Controlling As A Management Function

1 Controlling as a Management
Function
 Controlling
 A process of monitoring performance and taking action to ensure
desired results.
 It sees that the right things happen, in the right ways, and at the right
time.
 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.
 It helps maintain compliance with essential organizational rules and
policies.
2 The Control Process
 Establish objectives and standards.

 Measure actual performance.
 Compare results with objectives and standards.
 Take necessary action.
3 Effective Controls
The Best Controls in Organizations are
 Strategic and results oriented

 Understandable
 Encourage self-control
4 Effective Controls
The Best Controls in Organizations are
 Timely and exception oriented

 Positive in nature
 Fair and objective
 Flexible
5 Purpose of control
 Adopt to Environmental Changes

 Limit the accumulation error
 Cope with organizational complexity
 Minimize cost
6
Areas of control
 Physical Control:
 Inventory Management
 Quality Control
 Equipment Control
 Personnel Control:
 Selection and Placement
 Training and Development
 Performance appraisal
 compensation
 Information Control:
 Sales and marketing forecasts
 Environmental analysis
 Public relations
 Production Scheduling
 Finance Control:
 Debt
 Capital Structure
 Working capital management
7 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.
8 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.
9 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.
10 Levels of control
Strategic control
Structural Control
operational control Financial control

11 Strategic control:
 Strategic control is concerned with tracking the strategy as it is being implemented,
detecting any problems areas or potential problem areas, and making any necessary
adjustments.
 Henry Mintzberg, one of the foremost theorists in the area of strategic management,
tells us that no matter how well the organization plans its strategy, a different strategy
may emerge. Starting with the intended or planned strategies, he related the three types
of strategies in the following manner:
 Intended strategies that get realized; these may be called deliberate strategies.
 Intended strategies that do get realized; these may be called unrealized strategies.
 Realized strategies that were never intended; these may be called emergent strategies.
Recognizing the number of different ways that intended and realized strategies may differ
underscores the importance of evaluation and control systems so that the firm can
monitor its performance and take corrective action if the actual performance differs
from the intended strategies and planned results.
12 Structural control
 Structural control monitors how the building block’s of the

organization’s structure are holding up to their planned function.
Two major types of control operate at opposite ends of each other
because they have different goals, degrees of formality,
performance expectations, organization designs, reward systems,
and levels of participation.
 Bureaucratic control (Relies on employee compliance)
 Decentralized control (Relies on employee commitment)
13 Operational control:
 It is concerned with processes used by an organization to
transform resources into products or services.
Inputs Transformation Output
Preliminary Screening Postaction

control control control
14 Financial Control
 It is the control of financial resources as they flow into the

organization, are held by the organization and flow out of the
organization.
 It is of two types:
 Budgetary
 Non-Budgetary
15 Budget:
 Financial Budget:
 Cash Budget
 Capital Expenditure Budget
 Balance Sheet Budget
 Operating Budget
 Sales/Revenue Budget
 Expenses Budget
 Profit Budget
 Non Monetary Budget:
 Labour budget
 Space Budget
 Production budget
16 Budgeting procedure:
17 Non budgetary tools:
 Financial statements
 Financial ratios
 Financial audits

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1 Controlling as a Management

 Establish objectives and standards.

The Best Controls in Organizations are

 Strategic and results oriented

The Best Controls in Organizations are

 Timely and exception oriented

 Adopt to Environmental Changes

operational control Financial control

 Structural control monitors how the building block’s of the

Inputs Transformation Output

Preliminary Screening Postaction

 It is the control of financial resources as they flow into the

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