CHAPTER 7:

CONTROLLING

LEARNING OBJECTIVES
After completing this chapter, students should be able to: Define controlling Explain the controlling process Identify the types of control Discuss the potential barriers to successful control Describe on how to make controlling successful

CHAPTER OUTLINE
Definition of control The controlling process Types of control Potential barriers to successful control Making controlling successful

DEFINITION Control making something happen the way it was planned to happen.

Controlling the process managers go through to control

Contd According to Roberto Mockler, controlling is a systematic effort by business management to : Compare performance to predetermined standards, plans or objectives To determine whether performance is in line with these standards and presumably to take any remedial action required To see that human and other corporate resources are being used in the most effective and efficient way possible in achieving corporate objective

Definition: Organizational Control

The systematic process through which managers regulate organizational activities to make them consistent with the expectations established in plans, and to help them achieve all predetermined standards of performance.

This definition implies that leaders must:

Establish performance standards Develop mechanisms for gathering performance information in order to assess the degree to which standards are being met.

Process of Control

Setting Standards for Performance Whenever possible, the standards should be set in a manner that allows them to be compared with actual performance. Measuring Actual Performance An organization must decide:What to measure. When to measure. How frequently to measure. Comparing Actual Performance with Standards This step involves determining if actual performance compared to standards falls within acceptable limits. Responding to Deviations If the deviation from performance is unacceptable, then corrective action is warranted. If the deviation is acceptable, no correction action is necessary.

Types of Control

Types of Control
There are 3 types of control and what type is used is determined primarily by the work phase in which the control is needed.

3 Types of Control
Preventive/ Feed Forward/ Steering Control Focuses on detecting undesirable material, financial, or human resources that serve as inputs to the transformation process. Concurrent/ Screening Control Focuses on the transformation process to ensure that it is functioning properly. Feedback/ Post Action/ Corrective Control Focuses on discovering undesirable output and implementing corrective action.

Types of Control

Multiple Focal Points Most organizations use several control systems focused on various phases of the transformation process.

Potential Barriers To Successful Control

Long-term versus short-term production Burdens to manager because they needs to ensure that planned performance and actual performance are equivalent in the short-term and long-term production quotas.

Employee Frustrations And Morale

When management exerts too much control and too rigid, employee morale tends to be low and frustrated because they think that there is no freedom for them to do a good job.

Perspective of organization members

Although controls can be designed to focus on relatively narrow aspects of an organization, manager must remember that prospective corrective action is not only relation to the specific activity being control but also relation to all other organization units.

Potential Barriers To Successful Control

Means versus ends Control activities are not the goals of the control process, they are merely the means to eliminating problems. Corrective actions are activities that can be justified only if they yield some organizational benefit that exceeds the cost of performing them.

Filing of reports

Employees may perceive that management is base on corrective action solely on department records with no regard for extenuating circumstances. If this is the case they may feel pressured to falsify records.

Criteria of Effective Control

Related to Organizational Strategy
A control system should measure what is important now and what will be important in the future not what was important in the past.

Utilizes All Steps in the Control Process

To be effective, a control system must employ all of the steps in the control process.

Composed of Objective and Subjective Measures

Effective control systems typically require managers to blend quantitative (objective) and qualitative (subjective) performance measures.

Criteria for Effective Control

Incorporates Timeliness in Feedback Reporting Timeliness is the degree to which the control system provides information when it is needed.

Acceptable to a Diverse Work Force

To be effective, organizational controls must be accepted by employees. The control system should motivate workers to recognize standards and act to achieve them.