CONTROLLING AS A
MANAGEMENT FUNCTION
By
BUSHRA MANAIR , MBA
(SUMMIT BANK )
Controlling as a
Management Function
Controlling
A process of monitoring performance and taking
action to ensure desired results.
It sees to it that the right things happen, in the
right ways, and at the right time.
Controlling as a
Management Function
Controlling
Done well, it ensures that the overall directions
of individuals and groups are consistent with
short and long range plans.
It helps ensure that objectives and
accomplishments are consistent with one
another throughout an organization.
Controlling as a
Management Function
Controlling
It helps maintain compliance with essential
organizational rules and policies.
Controlling as a
Management Function
Cybernetic Control System
One that is self-contained in its performance
monitoring and correction capabilities.
(thermostat)
The control process practiced in organizations is
not cybernetic, but it does follow similar
principles.
The Control Process
Establish objectives and standards.
Measure actual performance.
Compare results with objectives and
standards.
Take necessary action.
Establish Objectives
and Standards
The control process begins with planning and
the establishment of performance objectives.
Performance objectives are defined and the
standards for measuring them are set.
Establish Objectives
and Standards
There are two types of standards:
Output Standards - measures performance results
in terms of quantity, quality, cost, or time.
Input Standards - measures work efforts that go
into a performance task.
Measuring Actual
Performance
Measurements must be accurate enough to
spot deviations or variances between what
really occurs and what is most desired.
Without measurement, effective control is not
possible.
Comparing Results with
Objectives and
Standards
The comparison of actual performance
with desired performance establishes the
need for action.
Ways of making such comparisons
include:
Historical / Relative / Engineering
Benchmarking
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Taking Corrective
Action
Taking any action necessary to correct
or improve things.
Management-by-Exception focuses
managerial attention on substantial
differences between actual and desired
performance.
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Taking Corrective
Action
Management-by Exception can save the
managers time, energy, and other resources,
and concentrates efforts on areas showing the
greatest need.
There are two types of exceptions:
Problems - below standard
Opportunities - above standard
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Effective Controls
The Best Controls in Organizations
are
Strategic and results oriented
Understandable
Encourage self-control
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Effective Controls
The Best Controls in Organizations are
Timely and exception oriented
Positive in nature
Fair and objective
Flexible
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Types of Control
Preliminary
Sometimes called the feedforward controls,
they are accomplished before a work activity
begins.
They make sure that proper directions are set
and that the right resources are available to
accomplish them.
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Types of Control
Concurrent
Focus on what happens during the work
process. Sometimes called steering controls,
they monitor ongoing operations and activities
to make sure that things are being done
correctly.
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Types of Control
Postaction
Sometimes called feedback controls, they take
place after an action is completed. They focus
on end results, as opposed to inputs and
activities.
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Types of Controls
Managers have two broad options with respect
to control.
They can rely on people to exercise selfcontrol (internal) over their own behavior.
Alternatively, managers can take direct action
(external) to control the behavior of others.
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Types of Control
Internal Controls
Allows motivated individuals to exercise selfcontrol in fulfilling job expectations.
The potential for self-control is enhanced
when capable people have clear
performance objectives and proper
resource support.
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Types of Control
External Controls
It occurs through personal supervision
and the use of formal administrative
systems.
Performance appraisal systems, compensation and
benefit systems, employee discipline systems, and
management-by-objectives.
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Organizational Control
Systems
Management Processes
Strategy and objectives
Policies and procedures
Selection and training
Performance appraisal
Job design and work structures
Performance modeling, norms, and organization
culture
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Organizational Control
Systems
Compensation and Benefits
Attract talented people and retain them.
Motivate people to exert maximum effort in
their work.
Recognize the value of their performance
contributions.
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Organizational Control
Systems
Employee Discipline
Discipline is defined as influencing behavior
through reprimand.
Progressive Discipline ties reprimand to the
severity and frequency of the employees
infractions.
Positive Discipline tries to involve people more
positively and directly in making decisions to
improve their behavior.
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The Hot Stove Rule
To be Effective Discipline Should be:
Immediate
Focus on activity
not personality
Consistent
Informative
Occur in a
supportive setting
Support realistic
rules
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Organizational Control
Systems
Information and Financial
Activity-based costing - the true cost of all
products and services.
Economic value added - examine the value
added by all activities.
Understand the implication of key financial
measures of (ratios) organizational performance
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Operations
Management and
Control
Purchasing
Economic Order Quantity
automatic reorder points
Just-In-Time Scheduling
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Operations
Management and
Control
Project Management
Program Evaluation and Review Technique
(PERT) - Identifies and controls the many
separate events in complex projects.
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Operations
Management and
Control
Statistical Quality Control
Based on the establishment of upper and lower
control limits, that can be graphically and
statistically monitored to ensure that products
meet standards.
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