This document provides an overview of controlling in management. It defines controlling as comparing actual performance to standards to ensure activities are happening according to plan and taking corrective actions for any deviations. The document outlines the types, principles, importance, steps, elements, benefits, and evidence of controlling from primary Islamic sources and the Quran. Examples of controlling in a company that sells motorcycles on credit are also provided.

1. CHAPTER 7
CONTROLLING
By: Dr. Mohd Adib Abd Muin
Islamic Business School (IBS), UUM
mohdadib@uum.edu.my
BIMS1043 Principles of Management in Islam 1

2. Outline
• Introduction
• Definition
• Types of Controlling
• Principles of Controlling
• Importance of Controlling
• Steps of Controlling
• Elements of Controlling
• Benefit of Controlling
• Evidence of Controlling (Al-Quran)
• Example
• Approach
• Method
• Acivity
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3. Introduction
Definition:
 Controlling is the process of comparing the actual performance with the
standards set by the company to ensure that all the activities are
happening according to the plan and if any deviations are found, then
corrective action needs to be taken.
 Process that directs the activities of individuals toward the achievement of
organizational goals.
 Controlling means to make sure that the activities in an organisation are
performed as per the plans. The controlling function finds out how far
actual performance deviates from standards. It analyses the causes of such
deviations and attempts to take corrective actions based on the same.
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4. Definition
• “Controlling is determining what is being
accomplished that is evaluating the performance
and, if necessary, applying corrected measures so
that the performance takes place according to
plans.” In Terry's view, controlling helps in proper
implementing of plans.
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5. Cont…
• In management, Controlling is one of the most important functions in
an organization which is goal-oriented.
• Types of Control techniques in management are Modern and
Traditional control techniques.
• Feedforward, feedback and concurrent controls are also types of
management control techniques.
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6. Type of Controlling
There are two types: preventive and detective
controls.
Both types of controls are essential to an effective
internal control system.
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7. Principles of Controlling
There should be a connection between the nature and aim of controlling and its controlling
principles. The following are a few of the guiding principles in controlling:
• To discover the root reasons for deviations from established goals, a management control system
should be as cost-effective as possible.
• An organization's structure and purpose must be considered while designing a control system.
• An organization's structure and goals should be reflected in a control system's design.
• Management bears the major duty of ensuring that the company's strategic plans are carried out
according to the principle of control responsibility.
• The principle of control individuality states that each manager's control is tailored to the specific
needs of the management exerting it.
• Using the principle of action - control is only justified if it results in a positive change to any
deviation.
• Establishing a set of uniform standards for the organization is essential to monitor its operations
effectively. Accurate and objective standards should be used to set the parameters.
• Assuring the achievement of organizational goals is at the heart of the guiding principle.
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8. Importants of Controling
The important characteristics of controlling are:
• Maintaining control is not a one-time endeavor; it requires regular
evaluation and revision of performance criteria.
• Goal-oriented: Controlling is focused on accomplishing organizational
goals or specific strategies.
• Dynamic processes such as controlling necessitate adaptable controls
to changing conditions.
• Strategic, tactical, and operational control can be found at the highest
levels of management and in the organization's middle and lowest
levels.
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9. A) Steps the Controlling Process
The control function can be viewed as a five-step process:
(1) Establish standards,
(2) Measure performance,
(3) Compare actual performance with standards and identify any
deviations,
(4) Determine the reason for deviations, and
(5) Take corrective action if needed.
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10. B) Steps the Controlling Process
Below are the steps that make up the control process.
• Standards are the plans or goals that must be met to run a business effectively. Based on historical
experiences, statistical research, and best industry practices, the benchmarks against which actual
performance is measured are developed and refined. To put it another way, they can be physical or
immaterial.
• Measuring actual performance - depending on the organization's performance standards, measuring
performance can be done several ways. Success evaluations, financial audit reports, sales reports,
production statistics, and customer satisfaction are just a few of how a company's performance can be
evaluated.
• Checking actual performance against standards or plans to ensure that it is in line with intended goals is
known as a comparison of performance with the standard. During this stage, any deviations from the
established standards might be detected by management. A deviation is a discrepancy between actual
results and the plan's expectations. There must be a clear understanding of the scope and source of the
divergence. Erroneous planning, sloppy coordination, poor execution of plans, or a lack of good
management and communication are some common causes of deviation.
• This is the final stage of controlling: implementing a solution to the problem. Corrective action is conducted
to ensure the variation is rectified when performance is analyzed and variances are discovered. To avoid
unintended consequences and allow for effective corrective action, potential or actual deviations from plans
should be discovered as early as possible. The goal of quality control must be more than just identifying
deviations.
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11. Elements of Controlling
Elements of a Good Control System
• Feedback.
• Control must be objective.
• Prompt reporting of deviations.
• Control should be forward-looking.
• Flexible controls.
• Hierarchical suitability.
• Economical control.
• Strategic control points.
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12. Benefits of Controlling
Benefits Of Controlling
• Ensures Performance According to Pre-determined Standards and
Goal.
• Rescues and Provide Ways and Means for the Information Flow.
• It improves efficiency by saving time, money and energy.
• It aids coordination among all activities by regulating them.
• It helps in forward looking to achieve goals.
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13. Evidence from Al-Quran
• The foundation of control was stated in Islam in a very simple and
concise manner. Surah Al Qasas stated that “Allah is merciful and
just. He does not destroy or degrade people until they have
deliberately rejected His law and continued in practice of inequity.”
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14. Evidence From Primary Sources
“Dan dengan cara yang sungguh layak serta berhikmat Kami
turunkan Al-Quran, dan dengan meliputi segala kebenaran ia
diturunkan; dan tiadalah Kami mengutusmu (wahai Muhammad)
melainkan sebagai pembawa berita gembira (bagi orang-orang yang
beriman) dan pembawa amaran (kepada orang-orang yang ingkar)”
(Translated from Al-Israa 17:105)
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15. Cont..
• The most important function of controlling is to compare actual
performances with expected results.
• This, in turn, helps managers understand where they are lacking and
how they can improve their performances.
• Using this knowledge, managers can use all available resources
optimally and prevent their wastage.
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16. Example of Controling
• Managing a company that sells motorcycles on credit is an example of
controlling in management.
• The step process of management's regulating function includes:
• Setting work performance standards.
• Monitoring actual performance.
• Comparing actual performance to the set standards.
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17. Steps in Control Process
Set Performance Standards
Measure Actual Performance
Compare Actual Performance with
Standards
Take Correction Action
Take No Correction Action
If deviations are unacceptable
If no deviations or if deviations are
acceptable
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18. Approaches To Controlling Activity
Company provides a
basic law for checks
on activities an
performance
Basic for exercising
control on activities of
the individual in the
organizational
Demand and supply
are used for exerting
pressure on business
behavior
Legal
Approach
Social
Approach
Market
Approach
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19. Method in the Control Process
1. Policies and Plans
2. Effectiveness of Delegation
3. Operational Effectiveness
4. Quality and Quantity Controls
5. Expenditure Control
6. Reporting
7. Budgetary Control
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20. Activity 7
1. Choose one of your best friend
2. Ask HOW she/he control their weakness
3. Complete this Activity 7 through Online Learning
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