TOPIC SIX:

CONTROLLING

SIKAWALA MUSONDA
 Meaning and nature of
controlling
Controlling is one of the managerial functions and it is an
important element of the management process. After the
planning, organising, staffing and directing have been
carried out, the final managerial function of controlling
assures that the activities planned are being
accomplished or not
 Controlling- meaning

 Controlling can be defined as the process of analysing

whether actions are being taken as planned and taking
corrective actions to make these conform to plans
Principles of control
Objectives:

 Controls must positively contribute to the achievement of group goals

by promptly and accurately detecting deviations from plans with a
view to making corrective action possible

Interdependence of Plans and Controls:

 The principles of interdependence states that more the plans are

clear, complete and integrated, and the more that controls are
designed to reflect such plans, the more effectively controls will
serve the need of managers
Principles cont..
Control Responsibility:

 According to this principle, the primary responsibility for

the exercise of controls rests in the manager charged with
the performance of the particular plans involved.

Conformity to Organisation Pattern:

 Controls must be designed so as to reflect the character

and structure of plans. If the organisation is clear and
responsibility.
Future-oriented Controls:

 It stresses that controls should be forward looking.

Effective controls should be aimed at preventing present
and future deviations from plans.
Individuality of Controls:

 Control should be designed to meet the individual

requirements of managers in the organisation. Although
some control techniques and information can be utilised in
the same form by various types of enterprises and
managers as a general rule controls should be tailored to
meet the specific requirements.
Strategic Point Control:

 Effective and efficient control requires that attention to be

given to those factors which are strategic to the appraisal of
performance.
The Exception Principle:

 The exception principles whereby exceptions to the standards

are notified, should be adopted. Note must be taken of the
varying nature of exceptions, as “small” exceptions in certain
areas may be of greater significance than ‘larger’ exceptions
elsewhere
Principal of Review:

 The control system should be reviewed periodically. The

review exercise may take some or all the points
emphasised in the above stated principles. Besides,
flexibility and economical nature or controls, should not
be lost sight of while reviewing controls.
Process of Controlling

1. Establishment of standards- Standards are the plans or the targets which

have to be achieved in the course of business function. They can also be
called as the criterions for judging the performance. Standards generally are
classified into two-
 Measurable or tangible - Those standards which can be measured and expressed are
called as measurable standards. They can be in form of cost, output, expenditure,
time, profit, etc.
 2. Measurement of performance- The second major step in
controlling is to measure the performance. Finding out deviations
becomes easy through measuring the actual performance.
Performance levels are sometimes easy to measure and sometimes
difficult.

3. Comparison of actual and standard performance- Comparison of

actual performance with the planned targets is very important.

Deviation can be defined as the gap between actual performance and

the planned targets. The manager has to find out two things here-
extent of deviation and cause of deviation.
 The managers have to exercise control by exception. He
has to find out those deviations which are critical and
important for business. Minor deviations have to be
ignored. Major deviations like replacement of machinery,
appointment of workers, quality of raw material, rate of
profits, etc. should be looked upon consciously
 Once the deviation is identified, a manager has to think about various cause
which has led to deviation. The causes can be-
 Erroneous planning,

 Co-ordination loosens,

 Implementation of plans is defective, and

 Supervision and communication is ineffective, etc.

4. Taking remedial actions- Once the causes and extent of deviations are known,
the manager has to detect those errors and take remedial measures for it. There
are two alternatives here-
 Taking corrective measures for deviations which have occurred; and

 After taking the corrective measures, if the actual performance is not in

conformity with plans, the manager can revise the targets. It is here the controlling
process comes to an end.

 Follow up is an important step because it is only through taking corrective

measures, a manager can exercise controlling.
Factors that affect control plans

Size of Business:

 As the organisations grow in size and diversity, they

become increasingly complex to manage and hence the
need for an efficient system of controls which is required
to coordinate activities and accomplish integration.
Uncertainty:

 Control forms a basis for future action. Today’s world of

rapid and sometimes unpredictable changes makes the
future very uncertain. This makes planning very difficult.
Hence, control points are necessary to check the progress of
activities and plans and make the necessary and
constructive adjustments so as to accommodate any
environmental changes.
Decentralization Trends:

 The current trends in decentralization have brought the

decision making authority at lower level management while
accountability for results remains with the upper
management. Controls serve the purpose of monitoring and
ensuring performance results while delegating authority to
subordinates.
 Benefits of Controlling

1. Control provides the basis for future action in the organisation.

Control will reduce the chances of mistakes being repeated in future
by suggesting preventive methods.

2. Control facilities decision making in the organization. The process of

control is complete only when corrective measures are taken in the
organization. This requires taking a right decision as to what type of
follow up action is to be taken while controlling.
3. An effective system of control facilities decentralization
of authority only when corrective measures are taken.
This requires taking a right decision as to what type of
follow up action is to be taken regarding control.

4. Control and planning go hand in hand in the organisation.

Control is the only means to ensure that the plans are
being implemented in real sense and not some other
else. Control points out the shortcomings of not only
planning but also other functions of management such as
organising, staffing and directing in the organisation.
5. The existence of a control system has a positive impact on the
behavior of the employees in the organisation. They are cautious
when performing the duties in the organization and they know
that their supervisors in the organisation are observing them.

6. Control helps in coordination of the activities of the various

departments in the organisation of the enterprise by providing
them unity of direction.
Limitations of controlling

 An organisation cannot control the external factors such as government

policy, technological changes, fashion changes etc.

 Control is an expensive process because sufficient attention has to be paid to

observe the performance of the subordinates in the organisation. This
requires an expenditure of a lot of time and effort to be made.
 Control system loses its effectiveness in the organisation when
standards of performance cannot be defined in quantitative terms.
For example, it is very difficult to measure human behavior and
employee morale in the organization.
 The effectiveness of control mainly depends on the acceptance of
subordinates in the organisation. They may resist control because
they may feel that it will reduce or curtail their freedom while in
duty
Quality Control

 Quality control (QC) is a procedure or set of procedures intended to

ensure that a manufactured product or performed service adheres to a
defined set of quality criteria or meets the requirements of the client or
customer.

 QC is similar to, but not identical with, quality assurance (QA). QA is

defined as a procedure or set of procedures intended to ensure that a
product or service under development (before work is complete, as
opposed to afterwards) meets specified requirements. QA is sometimes
expressed together with QC as a single expression, quality assurance
and control (QA/QC).
Reasons for quality control

 Customers require that your products meet their standard

for energy efficiency, purity, zero defects or whatever
issue is important to them
 Brand/reputation preservation.

 Maintaining customer loyalty

 Your sales improvement. Salespeople don't track customer

information, or they compete for the same customers, for
instance
 Customer service improvements.

 Helps in setting service and quality benchmarks

Quality control Benchmarks

 Quality control requires the specific metric you're going to use to judge
equality. In manufacturing, for example, you have several possible
benchmarks:

 Failure rate

 Frequency of defects

 Does manufacturing come in under budget and under time?

 Are the processes reliable?

 If you make electronics, how often do they crash?

 The Planning process

 Once you know the benchmark you want to achieve, you can
plan your quality control process steps:
 Define a batch
 How many units will you test from each batch?
 Based on the test, how many units fail? How many customer
calls go to
 How many orders are shipped late?
 Are you grading on a pass/fail system where any defect
equals failure, or will you have a sliding scale such as a 1 to
10 scale for evaluating the issues?
 How will you fix the problems you discover?
 Is your quality assurance program working, or do you need to
upgrade it?
 What changes do you have to make to ensure things don't drop
back to a subpar level as soon as you concentrate on some other
problem?
 Once you implement the quality control procedure, how will you
review the results?
 How will you improve the initial results?
Limitations on quality controlling

 Like any other business project, your quality control

program may run up against your limits:
 How many resources can you devote to the quality control
process steps?

 How much time can you devote to product or operations

testing?
 Do you have the expertise available in house, or do you
need to bring in an expert?

 How frequently can you afford to make tests?

 How will you archive the information so it's available to

those who need to review it?
 A good program balances the push for greater quality
against the demands on your company's resources.
 Techniques of quality control

 Sampling material is an effective quality control procedure

for a manufacturer, but it doesn't do much good if you're
evaluating a customer help desk.

 measure manufacturing output, whether it's ceramic mugs

or asphalt for road construction. The types of quality
control could include testing for defects, durability, weight
or chemical composition.

 You can smell and taste food as well as evaluate it for how
attractive it looks.
 You can use questionnaires or interviews to evaluate the quality
of services you provide to customers.

 For medical supplies, quality control methods include checking

that packaging is intact, that chemical composition has been
verified by a pharmacist and that any necessary documentation
is available. If the drug requires refrigeration, checking storage
conditions would be an added quality control procedure.
END