1. WEEK 14
CONTROLLING FUNCTION
Lecture Outline
Preview Learning
Lecture Learning Objectives
Lecture Delivery
Post-Class Readings
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2. INTRODUCTION TO CONTROLLING
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CHAPTER
18

3. LEARNING
OBJECTIVES
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 To explain the
nature and
importance of
control.
 To describe the
three steps in the
control process.
 To explain how
organizational
performance is
measured.
 To describe tools
used to measure
organizational
performance.
 To discuss
contemporary
issues in control.

4. FAZEELAT MASOOD 4

5. WHAT IS CONTROL?
 Controlling
 The process of monitoring, comparing, and
correcting work performance.
 In this process, activities are monitored 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
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6. 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 FAZEELAT MASOOD 6

7. THE PLANNING–CONTROLLING LINK
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If managers didn’t control,
they’d have no way of
knowing whether their
goals and plans were being
achieved and what future
actions to take.

8. THE CONTROL PROCESS
 The control process is a three-step
process involving:
 Measuring actual performance.
 Comparing actual performance against a
standard.
 Taking action to correct deviations or
inadequate standards.
 The control process assumes that
performance standards already exist, and
they do.
 They’re the specific goals created during
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9. THE CONTROL PROCESS
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10. 1. MEASURING ACTUAL
PERFORMANCE
To determine what actual performance
is, a manager must first get
information about it.
Thus, the first step in control is
measuring.
 How we measure?
 What we measure?
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11. HOW WE MEASURE
Four approaches used by managers to
measure and report actual
performance are:
1. Personal observations,
2. Statistical reports,
3. Oral reports, and
4. Written reports.
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12. SOURCES OF INFORMATION FOR MEASURING
PERFORMANCE
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13. WHAT WE MEASURE
 What to measure is probably more critical to
the control process than how it’s measured.
Why?
 Because selecting the wrong
criteria can create serious
problems.
 What is measured often determines
what employees will do.
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14. 2. 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
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15. ACCEPTABLE RANGE OF VARIATION
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16. 3. TAKING MANAGERIAL ACTION
 Managers can choose among three possible
courses of action:
1) Do nothing,
2) Correct the actual performance, or
3) Revise the standards.
 Option 1: “do nothing”
 It is self-explanatory.
 Only if deviation is judged to be
insignificant.
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17. 3. TAKING MANAGERIAL ACTION
 Option 2: Correct 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.
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18. 3. TAKING MANAGERIAL ACTION
Option 3: Revise 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.
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19. MANAGERIAL DECISIONS IN THE CONTROL
PROCESS
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20. CONTROLLING FOR ORGANIZATIONAL
PERFORMANCE
 What Is Performance?
 The end result of an activity.
 What Is Organizational Performance?
 The accumulated end results of all the organization’s
work processes and activities.
 It’s a multifaceted concept, but managers need to
understand the factors that contribute to
organizational performance.
 Designing strategies, work processes,
and work activities.
 Coordinating the work of employees.
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21. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
All managers need appropriate tools
for monitoring and measuring
organizational performance.
There are three specific types of
control tools:
1) Feedforward Control;
2) Concurrent Control;
3) Feedback Control. FAZEELAT MASOOD 21

22. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
 Feedforward Control
 A control that prevents anticipated problems before actual
occurrences of the problem.
 It is kind of control that prevents problems because it takes
place before the actual activity.
 Building in quality through design.
 Requiring suppliers conform to ISO 9002.
 The key to feedforward controls is taking managerial
action before a problem occurs.
 That way, problems can be prevented rather than having
to correct them after any damage (poor-quality
products, lost customers, lost revenue, etc.) has already
been done.
 However, these controls require timely and accurate
information that isn’t always easy to get. FAZEELAT MASOOD 22

23. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
Concurrent Control
 A control that takes place while (during)
the monitored activity is in progress.
 The best-known form of concurrent
control is direct supervision or
Management by walking around.
All managers can benefit from using
concurrent control because they can
correct problems before they become
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24. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
Feedback Control
 A control that takes place after the 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
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25. TYPES OF CONTROL
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26. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
Financial Control
 Every business wants to earn a profit.
 To achieve this goal, managers need
financial controls.
 Managers might use traditional financial
measures such as ratio analysis and
budget analysis.
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27. TOOLS FOR MEASURING
ORGANIZATIONAL PERFORMANCE
 Balanced Scorecard
 It is a way to evaluate organizational performance
from more than just the financial perspective.
 A balanced scorecard typically looks at four areas
that contribute to a company’s performance.
1) Financial;
2) Customer;
3) Internal processes;
4) People/innovation/growth assets.
 It 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.
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28. INFORMATION CONTROLS
Purposes of Information Controls
 As a tool to help managers control other
organizational activities.
 Managers need the right information at the right
time and in the right amount.
 As an organizational area that managers
need to control.
 Managers must have comprehensive and secure
controls in place to protect the organization’s
important information. FAZEELAT MASOOD 28

29. BENCHMARKING OF BEST
PRACTICES
 Benchmark
 The standard of excellence against which to
measure and compare.
 Benchmarking
 It is the search for the best practices among
competitors or noncompetitors that lead to
their superior performance.
 It is a control tool for identifying and
measuring specific performance gaps and
areas for improvement. FAZEELAT MASOOD 29

30. SUGGESTIONS FOR INTERNAL BENCHMARKING
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31. CONTEMPORARY ISSUES IN
CONTROL
 Adjusting Controls for Cross-Cultural
Differences;
 Workplace concerns such as monitoring
employees’ computer usage at work.
 Workplace privacy
 Employee theft - any unauthorized
taking of company property by
employees for their personal use.
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32. CONTROLLING EMPLOYEE THEFT
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33. CONTEMPORARY ISSUES IN
CONTROL
Workplace violence;
Controlling Customer Interactions;
Corporate governance - the system
used to govern a corporation so that
the interests of corporate owners are
protected.
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34. REFERENCE READING &
ASSIGNMENTS
Reference Reading
 Robbins, S., & Coulter, M. (2012). Management.
11th Edition. Pearson Education.
 Chapter 18: Introduction to Controlling.
Post Class Readings
 Watch & learn from video clip on controlling.
Post Class Assignment
 Prepare for presentations next week.
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