The document discusses the concept of controlling as a management process that involves regulating organizational activities so actual performance meets standards and goals. It defines controlling and explains its significance and relation to other management functions like planning, organizing and directing. The document also outlines the roles of controls, levels of control, steps in the control process, managerial approaches to implementing controls, and characteristics of an effective control system.

1. CONTROLLING
GROUP 1
EUNICE SANCHEZ
LAUREN VILLEGAS

2. Outline:
1) Control as a Management Process
• Meaning of Controlling
2) Significance of Control Process
• Its relation to Planning, Organizing, Directing and Staffing
• Definition of Control System
• Purpose of Control System in a firm
3) Role of Controls
• Coping with Uncertainty
• Detecting Irregularities
• Identifying Opportunities
• Handling Complex Situation
4) Levels of Control
• Strategic Control
• Tactical Control
• Operational Control
5) Steps of Control Process
• Determine areas to control
• Establish Standards
• Measure Performance
• Compare Performance
• If Standards are met, recognize performance
• If Standards are not met, take corrective action
• Adjust Standards and measures as necessary
6) Managerial Approaches to Implementing Controls
• Market Control
• Bureaucratic Control
• Clan Control
7) Characteristics of an Effective Control System
• Future Oriented
• Multidimensional
• Cost Effective
• Accurate
• Realistic
• Timely
• Monitorable
• Acceptable to Organization Members
• Flexible

3. 1) Control as a Management Process
We define management as the process of regulating organizational activities so that actual
performance conforms to expected organizational standards and goal. As the definition suggests,
controlling means that managers should verify whether everything occurs in conformities with the
plans adopted, instructions issued and principles established. It also ensures that there is an efficient
and effective utilization of organizational resources so as to achieve planned goals and standards.
2) Significance of Control Process
• Its relation to Planning, Organizing, Directing and Staffing
Controlling function has a relation to the other functions of management: planning,
organizing, directing, and staffing. It builds more directly to planning, by providing the means of
monitoring and making adjustments in performance, plans can be realized. Plans can be made by
what controlling does in such activities in the firm. Still, controlling also supports organizing by
helping ensure that resources are channeled toward organizational activities. For example, feedback
from the control process might signal the need to reorganize, provide more training to workers or
clarify communication. Also, with directing, controlling affects this function, thru controlling,
managers would know what to instruct, guide and oversee to achieve predetermine goals. For
instance, managers will know which is need to have more guidance in terms of performance to
achieve high quality of products after controlling determines that workers who are assigned in the
quality assurance are in need of strict guidance to ensure high quality of products. Lastly, it also has
relation to staffing. By means of controlling firms will know if there is a need to hire more people,
reassign workers and change schedules or workers.
• Definition of Control System and Purpose of Control System in a firm
Control System is a set of mechanisms that are designed to increase probability of meeting
organizational standards. Control system can be also called as the game plan. It can be developed to
regulate any area that a manager considers important. Control system is strictly followed by
employees to achieve high quality of products and service, quantity produced, resources expended,
profit margins, client satisfaction, and other specific activities in the firm.
3) Role of Controls
• Coping with Uncertainty
Uncertainties or problems arise because not all things always go according to plan. Different
factors in the environment typically bring about changes in such areas as customer demand,
availability of resources, and technology. By developing control systems, managers are able to
monitor specific activities and react quickly to significant changes in the environment.

4. • Detecting Irregularities
Control systems also help managers detect undesirable irregularities that might affect the
name of the business, product defects, or rising personnel turnover. Early detection helps firms to can
save a great deal of time and money preventing minor problems to become major ones. It also
avoids problems that are difficult to rectify.
• Identifying Opportunities
It highlights situations in which things are going better than expected, which alerts
management to possible future opportunities.
• Handling Complex Situation
As firms grow larger or engage in more complex operations and projects, controls enhance
coordination. Controls help manager to keep in track of various elements to be sure that they are
well synchronized.
4) Levels of Control
• Strategic Control
Strategic control involves monitoring critical environmental factors that could affect the
viability of strategic plans, assessing the effects of organizational strategic actions, and ensuring that
strategic plans are implemented as intended. The one who is usually concern is the top-level
managers, who generally take an organizationwide view or perspective. They often concentrate on
long time frames, such as quarterly, semiannual or annual reports. However, if environment is
unstable or there is a keen competition, managers use shorter reporting cycles for strategic control.
• Tactical Control
A control that focuses on accessing the implementation of tactical plans at department levels,
monitoring associated periodic results, and taking corrective actions as necessary. It involve middle
management who are concerned with department-level objectives, programs, and budgets and who
concentrate mid-term time frames and often use weekly and monthly reports. Middle managers are
likely to engage in strategic control because they escalate information to top-level management on
strategic issues.
• Operational Control
Operational control involves overseeing the implementation of operating plans, monitoring
day-to-day results and taking corrective action when required. Lower-level managers has a large
responsibility in this control, they are more concerned on rules, specific outputs, and schedules
normally associated with individuals. Managers in the operational control give feedbacks about what
is happening in the very near term to achieve both short- term and long-term goals.

5. 5) Steps of Control Process
• Determine areas to control
Determining areas to control is the first major step in the control process. Manager must
make wise choices or decision because it is expensive and impossible to control every aspect of
organization’s activities. Prioritizing is important in this steps, managers should know which to
prioritize in which the organization will earn more profit, gain more consumer and will avoid loses.
• Establish Standards
Second step in the control process is establishing standards. Every firm has its own standard
or criteria for evaluating performance and related employee behaviors. There are requirements,
characteristics that an employee should have that will become an asset to the company. Standards
are also set to provide excellent customer service, quality products and to achieve organizational
goals.
• Measure Performance
Once standards are set, the next step is to measure performance. Managers should decide
how to measure performance and how often to do so. Measuring standards depends on the standards
set, but may also include such data as units produced, amount of materials used, or stores opened.
After managers measure performance they will then identify the opportunities of its employees,
products or services and branches.
• Compare Performance
This step is consists of comparing the performance measured with the standards established.
Managers often base their comparisons on the information provided in the reports that summarize
planned versus results. Reports may be verbal, written or by computerized process. Through
technology, reports are escalated up-to-the-minute.
• If Standards are met, recognize performance
If standards are met, there is usually no corrective action to be done. Managers usually give
out incentives like, bonuses, substantial rewards or pay raises. Having these incentives or these types
of recognitions motivates employees to work harder or be competitive in terms of ranking or aiming
for higher positions. It also encourages further improvements.
• If Standards are not met, take corrective action
If standards are not met, managers must carefully assess or investigate the reasons why and
must take corrective actions. Evaluation of performance should be done to make sure that they are
still realistic. Sometimes, managers don’t do corrective actions, because standards may also be
inappropriate because of changing in conditions.

6. • Adjust Standards and measures as necessary
Control is a dynamic process. As a result, managers need to check standards periodically to
ensure that standards and performance measures are still relevant for the future. Standards may be
changed due to circumstances have changed. Adjustments are also necessary depending upon the
reports of the different levels of management. Managers may raise their standards for future efforts
or may lower down their standards because some standard may consume too many resources.
6) Managerial Approaches to Implementing Controls
• Market Control
A managerial approach that relies on market mechanisms to regulate prices for certain
clearly specified goods and services needed by an organization. To use market control, there must be
a reasonable level of competition in goods and services and it must also be possible to specify
requirements clearly. Without bidding and specifications, purchasing agents may expend more time
and effort attempting to control costs.
• Bureaucratic Control
A managerial approach that relies on regulation through rules, policies, supervision,
budgets, schedules, reward systems, and other administrative mechanisms aimed at ensuring that
employees exhibit appropriate behaviors and meet performance standards. These approach follows
a procedure, rules or policies. Employees should always comply to avoid sanctions.
• Clan Control
Clan control relies on values, beliefs, traditions, corporate culture, shared norms, and
informal relationships to regulate employee behaviors and facilitate the reaching of organizational
goals. It has greater emphasis on internal motivation. With clan control, managers concerted effort
to encourage participation and ideas from everyone.
7) Characteristics of an Effective Control System
• Future Oriented
To be effective, control systems need to forecast future events, rather than developing a
resolution after knowing problems in the firms. With control system, the firm may prevent future
problems or uncover unforeseen opportunities that might be developed.
• Multidimensional
Control systems need to be multidimensional or should consider every aspect that might
affect the firms whether about production, its employees or its resources and to capture major
relevant performance factors.

7. • Cost-Effective
The cost of controls is an important consideration. A firm may invest more money on such
activities but the benefits should outweigh the costs.
• Accurate
Since controls provide the basis for future actions, accuracy is vital. Every information
escalated to top managers should be accurate in order for them to regulate such standards, rules,
policies that will highly affect the entire organization.
• Realistic
Control systems should incorporate realistic expectations about what can be accomplished.
Standards established should have a clear and definite reasons why it was set or it should be
reasonable.
• Timely
Control systems are designed to provide data on the state of a given production cycle. It
should be timely or submitted at a specific time for the managers and employees respond promptly
to irregularities.
• Monitorable
Control systems should be monitorable to ensure that they are performing as expected. If
control systems are monitorable it will be easier to determine which areas to improve.
• Acceptable to Organization Members
Control system operates best when the are accepted by organization members. Otherwise,
members may sabotage or override controls. Control system should always give a win-win result to
managers and members.
• Flexible
Control systems should be flexible enough to meet new or revised requirements. They should
be designed so that they can be changed quickly to measure and report new information.