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 SYSTEMDuring 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: Determine area

to be control

Step 2: Establish standard

s

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 organization’s strategic planning

MEASURE ACTUAL PERFORMANCE

It helps managers control the outcomes of their organizations. 

Comprises of three elements:What to measureWhen to measureHow 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

Barriers

Over control

Inappropriate focus

Rewards for

Inefficiency

Too accountab

ility

CHARACTERISTICS OF EFFECTIVE CONTROL SYSTEM

Integration with

planningFlexible Accuracy

Timeliness

Objectivity

CHARACTERISTICS OF EFFECTIVE CONTROL SYSTEM…CONT

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 SYSTEM…CONT

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 Tomorrow’s Leaders by Goodman, Fandt,

Michlitsch and Lewis