CONTROLLING

DEFINITION OF CONTROL
• Control is the process in which managers assure that actual
performance fit in to the organization’s plan.
• Control is process of determining whether or not there has been
a deviation in the organisational plan so that steps can be taken
to prevent or correct the errors or deviations from the plan.
• Control ensures that results are achieved in line with the goals
and objectives decided by the management
 THE IMPORTANCE OF CONTROL
• Control ensures that all activities at all level of organisation are in accordance
with the organisation’s overall objectives.
• Control ensures that the organisation's resources are used in such a way that it
attains its objectives.
• Control ensures that costly mistakes are avoided.
• Control helps to reduce unnecessary costs and increase outputs.
• Control provides feedback on project status.
• Controls aid in decision making.
 THE CONTROL PROCESS
• The steps in the Control Process are :
1. Establish a control standards to measure performance:.
o A control standard is a target against which subsequent(following)
performance will be compared.
o From the organization’s overall strategic plan, define goals for
organizational departments in specific, operational terms that include
standards of performance to compare with organizational activities .
o Control standards should:
i. Should be expressed in measurable terms
ii. Should be consistent with the organisational goal
iii. Should be realistic
iv. Should identify performance indicators( are measures of performance
that provide information that is directly relevant to what is being controlled.
E.g Revenue: Monthly sales increase is an indicator, Production : number of
uints , Employee Performance is measured both by quality and quantity)
 Cont. THE CONTROL PROCESS
2. Measure actual performance.
o This stage involves collecting data and report on the actual performance.
o The variable data should be reliable and quantifiable to make a meaningful
comparison.
o Observation and measurement should be in line with control system; that is, they
should occur at the strategic points and according to the standards determined by the
control systems. E.g Weekly, monthly sales report,
 Cont. THE CONTROL PROCESS
3. Compare performance with the standards:
o This step compares actual activities to performance
standards.
o The actual performance report simply compare if the actual
performance meets, exceeds (too high), or falls short ( low)
of standards.
 Cont. THE CONTROL PROCESS
4. Take corrective actions
o When performance differs from standards, managers must
determine what changes are necessary and how to apply
them.
o After the evaluating the cause or causes of deviation,
Managers must take the corrective action
 Types of Controls
1. Feedforward controls: (preliminary or preventive controls.)
o It an attempt to identify and prevent deviations in the standards before they occur.
( prevents anticipated problems)
o Feedforward controls focus on monitoring inputs (labour, capital, raw materials) in
conformity with the standards before they are used in the process of transformation
o For example, these controls are evident in the selection and hiring of new employees.
o Advantage : most desirable type of control, it prevent the error before occurs
o Disadvantage : requires timely and accurate information that often is difficult to get
 Types of Controls
2. Concurrent Controls/ Monitoring Control
o Focuses on monitoring and regulating the transformation process of inputs to ensure that
activities conform to the prescribed organizational standards(takes place while activity is in
progress).
o These controls monitor ongoing employee activity to ensure consistency with quality
standards.
o These controls rely on performance standards, rules, and regulations for guiding employee
tasks and behaviors.
o Their purpose is to ensure that work activities produce the desired results.
o As an example, a measure whether the items being produced meet quality standards .
 Types of Controls
3. Feedback controls/ Evaluation Control
o Focuses on checking the final outputs (goods or services) to understand
whether performance meets established standards(takes place after the
activity is done).
o This type of control examines historical results to guide future actions.
o Problems may already have caused damage or waste
o The methods employed in corrective action include cost–benefit analysis,
audit, quality control, performance evaluation, and impact assessment
 Types of Controls

Input Processes Output

Concurrent
Control

Corrects
problems as
they happen
 THE LEVELS OF CONTROL
• The two basic levels of control within the organisation are:
1. Strategic Control
o Strategic control is exercised at top management level
o Involves a close study of the organisation’s:
 Total Effectiveness: the extent to which the organisation has reached its goals and the way
in which the goals have been realised
 Productivity : The relationship bwtn the output and resource employed to generate the
output
 Management Effectiveness
 THE LEVELS OF CONTROL
2.Tactical /Operational control
o Focuses on assessing the implementation of tactical plans at department levels,
monitoring results, and taking corrective actions, if necessary.
o Middle-level and the lower managers make use of this control for achieving
departmental goals and objectives, and accordingly carry out programmes and meet
budget
 FUNCTIONAL AREA CONTROL
SYSTEMS
• Organisational systems control can be applied to all the major functional areas in the
organisation, namely :
1. Financial control
o Is the control of financial resources as they flow into the organisation
o Financial control can be executed by means of budgets, financial statements, ratio analysis and financial
audits
2. Human resources Control
o are one of the organisation’s main resources and should be controlled meaningfully.
o The main instruments used to control an organisation’s human resources are performance measurement,
coaching, counselling and disciplining
 FUNCTIONAL AREA CONTROL
SYSTEMS
3. Production Control
o The physical resources of an organisation are its tangible assets, such as land,
buildings, machinery, vehicles, equipment, office furniture, raw material, work in
progress and its finished products.
o Various control systems can be implemented to control the physical resources of an
organisation, namely inventory control, operational control and quality control
CHARACTERISTICS OF AN EFFECTIVE
CONTROL SYSTEM
• For a control system to be effective it should have the following characteristics:
o Integrated with planning : the control system should complement the
planning because when deviations are encountered, it shows that plans and
even goals need to be revised.
o Flexibility: The control system should be able to accommodate change.
o Accuracy: the control system should provides a goal-oriented and accurate
picture of the situation.
CHARACTERISTICS OF AN EFFECTIVE
CONTROL SYSTEM
o Timeliness: data to be collected on timely and regularly
o Objectively: the control system should provide data that is as objective as
possible
o Not too complex:
 SHORTCOMINGS/LIMITATION OF
CONTROL
• Human reactions to control
• Lack of suitable performance measuring standards
 REVIEW QUESTIONS
1. Discuss in what way planning and controlling are related.
2. Defend the importance of control in the management of the organisation.
3. What is feedback and feed-forward control?
4. Can the control function be delegated? Justify your answer.
5. Imagine a situation of planning without control. What would be the implications for an
organization? Justify your answer.
6. What are the requirements of a good control system? Discuss with examples.
7. In order to be effective and serve its intended purpose, a control system need to satisfy
various characteristics. Discuss only five characteristics of an effective control system.