What is controlling?

Controlling is the process of comparing the actual performance with the standards set by
the company to make sure that activities are performed accordingly, if not, then take
appropriate measures to correct them

Example:
• Top-level manager will control the actions of a middle-level manager
• Low-level manager is answerable to a middle-level manager.
 Importance of controlling

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.
 Process of controlling
The controlling process contains the three-step methods

• Measuring

• Comparing
• Taking managerial action
 Measuring

The measurement of performance can be done in several ways, depending on

the performance standards including
• financial statements
• sales reports
• production results
• customer satisfaction
• formal performance appraisals.
 Comparing

The comparing step determines the degree of variation between actual

performance and standard. If the first phases have been done well, the
phase of the controlling process – comparing performance with
standards – should be straightforward.
 Taking managerial action

Management action is a course of action that is reasonably open to a

manager to support and correct situations of employee conflict, poor
performance or unacceptable behaviours at the earliest possible
opportunity.
 What is organizational performance?

Organizational Performance is the end result of an activity. Managers are

concerned with organizational performance; the accumulated end results of
all the organization’s work processes and activities.
 What are the measures of organizational
performance?
Employees need to see the connection between what they do and the
outcomes.
The most frequently used organizational performance measures include
• Organizational productivity
• Organizational effectiveness
 Organizational Productivity

The overall output of goods or services produced divided by the

inputs needed to generate that output. It’s the management’s job to
increase this ratio.
Productivity = Total output/production
Inputs
 Organizational Effectiveness

A measure of how appropriate organizational goals are and how well

an organization is achieving those goals.
 What are the Tools for Measuring
Organizational Performance?

There are many performance management tools designed to make the process easier and more
effective.
• Feed Forward Control:
Feed forward control, sometimes called preliminary or preventive controls, attempt to identify
and prevent deviations in the standards before they occur.
Example:
• Market demand
• Economic forecasts.
Concurrent Control
Concurrent controls involve identifying and preventing problems in an
organization as they occur.
Example:
• Fleet tracking by GPS allows managers to monitor
company vehicles.

Feedback Control:
Feedback control is a process that managers can use to evaluate how
effectively their teams meet the stated goals at the end of a production
process.
Financial control:
Financial controls are the procedures, policies and means by which an
organization monitors and controls the direction, allocation and usage of
its financial resources. Financial controls are at the very core of resources
management and operational efficiency in any organization.

Balance Scorecard Approach:

The balanced scorecard is a management system aimed at translating an
organization’s strategic goals into a set of organizational performance
objectives that in turn are measured, monitored and changed if necessary
to ensure that an organization’s strategic goals are met.
Information control:
Information Control is a function of management which helps to check
errors in order to take corrective actions.
Example:
A common method of controlling information is to completely remove the
person from any outside sources of information

Benchmarking of best practices:

Benchmarking allows an organization to identify and implement “best
practices” and develop improvement plans. Benchmarking is the practice of
comparing key metrics to that of other organizations.
Example:
Benchmarks could be used to compare processes in one retail store with
those in another store in the same chain.
 Contemporary issues in control

Adjusting controls for cross-cultural

differences:
• Control techniques are different for every country.
• Technology’s’ impacts on control are also seen when
comparing technologically advanced nations with less
technologically advanced countries.
• There are legal constraints for corrective action in foreign
countries.
 Workplace concerns

Here are some of the most common challenges managers face in the workplace:
• Decreased performance levels
• Being understaffed
• Lack of communication
• Poor teamwork
• Pressure to perform
• Absence of structure
• Time management
• Weak workplace culture
 Controlling customer interaction

Control is important to customer interactions because employee service

productivity and service quality influences customer perceptions of
service value. Organizations want long-term and mutually beneficial
relationships among their employees and customers.
 Corporate governance

Corporate governance is the system by which companies are directed

and controlled. The responsibilities of the board include setting the
company's strategic aims, providing the leadership to put them into
effect, supervising the management of the business and reporting to
shareholders on their stewardship.

Example:
• Calculation of the company's carbon footprint;
• Respect for human rights in the company;
• Transparency of executive salaries;
• Implementation of a code of conduct for employees.
Thank you!