M gt162:

fundamental of management
chapter 7
contr ol
Chapter Outline:
7.1 Definition
of controlling
7.2The controlling process

7.3 Types of control

7.4Potential barriers to successful control

7.5 Making controlling success
 Definition Types
Controlling of Successful Successful
of
process controlling Barriers
controlling Control
Setting
Control
Measuring
controlling preventive concurrent corrective
Comparing

responding

controlling
7.1 Definition of controlling
A process through which managers regulate organizational activities to make them
consistent with expectations and help them achieve predetermined standards of
performance.
Control
is making something happen the way it was planned to happen.
Controlling
is the process managers go through to control.
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.
Organizational control defined:
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.
The importannt of Control:
Deal With Change Or Uncertainty
Plans and goals set by organization deal with the future which is always uncertain and
is constantly changing:
Changes in market shifts, product demands, new regulations and policies will affect
the organizations plans. Therefore, they need to implement controlling in their activity
so that they can encounter with the changes.
Deal With Complexity
As organizations grow in size and diversity, they become more complex. Big
organization will have more workers, who use formal channel of communication and
sophisticated technology. A control is needed to coordinate activities and accomplish
integration.
For example, a Branch Manager will monitor the progress of all units or departments
by retrieving monthly report. He or she will able to identify problems by analyzing
those reports.
 The importannt of Control:
Deal With Human Limitations
It is also deal with human mistakes. Organization comprises organization members
and they sometimes make mistakes.
For example, they make wrong forecast, make errors in judgment or filling wrong
orders. Controlling will help to spot those mistake and unable to take corrective
action.
Help Delegation And Decentralization To Run Smoothly
It ensures delegation and decentralization are operated smoothly. When managers
delegate authority to employees, these employees need to be monitored so that they
will not make mistakes or even misuse the power or authority given to them.
Controlling enables managers to check on performance.
For example, if the Production Manager delegates the authority to the assistant, he
will monitor through performance report monthly. Any defect rate and declining in
production will be noticeable by the manager.
Assist The Management Process
Is assist the process of planning, organizing, leading and motivating by determining
what is necessary, when it is necessary and the way it is require. For example,
controlling will ensure all management process is according to schedule and towards
achieving the blue print of the organization.
7.2 The controlling process
1. Setting Standards for Performance:
Whenever possible, the standards should be set in a manner(specific measurement: time, quantity, price,quality) that allows
them to be compared with actual performance.
Important to evaluate the performance of employee skills & organizations
Eg: Barred students from seating for final exam if have poor attendance record (<80%)
2. Measuring Actual Performance:
- Measure actual performance outputs & inputs (Identify the variance & the output that desired)
Measurement : quantitaive (easier) qualitative ( need to use judgement)
Organization must decide on:
What to measure.
When to measure.
How frequently to measure.
Calculation of percentage of present
Eg. Measure the percentage of student attend lecture & tutorial. Let say attend lecture 11/14 and tutorial
11/14. Calculate:
Percentage of = no. of times attend lecture + tutorial * 100
present Total no. of lecture + tutorial
= 22 *100 = 78.5%
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7.2 The controlling process
3. Comparing Actual Performance With Standards:
This step involves determining if actual performance compared to standards falls within acceptable
limits.
Indicate the current condition & need of corrective action:
Aceptable deviation: Incontrol No corrective action
Below than aceptable deviation: Out of control Need corrective action
Eg: Attendance :85%-75%
4. 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.
Eg: >75% sit for final exam
<85% consulattion& investigation (whther the standards are unrealistic or not)
7.3 Types of control
There are three types of control and what type is used is determined primarily by the
work phase in which the control is needed.
Types of control:
1. Preventive /Feed Forward / Steering Control
When?:Occur before some unit of work is actually performed, Done at the input level of production
Purpose: to anticipate potential problems and prevent them from occurring
How? : Management creates policies, procedures and rules
Focuses on detecting undesirable material, financial, or human resources that serve as inputs to the
transformation process.
Eg: Rule that salesperson cannot talk to one another while a customer is in their department
2. Concurrent /Screening Control
When ?: Takes place as some unit of work being performed (Transformation process)
Purpose : to monitor ongoing activities,
How?: spot problems as they develop and take corrective action before final results are achieved.
Focuses on the transformation process to ensure that it is functioning properly.
Example: Stock managers making periodic visual check throughout a work period to evaluate the status of
the sales shelves/ check for defect and perfect intermediate goods
Types of control:
3. Feedback /Post Action / Corrective Control
When?: after some unit of work has been performed
Purpose: to make corrective action if there is an undesirable amount of deviation from standard.
How?: corrective action is undertaken and applied to future activities. by looking at organizational history over a
specified time period
Eg: Example: final quality check for complete products
Multiple Focal Points
Most organizations use several control systems focused on various phases of the transformation process.
7.4 Potential barriers to successful
control
1. 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.
Eg: Planned weekly production quotas is 2000 units. A manager might be tempted to push machines so
hard to achieve the quota, thus that machines might easily broken.
2. 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.
3. 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.
-Eg. Actual productions are not equivalent with planned production due to low inventory. Appropriate corrective action is to
increase the level of inventory but this is considered as narrow perspective of the problems. Instead manager should first
ask questions such as is there enough money on hand to raise inventory level? Are there sufficient personnel presently in
purchasing dept to effect the necessary increase?
4. Means versus ends
Control activities are not the goals of the control process, they are merely the means(ways) 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.
5. 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.
7.5 Making controlling success
1. 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.
2. Composed of Objective and Subjective Measures
Effective control systems typically require managers to blend quantitative (objective) and
qualitative (subjective) performance measures.
4. Incorporates Timeliness in Feedback Reporting
Timeliness is the degree to which the control system provides information when it is needed.

5. 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.
everyone thinks of changing the world, but no one thinks of changing himself