CONTROLLING

CONTENT
I. Objectives
II. Definitions
III. Control Process
IV. Types of Control
V. Characteristics of an Effective
Control System
VI.Control Technique
VII.Controlling Overall Performance
VIII.Control Strategies

I. Objectives

Objectives
Know the need for control
Understand the control process
Identify the types of control
Learn the characteristics of an
effective control system
Know the different control
techniques

II. Definitions

Controlling
Defined

as

activity

for

the

managerial

ensuring

the

achievement of an organizations
objectives.

Controlling
Checks whether plans are being
observed and suitable progress
toward the objectives is being
made.

III. Control Process

Three Basic Steps of Control Process

Establishing

standards

against which performance

can be measured.

Three Basic Steps of Control Process

Comparing actual performance

against standards.

Three Basic Steps of Control Process

Correcting
or

deviations

straightening

what is crooked.

up

IV. Types of Control

Three Types of Control

Preliminary Control.

Preliminary
Control
Identifies major problems before they
occur.

Preliminary
Focuses

Control

deviations

on

in

the

preventions

planning,

staffing and directing.

of

organizing,

Preliminary
Control

Assures that every possible malfunction

has been taken care of.

Three Types of Control

Concurrent Control.

Concurrent
Control
Controls
the
monitor
progress.

the

endeavors

to

operation

in

Concurrent
Control
Serves as a screening test to
move to the next step.

Three Types of Control

Post Action Control.

Post-Action
Control
Control
is carried out after the
event.

Post-Action
The Control
poorest form
because
resources.

it

is

of

control

wasteful

of

Post-Action
Control
Includes analysis

of

budget,

financial statements, and quality

control.

V. Characteristics of an
Effective Control System

Characteristics of an
Effective Control System
Must

be

suitable

1
for

the

activity it seeks to regulate

and should be the minimum
required

to

desired results.

achieve

the

Characteristics of an
Effective Control System

Must be objective and measurable

in standards used for evaluating
workers.

Characteristics of an
Effective Control System

Uses the exception principle

which

provides

that

only

exceptional circumstances (good or

bad

situations)

requires

attention of management.

the

Characteristics of an
Effective Control System

Provides

only

usable

control

data to the manager concerned.

Characteristics of an
Effective Control System
Quickly

reports

undesirable

deviations to give the managers the

opportunity to take action in time to
prevent them.

Characteristics of an
Effective Control System

Must be flexible otherwise it will

be unable to maintain control of
operations when a plan fails or is
suddenly changed.

Characteristics of an
Effective Control System

Must be worth the expense otherwise

its a waste of resources.

Characteristics of an
Effective Control System

Should show ways to correct an action.

Must not only identify what the error is,
where it occurred, but also who or what
is responsible for it.

Characteristics of an
Effective Control System

Must

pinpoint

where

the

responsibility lies for the various

control activities.

Characteristics of an
Effective Control System
Must

review

1
0

standards

and

objectives periodically for changes

and newly developed methods and
techniques.

Characteristics of an
Effective Control System

1
1

Must be an on-going process since the

environment, operations, personnel, etc.
of

an

changing.

organization

are

constantly

VI. Control Techniques

Traditional Control
Techniques

Budgetary Control.

Additional Information
BUDGET
Is a financial statement prepared and
approved prior to a defined period of
time for the policy and purpose of
achieving a predetermined objective.

Budgetary
Is

Control

the

related

establishment
responsibilities

executives.

of

budget
of

the

Traditional Control
Techniques

Break-Even Points.

Break-Even Point
Analysis

It is a point when the total income is

equal to the total cost.
The level of activity when profit or
loss

is

made

organization.

by

the

business

Specialized Control
Techniques

Gantt Chart Technique.

Gantt Chart
Technique

It is a way of presenting control

information to management developed
by Henry L. Gantt.

Specialized Control
Techniques

Network Analysis.

Network
Analysis

A technique for controlling a complex

project which requires analysis into
its various activities and events.

Specialized Control
Techniques

Milestone Scheduling.

Milestone
Scheduling

schedule

and

control

procedure

developed by the National Aeronautics

and Space Administration (NASA).

Milestone
Scheduling
Like in Gantt Chart, it uses bar charts
to monitor progress.

VII. Controlling Overall

Performance

Controlling Overall
Performance

Income Statement.

Income
Statement

A compile statement at the end of an

accounting period for calculating net
profit

or

operations.

loss

from

business

Controlling Overall
Performance

Return of
Investment.

Return of Investment
(ROI)

Achieves the necessary objective rate

established by the organization.

ROI Formula

ROI =

Profit (before tax) x

________________________
100%
Total
Investment

Controlling Overall
Performance

Key Area Control.

Key Area

Control
technique which an

control

organization rates its performance

in a number of critical areas.

Key Area

Control

It includes quantity, quality, time

and cost with profit as the criterion
of success.

Controlling Overall
Performance

Audits.

There are three types of audits used

for overall performance: (a) internal,
(b)

external

audits.

and

(c)

management

Internal

Audit

Conducted by the employees of the

organization
performing
activities.

and

are

impartial

responsible

for

monitoring

External Audit
Conducted by those who are
NOT

employees

organization.

of

the

Management

Audit
A periodic assessment of the managerial
performance conducted by an internal or
external auditors.

Management
Audit

Its primarily aim is to determine whether

positive results are being obtained or
not.

VIII. Control Strategies

Control Strategies

There are three basic managerial

approaches, these are: (a) market,
(b)

bureaucratic,

control.

and

(c)

clan

Market
Control

A managerial approach that relies

on market mechanisms to regulate
prices

for

certain

goods

reasonable level of competition.

and

Bureaucratic Control

Relies on regulations through rules, policies,

supervision,
systems,
mechanisms.

budget,
and

schedules,

other

reward

administrative

Clan

Control

Relies on values, beliefs, traditions,

corporate culture, shared norms, and
informal

relationships

to

regulate

employee behaviors and facilitate

the reaching of organizational goals.

That ends our

presentation
for today.

Thank you!