Controlling is the process of monitoring performance, comparing it to standards, and taking corrective actions. It ensures activities are completed to accomplish organizational goals. Control is important for several reasons: it lets managers know if goals and plans are on target; it provides feedback on employee performance; and it enhances security and minimizes disruptions. The control process has three steps: 1) measuring actual performance using various reports and observations, 2) comparing performance to standards to identify deviations, and 3) taking corrective actions such as changing strategies, structures, or training if deviations are significant. Organizational performance can be controlled using activity-based controls that provide feedback or concurrent monitoring, or system-based controls like market, bureaucratic

1. What is controlling?
Controlling is the process by which a person – a group – an organization consciously
monitoring (measuring) the actual performance of employees, comparing it with
standards (goals) and take corrective actions.
The Purpose of Control
To ensure that activities are completed in ways that lead to accomplishment of
organizational goals.
Why Is Control Important?
As the final link in management functions:
Planning:-
Controls let managers know whether their goals and plans are on target and what
future actions to take.
Empowering employees:-
Control systems provide managers with information and feedback on employee
performance.
Protecting the workplace:-
Controls enhance physical security and help minimize workplace disruptions.
The Planning–Controlling Link
The Control Process
Control process as the three-step process of measuring actual performance, comparing
it against a standard, and taking managerial action to correct deviations or inadequate
standards.

2. 1. Measuring actual performance
How we measure is done through four common sources of information that managers
use.
Personal observations
Statistical reports
Oral reports
Written reports
What we measure is probably more critical than the how. Both objective and subjective
measures are used.
Employees
Satisfaction
Turnover
Absenteeism
Budgets
Costs
Output
Sales
For example, if sales growth is a target, the organization should have a means of
gathering and reporting sales data.
Common Sources of Information for Measuring Performance

3. 2. Compare performance with the standards
This step determines the degree of variation between actual performance and the
standard.
It’s critical to determine the range of variation, which are the acceptable parameters of
variance between actual performance and the standard.
When managers read computer reports or walk through their plants, they identify
whether actual performance meets, exceeds, or falls short of standards.
3. Take corrective actions
When performance deviates from standards, managers must determine what changes, if
any, are necessary and how to apply them.
Managers can choose among three possible courses of action:
“Doing nothing”
Only if deviation is judged to be insignificant
Correcting actual (current) performance
Two types of actions managers take
 Immediate corrective action to correct the problem at once
 Basic corrective action to locate and to correct the source of the deviation
 Corrective Actions
Change strategy, structure, compensation scheme, or training programs;
redesign jobs; or fire employees
Revising the standard
Examining the standard to ascertain whether or not the standard is realistic, fair, and
achievable
Upholding the validity of the standard
Resetting goals that were initially set too low or too high

4. Managerial Decisions in the Control Process
Controlling for Organizational Performance
What Is Performance?
The end result of an activity
What Is Organizational Performance?
The accumulated end results of all of the organization’s work processes and activities
Designing strategies, work processes, and work activities.
Coordinating the work of employees
Tools for Controlling Organizational Performance (Types of Control)
Activity-Base Control System
System-Base Control System
Activity-Base Control System
Feed-forward Control
A control that prevents anticipated problems before actual occurrences of the problem.
 Building in quality through design.
 Requiring suppliers conform to ISO 9002.
Concurrent Control
A control that takes place while the monitored activity is in progress
The best known form of concurrent control is Direct supervision (management
by walking around), which describes a manger.
Feedback Control
A control that takes place after an activity is done.
Corrective action is after-the-fact, when the problem has already occurred.
Advantages of feedback controls
Feedback provides managers meaningful information about how effective their
planning efforts have been.
Feedback enhances employee motivation by providing them with information on
how well they are doing.

5. System-Base Control System (Designing Control Systems) (Methods of Control)
There are three different approaches to designing organizational control systems.
Market (Auto-Curacy) Control
Emphasizes the use of external market mechanisms to establish the standards used in
the control system.
 External measures: price competition and relative market share
Bureaucratic Control
Emphasizes organizational authority and relies on rules, regulations, procedures, and
policies.
Clan (Democratic) Control
Regulates behavior by shared values, norms, traditions, rituals, and beliefs of the firm’s
culture.

6. Goal-Setting Theory says that specific goals increase performance, and difficult goals, when
accepted, result in higher performance than easy goals. What do we know about goals as
motivators?
1. Intention to work toward a goal is a major source of job motivation. Specific and challenging
goals are superior motivating forces. Specific hard goals produce a higher level of output than do
generalized goals.
2. Is there a contradiction between achievement motivation and goal setting? No, and here’s
why.
a. Goal-setting theory deals with people in general; achievement theory is based only on people
who have a high need for achievement. Difficult goals are still recommended for the majority of
employees.
b. The conclusions of goal-setting theory apply to those who accept and are committed to the
goals.
Difficult goals will lead to higher performance only if they are accepted.
3. Will employees try harder if they participate in the setting of goals?
a. We can’t say that participation is always desirable.
b. However, participation is probably preferable to assigning goals when the manager expects
resistance.
4. Will people do better when they get feedback on how well they’re progressing toward their
goals?
a. Feedback acts to guide behavior.
b. Self-generated feedback has been shown to be a more powerful motivator than externally
generated feedback.
5. What contingencies exist in goal-setting theory? There are four contingencies we need to
know about.
a. Feedback influences the goal-performance relationship.
b. Goal commitment is another contingency. Commitment is most likely to occur when goals are
made public, when the individual has an internal locus of control, and when the goals are self-set
rather than assigned.
c. Self-efficacy is another contingency and refers to an individual’s belief that he or she is
capable of performing a task. The higher your self-efficacy, the more confidence you have in
your ability to succeed in a task.
d. The last contingency that affects goal setting is national culture.
6. Our conclusion about motivation from goal-setting theory is that intentions, as defined by hard
and specific goals, are a powerful motivating force.
a. In the proper conditions, they can lead to higher performance.
b. However, there’s no evidence that such goals are associated with increased job satisfaction.
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• Need
 An internal state that makes certain outcomes appear attractive
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