MGT162

FUNDAMENTALS
OF MANAGEMENT
CHAPTER 7 - CONTROLLING

WHAT IS CONTROLLING?

Monitoring the performance of the

organization and its progress in
implementing strategic and operational
plans.
Identifying difference between planned
and actual results.
Taking corrective action
Ensuring that the organization is moving
toward the achievement of its goals.

In other words, controlling is the process

of taking preventive or corrective
action to keep things on track

CONTROL SYSTEM
During the control process, managers set up control systems

A control system is a set of

mechanisms designed to increase
the probability of meeting
organizational standards and goals

ROLES OF CONTROLS

Coping with uncertainty

Detecting irregularities

Identifying opportunity

Handling complex situations

Decentralizing authority

LEVELS OF CONTROL

Strategic Control
Ensure strategic plans are implemented and adjust
plans where necessary
Top level managers domain

Tactical Control
Assessing implementation of tactical plans at
department level, monitoring results and taking
corrective action.
Involves middle level managers

Operational Control
Monitoring day-to-day results and taking corrective
action where necessary
Responsibility of lower level managers

THE CONTROL PROCESS

Step 1:
Determin
e area to
be
control

Step 2:
Establish
standards

Step 3:
Measure
actual
performa
nce

Step 4:
Compare
performa
nce
against
standards

Step 5:
Determine
need for
corrective
action

ESTABLISHING STANDARDS

A control standard is a target

against which organization
performance will be compared

A control standard must be

measurable, specific and
accepted by organizational
members

It must also be in line with the

organizations strategic planning

MEASURE ACTUAL
PERFORMANCE
helps managers control
the outcomes of their
organizations.

It

Comprises

of three elements:

What to measure
When to measure
How frequent to measure

COMPARE PERFORMANCE
AGAINST STANDARDS

This step involves determining if

actual performance compared to
standards falls within acceptable
limits.

For example, the standard set for

registering guests in 15 minutes,
therefore, the manager will compare
actual registration of guests against
the standard set.

DETERMINE NEED FOR

CORRECTIVE

After comparing performance against

control standards, the manager may
take on any of the action below:
Maintain status quo when the
performance match the standards
(continue as before)
Correct the deviation
Change the standards if the control
standard is too high or too low

TYPES OF CONTROL

Pre-process

In-process

Post-process

FEED FORWARD / PREVENTIVE

CONTROL

Is done at the input level of production resources

The purpose is to predict potential problems

and prevent them from occurring and to
prevent problems at the input levels before
going through the transformation process

For example, carpenters have their own feed

forward control measure twice, cut once

Planning and feed forward control are related

but with different process.

In planning we ask where we are going

whereas in feed forward we ask what we can
do ahead of time to help our plan succeed

CONCURRENT CONTROL

Focus is on how inputs are being

transformed into outputs and adjusting
accordingly

For example, checking the oven

temperature when baking bread and
lowering the temperature if the oven
is too hot

Primary goal is to spot problems as

they develop and take corrective
action before final results are
achieved

CORRECTIVE
CONTROL/FEEDBACK CONTROL

Focus on the outputs of the

organization to measure the result
of certain actions.

Information is gathered and evaluated

about the completed activity and steps
are taken to improve the activities in
the future

Feedback control tests the quality and

validity of the objectives and standard

A corrective action is an action taken

to eliminate the cause of a detected
nonconformity

POTENTIAL BARRIERS TO
SUCCESSFUL CONTROL
Inappropri
ate focus

Over
control

Rewards
for
Inefficienc
y

Barri
ers

Too
accountab
ility

CHARACTERISTICS OF
EFFECTIVE CONTROL SYSTEM
Integratio
n with
planning

Flexible

Timelines
s

Accuracy

Objectivit
y

CHARACTERISTICS OF EFFECTIVE
CONTROL SYSTEMCONT

Integration with planning

Control should be linked with planning
The more precise the linkage, the more
effective the control

Flexible
The control system itself must be flexible
to accommodate change

Accuracy
Information needed for controlling must
be accurate otherwise organization may
make wrong decision

CHARACTERISTICS OF EFFECTIVE
CONTROL SYSTEMCONT

Timeliness
The control system must provide
information as often as necessary
Information also must be collected and
evaluated quickly to enable managers to
solve problems on time

Objectivity
Standards set must be understandable and
measurable.
A difficult control system will cause
mistake and frustration among both
managers and employees

END OF CHAPTER 7

Source: Management: Challenges for

Tomorrows Leaders by Goodman, Fandt,
Michlitsch and Lewis