ELEMENTS OF CHAPTER 9

CONTROL
LEARNING OBJECTIVES
■ Understand the nature of control
■ Understand the importance of control
■ Understand the different types of control
■ Understand the responsibilities of control
■ What is the Feedforward
■ Understand the controlling steps
■ Understand the feedback process
■ Understand the concurrent process
■ The areas of control
■ How to ensure an effective controlling process
1- Nature Of Control
Controlling is one of the managerial functions. Organizational control refers
to the systematic process of regulating organizational activities to make them
consistent with the expectations established in plans, targets, and standards of
performance
Control is the regulation of organizational activities so that some targeted
element of performance remains within acceptable limits.
Without controlling, organizations do not know how well they are performing
in relation to their goals. Control, keeps the organization moving in the proper
direction.
So the function of controlling helps to achieve the desired goals
by planning. Management must, therefore, compare actual results with pre-
determined standards and take corrective action of necessary.
At any point in time, it compares where the organization is in terms
of performance (financial, productive, or otherwise) to where it is supposed to be.
2- Importance Of Control:
Controlling is regarded as an important management function. Every manager needs to perform it.
Proper controlling measures are often found to be helpful in improving the effectiveness of
the other functions of the management.
The importance of controlling in any organization:
A. Controlling is implemented with the purpose of achieving the organizational
objectives. Controlling detects any kind of deviation and accordingly corrective actions are
implemented. This helps in reducing the gap between expected and actual results.
B. An organization has to cope with many changes in the environment, such as new products and
technologies or changes in strategies of the competitors.
C. Controlling allows the manager in minimizing the wastage of resources and ensuring
proper utilization of the available resources.
D. Managers always compare the work done with a set of provided standards defined for the work
that will lead to accurate determination of process efficiency.
E. Controlling leads to better decision making and improves the
overall performance of the organization.

F. In an organization employees are motivated and are also aware that

their performance is judged using some set of standards.

G. Controlling enables employees to be bound by the rules which

reduce unprofessional behavior in the organization.

H. Controlling provides a common direction to all the activities of the organization

3- Types of Control
Organizations practice control in a number of different areas, and at different levels,
and the responsibility for managing control as well as the time of control.
3.1) Areas of Control Control focuses on different areas in an organization. As control in
terms of the four basic types of resources they use: physical, human, information, and
financial.
1- Control of physical resources includes inventory management, quality control
(maintaining appropriate levels of output quality), and equipment control (supplying the
necessary facilities and machinery).
2- Control of human resources includes selection and placement, training and
development, performance appraisal, and compensation. Organizations controls
behavior of employees—directing them toward higher performance.
3- Control of information resources includes sales, public relations, production
scheduling marketing forecasting, environmental analysis, and economic forecasting.
4- Financial control involves managing the organization’s financial obligations,
ensuring that the firm always has enough cash on hand to meet its obligations.
3.2) Levels of Control
■ Control can be broken down by level within the organizational system, as
follows:
■ 1- Operations control focuses on the processes the organization uses to
transform resources into products or services. Quality control is one type of
operations control.
■ 2- Financial control is concerned with the organization’s financial resources for
example, monitoring receivables to make sure customers are paying their bills
on time.
■ 3- Structural control is concerned with how the elements of the organization’s
structure are serving their intended purpose for example to make sure staff
expenses do not become excessive.
■ 4- Finally, strategic control focuses on how effectively the organization’s
corporate, business, and functional strategies are succeeding in helping the
organization meet its goals.
3.3) Kinds according to time
■ There are three kinds of control that are based on time
■ Feedforward control.
■ Concurrent control.
■ Feedback control.

1- Feed forward Control:

This type is carried out before implementation. This type of control is called
preventive control. It seeks to prevent errors and deviations by making sure that
all performance inputs are available in terms of quantity and quality.
2- Concurrent Control:
This control occurs when the activity is still in the process. This control
can also be referred to as steering or real-time control. Thus, this control
is associated with adjusting a performance before any high damage is
done. This type of control follows up actual results and detects gaps and
deviations as they take place.
3- Feedback Control:
This type is carried out after implementation. Feedback is the process
that adjusts future actions based on the information about past
performance. Although feedback is done after the process, it is a very
important part of the control process. Feedback is very important for
continuous activity. Also, it enables to take a corrective course of action.
3.4) Responsibilities for Control

Managers are responsible for overseeing the wide array of control

systems and concerns in organizations.
They implement control systems and take actions based on the
information provided by control systems.
Larger organizations also have one or more specialized managerial
positions called controller. A controller is responsible for helping line
managers with their control activities, for coordinating the
organization’s overall control system, and for gathering and assimilating
relevant information.
Many organizations use operating employees to help maintain effective
control. Indeed, employee participation is often used as a vehicle for
allowing operating employees an opportunity to help facilitate
organizational effectiveness.
4- The Controlling Process
■ The control process is a process for organizational control that arises from the
goals and strategic plans of the organization.

There are 4 Steps of Control Process are:

1. Establishing standards and methods for measuring performance.
2. Measuring performance.
3. Determining whether performance matches the standard.
4. Taking corrective action.
1) Establishing Standards
Standards are simply the criteria of performance. Managers must translate plans
into performance standards, Standard elements form measurable objectives and
are especially important for control.
These performance standards can be in the form of goals, such as revenue from
sales over a period of time, time customers have to wait in the queue at a bank.
The standards should be attainable, measurable, and clear.
They are the selected points in an entire planning program at which performance
is measured so that managers can know how they are doing and thus do not have
to watch every step in the execution of plans.
2. Measuring the Performance
The measurement of performance against standards is important so that deviations could be
corrected. It could be done on a forward-looking basis so that deviations may be detected in
advance of their occurrence and avoided by appropriate actions.
Several methods are used for measuring the performance of the organization.
If standards are appropriately set up and if means are available for determining exactly what
subordinates are doing, appraisal of actual or expected performance is fairly easy. However, there
are many activities for which it is difficult to develop accurate standards, and there are many
activities that are hard to measure.
It may be quite simple, for example, to establish laborhour standards for the production of a mass-
produced item and it may be equally simple to measure performance against these standards.
However, controlling the work of the industrial relations manager is not easy because definite
standards cannot be easily developed. The superior of this type of manager often rely on vague
standards, such as the attitude of labor unions, the enthusiasm, and loyalty of subordinates, and
the index of labor turnover.
If performance is not measured, it cannot be ascertained whether standards have been met.
3. Determining whether Performance
Matches the Standard
Determining whether performance matches the standard is an important step in
the control process. It involves comparing the measured results with the standards
already set.
Managers must determine why standards were not met. This step also involves
determining whether more control is necessary or if the standard should be
changed.
If performance matches the standard then everything is under control. In such a
case the managers do not have to intervene in the organization’s operations.
4. Taking Corrective Action
This step becomes essential if performance falls short of standards and the analysis indicates that
corrective action is required. Taking corrective action should be taken after the reasons for
deviations have been determined; managers can then develop solutions for issues with meeting
the standards and make changes to processes or behaviors. The corrective action could involve a
change in one or more activities of the organization’s operations. For example, a bank manager
might discover that more counter clerks are needed to meet the customers waiting.
Anyone who is a manager, has to involve into control – may be chairman, managing director, CEO,
departmental head, or first line manager. However, at every level the control will differ – top
management would be involved in strategic control, middle management into tactical control and
lower level into operational control.
Unless managers see the control process through to its conclusion, they are merely monitoring
performance rather than exercising control.
9) Effective control system:
To develop an effective control system without error for the organization; these
principles must be followed:
1.Matching controls to plans and position.
2.Ensuring flexibility to control.
3.Ensuring accuracy.
4.Seeking objectivity of controls.
5.Achieving the economy of controls.
6.Tailoring control to individual managers.
7.Pointing up exceptions.
8.Fitting the system of control to the organizational culture.
9.Ensuring corrective action through control. An effective organization is one where
managers understand how to manage and control. The objective of control as a
concept and process is to help motivate and direct employees in their roles.
Understanding managerial control process and systems is essential for the long-
term effectiveness of an organization.
Good management control system is essential for the success of an organization
Good control means that management can be confident that no major unpleasant
unexpected events will occur. A good management control still allows for some
probability of failure.
A perfect control occurs where there is complete assurance that all the controls
put in place by management are flawless, and all the individuals whom the
organization must rely always act in the best possible way.
An ideal control is unrealistic because no matter how perfect we strive to be, we
are only humans.