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Controlling: Management

Controlling is the process of monitoring activities to ensure plans are followed and deviations are corrected. It is important for managers to know if goals are on target and how to improve. The control process involves establishing standards, measuring performance, comparing results to standards, and taking actions to address any deviations. Financial, information, and benchmarking controls are tools used to measure organizational performance. Contemporary issues relate to privacy, theft, violence, and governance.

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surbhi gupta
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28 views

Controlling: Management

Controlling is the process of monitoring activities to ensure plans are followed and deviations are corrected. It is important for managers to know if goals are on target and how to improve. The control process involves establishing standards, measuring performance, comparing results to standards, and taking actions to address any deviations. Financial, information, and benchmarking controls are tools used to measure organizational performance. Contemporary issues relate to privacy, theft, violence, and governance.

Uploaded by

surbhi gupta
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Controlling

Pragya Gupta
Assistant Professor
Jaipuria Institute of Management, Noida
Controlling

Controlling

• The process of monitoring activities to ensure that they are being


accomplished as planned and of correcting any significant
deviations.

The Purpose of Control

• To ensure that activities are completed in ways that lead to


accomplishment of organizational goals.

Jaipuria Institute of Management, Noida Pragya


Why is Control Important?
As the final link in management functions:

• Planning
• Controls let managers know whether their goals and plans are on target and what
future actions to take.

• Empowering employees
• Control systems provide managers with information and feedback on employee
performance.

• Protecting the workplace


• Controls enhance physical security and help minimize workplace disruptions.
Jaipuria Institute of Management, Noida Pragya
Planning – Controlling Link

Jaipuria Institute of Management, Noida Pragya


The Control Process

Jaipuria Institute of Management, Noida Pragya


Establish Objectives and 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 can be
• Measurable / tangible

• Non-measurable / intangible

Jaipuria Institute of Management, Noida Pragya


Measuring: How and What to measure

Sources of Information (How) Control Criteria (What)


• Personal Observation Employees
• Statistical Reports • Satisfaction
• Turnover
• Absenteeism
Budgets
• Costs
• Output

Jaipuria Institute of Management, Noida


• Sales Pragya
Comparing

Determining the degree of variation between actual performance


and the standard.

• Significance of variation is determined by:


• The acceptable range of variation from the standard (forecast or budget).

• The size (large or small) and direction (over or under) of the variation from
the standard (forecast or budget).

Jaipuria Institute of Management, Noida Pragya


Acceptable range of variation

Jaipuria Institute of Management, Noida Pragya


Taking Managerial Action
Courses of Action

• “Doing nothing”
• Only if deviation is judged to be insignificant.

• Correcting actual (current) performance


• Immediate corrective action to correct the problem at once

• Basic corrective action to locate and to correct the source of the deviation.

• Corrective Actions
• Change strategy, structure, compensation scheme, or training programs; redesign
jobs; or fire employees
Jaipuria Institute of Management, Noida Pragya 1
Taking Managerial Action

Courses of Action (cont’d)

• Revising the standard

• Examining the standard to ascertain whether or not the standard is


realistic, fair, and achievable.
Upholding the validity of the standard.

Resetting goals that were initially set too low or too high.

Jaipuria Institute of Management, Noida Pragya 1


Tools for measuring Organizational Performance

• Feedforward Control

• A control that prevents anticipated problems before actual


occurrences of the problem.
• Building in quality through design.

• Requiring suppliers conform to ISO 9002.

• Concurrent Control

• A control that takes place while the monitored activity is in progress.


• Direct supervision: management by walking around.
Jaipuria Institute of Management, Noida Pragya 1
Tools for measuring Organizational Performance

• Feedback Control

• A control that takes place after an activity is done.


• Corrective action is after-the-fact, when the problem has already occurred.

• Advantages of feedback controls:


• Provide managers with information on the effectiveness of their planning
efforts.
• Enhance employee motivation by providing them with information on how
well they are doing

Jaipuria Institute of Management, Noida Pragya 1


Types of Control

Jaipuria Institute of Management, Noida Pragya 1


Tools for Measuring Organizational Performance

Balanced Scoreboard

• Is a measurement tool that uses goals set by managers in four areas to measure
a company’s performance:
• Financial

• Customer

• Internal processes

• People/innovation/growth assets

• Is intended to emphasize that all of these areas are important to an


organization’s success and that there should be a balance among them.
Jaipuria Institute of Management, Noida Pragya 1
Financial Controls

Traditional Controls Managing Earnings

• Ratio analysis • “Timing” income and expenses to


• Liquidity enhance current financial results, which
• Leverage gives an unrealistic picture of the
• Activity organization’s financial performance.
• Profitability
• New laws and regulations require
• Budget Analysis companies to clarify their financial
• Quantitative standards information
• Deviations
Jaipuria Institute of Management, Noida Pragya 1
Information Controls

Management Information Systems (MIS)

• A system used to provide management with needed


information on a regular basis
 Data: an unorganized collection of raw, unanalyzed facts
(e.g., unsorted list of customer names).
 Information: data that has been analyzed and organized such

that it has value and relevance to managers.


Jaipuria Institute of Management, Noida Pragya 1
Benchmarking of Best Practices

Benchmark

• The standard of excellence against which to measure and compare.

Benchmarking

• Is the search for the best practices among competitors or non-


competitors that lead to their superior performance.

• Is a control tool for identifying and measuring specific performance


gaps and areas for improvement
Jaipuria Institute of Management, Noida Pragya 1
Contemporary Issues in Control

Workplace Concerns
• Workplace privacy versus workplace monitoring:
• E-mail, telephone, computer, and Internet usage

• Productivity, harassment, security, confidentiality, intellectual property protection

• Employee theft
• The unauthorized taking of company property by employees for their personal use.

• Workplace violence
• Anger, rage, and violence in the workplace is affecting employee productivity

Jaipuria Institute of Management, Noida Pragya 1


Contemporary Issues in Control

Corporate Governance
• The system used to govern a corporation so that the interests of the
corporate owners are protected.

• Changes in the role of boards of directors

• Increased scrutiny of financial reporting (Sarbanes-Oxley Act of 2002)


 More disclosure and transparency of corporate financial information

 Certification of financial results by senior management

Jaipuria Institute of Management, Noida Pragya 2

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