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Controlling: DR S Patnaik Lecturer Clothing & Textiles Department Cape Peninsula University of Technology Email

The document discusses the control process and types of organizational control. It defines control as the final step in the management process that focuses on establishing standards, measuring performance, evaluating deviations, and taking corrective actions. The types of control discussed include physical resources, human resources, information sources, and financial resources. An effective control system is characterized by integration, flexibility, accuracy, timeliness, and simplicity.

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Mamello Meme Bolofo
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17 views

Controlling: DR S Patnaik Lecturer Clothing & Textiles Department Cape Peninsula University of Technology Email

The document discusses the control process and types of organizational control. It defines control as the final step in the management process that focuses on establishing standards, measuring performance, evaluating deviations, and taking corrective actions. The types of control discussed include physical resources, human resources, information sources, and financial resources. An effective control system is characterized by integration, flexibility, accuracy, timeliness, and simplicity.

Uploaded by

Mamello Meme Bolofo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 16

CONTROLLING

Dr S Patnaik

Lecturer

Clothing & Textiles Department

Cape Peninsula University of Technology

Email – [email protected]

1
The purpose of control
• A control process is necessary for the following reasons:
• Linked with planning, organising and leading
• Helps companies adapt to environmental change
• Helps limit the accumulation of error
• Helps companies cope with increasing organisational size and complexity
• Helps minimise costs.

2
The control process

3
The control process (continued)
• Step 1: Establish standards *(setting standards)

• Performance or control standard is a planned target against which the actual


performance will be compared
• Appropriate performance standards:
• Profit standards
• Market-share standards
• Productivity standards
• Staff-development standards.

4
The control process (continued)
• Step 2: Measure actual performance

• Collection of information and reporting on actual performance are continuous


activities
• Important requirement for reports to be absolutely reliable for the
measurement of actual achievements
• Control by exception – only important disparities reported to top management
in large organisations.

5
The control process (continued)
• Step 3: Evaluate deviations

• Determine the performance gap between the performance standard and actual
performance
• Important to know why a standard has only been matched, and not exceeded.
• Determine whether the deviations are large enough to justify further
investigation

6
The control process (continued)
• Step 4: Take corrective action

• Corrective actions need to be taken to ensure that deviations do not recur


• If actual achievements match standards then no corrective action is needed
• If actual achievements do not match standards, three possible actions exist:
• Actual performance can be improved to reach the standards
• Strategies can be revised to accomplish the standards
• Performance standards can be lowered or raised to make them more
realistic.

7
Types of control
• Organisations control activities and processes in a number of different areas and at
different levels in the organisation.
• The four key areas of control include the following:
• Physical resources
• Human resources
• Information sources
• Financial resources.

8
Types of control (continued)

9
Types of control (continued)
• The control of physical resources

• Inventory control
• Economic-ordering quantity (EQP)
• Material requirements planning (MRP) system
• Just-in-time (JIT) system
• Quality control
• Define the quality goals or standards
• Measure quality
• Rectify deviations and solve quality problems in an effort to keep the cost
of quality as low as possible.
10
Types of control (continued)
• The control of financial resources

• Financial resources and abilities are vital to the success of the organisation,
and therefore need to be strictly controlled
• Financial control is concerned with the following:
• Resources as they flow into the organisation
• Financial resources that are held by the organisation
• Financial resources flowing out of the organisation.

11
Types of control (continued)
• The control of financial resources

• The budget
• The budget contributes to financial control:
• Supports management in coordinating resources, departments and
projects
• Provides guidelines on application of the organisation’s resources
• Defines or sets standards that are vital to the control process
• Makes possible the evaluation of resource allocation, departments or
units.
12
Types of control (continued)
• The control of information resources

• Relevant and timely information made available to management during the


management process is vital in monitoring how well goals are accomplished
• The faster feedback is received, the more effectively the organisation’s control
systems function.

13
Types of control (continued)
• The control of human resources

• Control of human resources falls within the human resources management


• The main instrument used to control an organisation’s human resources is
performance measurement
• Other human resources control instruments can be applied to labour turnover,
absenteeism and the composition of the labour force.

14
Characteristics of an effective control system
• Integration
• Flexibility
• Accuracy
• Timeliness
• Simplicity

15
Summary
• Control is a fundamental management function and is the final step in
the management process
• Control focuses on all the activities in the organisation
• Effective control systems characterised by the extent to which
planning and control are integrated
• Application of control system should not become so complex that it
costs more than it saves.

16

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