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TOPIC 7

CONTROLLING

Nature of Control
Definition:- The regulation of organizational
activities to facilitate goal attainment.
How does control help the manager?
- An effective control system ensures
that activities are completed aligned to
organization’s goals.
- Without control, organizations have no
indication of how well they are
performing in relation to their goals.

Controlling Definition:. .a process to ensure that actual activities conform to planned activities.a process of monitoring performance and taking action to ensure desired results. .

The Importance/Purpose of Control Adapt to environmental change Limit the accumulation of error Control helps the organization Cope with organizational complexity Minimize costs .

Adapt to environmental change - changes between the time when goals were set and time for implementation. 2.The Importance/Purpose of Control 1. . Limit the accumulation of error - small mistakes can seriously damage the financial condition of an organization if left/ accumulated without solution. monitor and respond to changes. .control can help reduce small mistakes to recur.help managers to anticipate. .

4. Minimize costs .i.control is helpful for organization with complex structure.when control is practiced effectively. complicated organizational design. . Cope with organizational complexity .The Importance/Purpose of Control 3.e.: merger of large firms. it can reduce costs and boost output (less mistakes and error) .

Controlling Process .

Steps in the Control Process • Step 1: Establish Standard – A control standard is a target against which subsequent performance will be compared • i. food quality and restaurant cleanliness .e. empty table will be cleaned within 5 min after being vacated – Standards established for control purposes should be expressed in measurable terms – Control standard should be consistent with organization’s goals • i. Employees at Taco Bell work toward the following standards: – A min of 95% of all customers will be greeted within 3 min of their arrival. Taco Bell goals involving customer service.e.

– Measurement must be valid i. weekly. or volume produced • Employee’s performance is measured in terms of quality or quantity of output – Valid performance measurement is vital in maintaining effective control . • Daily.e. monthly sales figures measure sales performance • Productivity performance may be expressed in terms of unit cost.Steps in the Control Process • Step 2: Measuring Performance – Performance measurement is a constant. product quality. ongoing activity for most organizations.

therefore analysis should be conducted and remedial action must be taken .Steps in the Control Process • Step 3: Compare Performance Against Standard – Comparing measured performance against established standards – If performance is lower.

Steps in the Control Process • Step 4: Determine Need for Corrective Action – The need for corrective action – After comparing performance against control standard. one of three actions is appropriate: • Maintaining the status quo (do nothing) • Correct the deviation • Change the standard .

cheque clearing (to get confirmation from the person issuing the cheque) • Post-Action Control (Corrective Control) – Controlling takes place after an action is completed – If there is problem. direct supervision-oversees wrong doing of an employee-correct them immediately-before much damage/waste • Screening Control (Yes or No Control) – Specify check points that must be successfully passed before an activity proceeds further – Before proceeding to the next sequence. product or service must be approved or meet specific conditions – i. an activity. corrective action is taken and applied to future activities .e.Types of Control • Feedforward Control (Pre-Action Control) – Control that focuses on preventing anticipated problems before they arise – i.e. have several interviews-to choose highly skilled people. screening job applicants-view their resume.lessens the chances of hiring less skilled people • Concurrent Control (Steering Control) – A control that takes place while work activity is in progress – i.e.

Strategic & Result Oriented – • Info must be collected and evaluated quickly to enable managers to solve problems on time. reasonable.Characteristics of Effective Control • Accuracy – • Timeliness – • An effective control system should suggest what action to be taken when deviation occurs Economy – • Must be exercised at all level of management and obtainable by all levels of employees Corrective Action – • Leaves room for modification to fit new circumstances Consistent with Organization’s Structure – • Control system should be designed to measure what is important now and in the future Flexibility – • Standard must be understandable and measurable. Objective and Comprehensive – • Information needed for controlling must be accurate. Economical to operate Reasonable Criteria – Logic. attainable .

Effective Control System Timeliness Consistent with org’s structure Economy Flexibility Accuracy EFFECTIVE CONTROL SYSTEM Corrective Action Objectivity Strategic & Result Oriented Reasonable Criteria .

• Too much accountability – People who do not want to be answerable for their mistakes or who do not want to work as hard as their boss might resist control. • Over-control – Organization try to control too many things – Limiting individuals job autonomy.Barriers to Successful Control • Game Playing – Managers attempt to improve their standing by manipulating resources usage. • Under-control – Granting a lot of autonomy to individualsorganization losses its ability to direct individuals effort towards achieving organization’s goal. . • Inappropriate focus – Control system may be narrow or focus too much and leave no room for analysis.

• Develop verification Procedures – Verification procedures need to be developed to provide checks and balances in order for managers to verify the accuracy of performance indicators. .How Can Resistance to Control Be Overcome? • Encourage Employee Participation – When employees are involved with planning and implementing the control system. they are less likely to resist.

All rights reserved. Timely • Must provide timely information.Characteristics of Effective Control System 1. 18–17 . Information must be collected and evaluated quickly to enable managers to solve problems on time. The best information has little value if is dated © 2007 Prentice Hall. Inc. An accurate control system is reliable and produces valid data 2. Accuracy (information) • A control system that generates inaccurate information can result in management’s neglecting to take action when it should or responding to a problem that does not exist.

All rights reserved.Characteristics of Effective Control System 3. Inc. 18–18 . Flexibility • Must be flexible enough to adjust to adverse change or to take advantage of new opportunities 4. Objective & Comprehensive • The control system should provide information that is as objective and comprehensive as possible © 2007 Prentice Hall.

All rights reserved. © 2007 Prentice Hall. If they are too high or unreasonable. Inc.Characteristics of Effective Control System 5. they no longer motivate. A control system that is difficult to understand can cause unnecessary mistakes. frustrate employees. Understandable & reasonable • Standard set in the control system must be understood by all members of the organization. and eventually be ignored • Control standard must be reasonable and attainable. 18–19 .

Acceptable by organizational members • Should be able to motivate workers to recognize the importance of standards and engage themselves in an appropriate behavior to achieve them. 18–20 . All rights reserved. Consistent with organization’s structure • Controlling must be exercised at all levels of management and must be obtainable by all levels of employees who work within the organization © 2007 Prentice Hall. Inc.Characteristics of Effective Control System 6. The more committed the employees to the control system the more successful the organization will be 7.

Focused on strategic control points • The control system should be designed to measure what is important now and what will be important in the future and not what was important in the past 9. Inc. Omitting any of these steps will fracture the overall control system and the future of the organization will be doubtful © 2007 Prentice Hall.Characteristics of Effective Control System 8. Utilize all steps of the control process • An effective control system should not ignore any one step of the controlling process. All rights reserved. 18–21 .

Corrective action • An effective control system should be able to suggest what action to be taken to correct deviations and also indicates when a deviation from standard occurs. 18–22 .Characteristics of Effective Control System 10. Any problem detected should come up with appropriate solutions © 2007 Prentice Hall. All rights reserved. Inc.

EXTRA NOTES • Reliability of a control tool. or system. is the same thing as the reliability of a test used to select the best candidate for a job. .