CONTROLLING

CHAPTER 9
TOPIC 9: CONTROLLING
LEARNING OUTCOMES

1. Explain the term controlling and the main purpose of control;

2. Describe the steps involved in the control process;
3. Describe the different forms of control; and
4. Analyse the perspectives and activities that need to be controlled
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DEFINTION
Any process that directs the activities of individuals toward the
achievement of organizational goals.

It involves comparing actual performance to expected

performance through the following activities:
 Planning objectivities;
 Designing information feedback systems;
 Comparing true performance with fixed standards; and
 Ensuring that organizational activities are running according
to plan.
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Why controlling is important?
Some examples why it is important:
a. Quality Assurance
b. Preparation to Face Changes
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Signs of lack of control in companies:

Source: Batement & Shell, 2015. Management: Leading and collaborating in a competitive world
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HOW TO CONTROL? If distortion
is accepted
STEPS IN THE CONTROL PROCESS
Do not take
corrective
actions
Establishing the Comparing true
Measuring the
performance performance to
actual standard
standard standard
Take corrective
actions

If distortion is
not accepted
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STEP 1: Establishing Standards
 Standard can be defined as what is required out of a particular job or an individual. In
management control, standards are usually derived from the objectives. Standards should
be easy to be measured and interpreted.
Standards can be set with respect to:
 physical standard such as quantity and quality of products and services, number of
customers;
 financial standard which is stated in the form of money, and this includes labour cost, sales
cost, material cost, sales revenue, profit margin and others; and lastly,
 time standard which includes the performance rate of a particular task or the time period
required to complete a particular task
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Step 2: Measuring Performance
• Performance measurement is a type of control. Actual results need to be
monitored to ensure that output produced is according to the specific
standard.
• The main purpose of performance monitoring is to gather data and detect
deviation and problem areas.
• These can be done through: written reports, oral reports and personal
observation.
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Step 3: Making Comparisons
• Manager evaluates and compare the performance.

• Comparison of standard is a process where comparison is made between the

true performances with the standard set.
• This step is important because it allows any deviation or distortion to be
detected and corrective actions can be taken in order to achieve the goals that
have been set.
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Step 4: Corrective Actions

• Detailed analysis must be carried out in order to find out the factors that
caused the particular deviation before taking any corrective actions.
• This corrective action may involve change in one or more operation activities of
the organization such as modification, repairing of machines, preparation of
certain courses and others, or it might also involve a change in the fixed
standard.
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BASIC TYPES OF CONTROL

Input Transformation Output

FUTURE CONTROL CONCURRENT CONTROL FEEDBACK CONTROL

Predicting problems before it Managing problems when it Managing problem after
takes place happens it has happened

Examples: policies, Focuses on the use of

Examples: directing,
procedures, and rules information about
monitoring, and fine-
designed to ensure that previous results to
tuning activities as they
planned activities are correct deviations from
are performed
carried out properly the acceptable standard
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FORMS OF CONTROL

Bureaucratic Control

Objective Control

Normative Control

Concertive Control

Self Control
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Factors that need to be controlled

Finance Draw up budgets

Human resource Staff attendance, performance and

compensation

Internal operations Measure quality of processes and products

Customers Ensure customers are satisfied with services and

products
 SUMMARY
• Explain the term controlling and the main purpose of
control;
• Describe the steps involved in the control process;
• Describe the different forms of control; and
• Analyse the perspectives and activities that need to be
controlled