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BMGT200 - Chapter 9 - Part 9.2

The document discusses the four steps in the control process: 1) establishing objectives and standards, 2) measuring actual performance, 3) comparing results with objectives, and 4) taking corrective action when results do not match objectives. The control process is used to evaluate performance and identify needs for improvement.

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30 views8 pages

BMGT200 - Chapter 9 - Part 9.2

The document discusses the four steps in the control process: 1) establishing objectives and standards, 2) measuring actual performance, 3) comparing results with objectives, and 4) taking corrective action when results do not match objectives. The control process is used to evaluate performance and identify needs for improvement.

Uploaded by

12110159
Copyright
© © All Rights Reserved
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School of Business

Department of Management and International Management

Introduction to Business Management


Chapter 9 | Part 2

Fundamentals of Control
Fall 2020 - 2021

Course code - Chapter 9


Objective 9.2: The Control Process

Key Takeaways:
 List and describe the steps in the control process.(P224 to P 227 only)

The Control Process


◦ Establish objectives and standards
◦ Measure actual performance
◦ Compare results with objectives
◦ Take corrective action

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


Figure 9.3 Four steps in the control process

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


The Control Process

Step 1 — establishing objectives and


standards
◦ Output standards
◦ Measure performance results in terms of quantity,
quality, cost, or time
◦ Input standards
◦ Measure effort in terms of amount of work expended in
task performance

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


The Control Process

Step 2 — measuring actual performance


◦ Goal is accurate measurement of actual
performance results and/or performance efforts
◦ Must identify significant differences between
actual results and original plan
◦ Effective control requires measurement

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


The Control Process

Step 3 — comparing results with objectives


and standards
◦ Need for action = Desired Performance –
Actual Performance
◦ Comparison methods:
◦ Historical comparison
◦ Relative comparison
◦ Engineering comparison

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


The Control Process

Step 4 — taking corrective action


◦ Taking action when a discrepancy exists
between desired and actual performance
◦ Management by exception
◦ Giving attention to situations showing the greatest need
for action
◦ Types of exceptions
◦ Problem situation
◦ Opportunity situation

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.


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Summary of Objective 9.2
• The first step in the control process is to establish performance
objectives and standards that create targets against which later
performance can be evaluated.
• The second step in the control process is to measure actual performance
and specifically identify what results are being achieved.
• The third step in the control process is to compare performance results
with objectives to determine if things are going according to plans.
• The fourth step in the control process is to take action to resolve
problems or explore opportunities that are identified when results are
compared with objectives.

COPYRIGHT ©2015 JOHN WILEY & SONS, INC.

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