures that inventory is only big enough to meet immediate
needs.
 Economic Order Quantity
 places new orders when inventory levels fall to predetermined
points.
 Just-in-time Scheduling
 routes materials to workstations just in time for use.

16. ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES
Breakeven Analysis
 Breakeven Point
 is the point at which revenues equal costs
 Breakeven Analysis
 calculates the point at which sales revenues
cover costs.
How to Calculate a Breakeven Point
Breakeven Point = Fixed Costs / (Price - Variable Costs)

17. ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES
Breakeven Analysis

18. Overcoming Resistance to Control
1. Employee Participation
2. Justifiable Controls
3. Precise and Understandable Standards
4. Realistic Standards
5. Timely communication of findings
6. Accurate Findings
7. Assuring support
8. Positive reinforcement

19. Importance of Controlling
1.Achievement of goals
2. Execution and revision of plans
3. Brings order and discipline
4. Facilitates decentralization
5. Promotes coordination
6. Cope with uncertainty and change