11.1 Definition of control:
CONTROL = the regulatory task of management that determines whether there has been a deviation
in org plans so that steps can be taken to prevent &/or rectify errors or deviations from plans
Final step in management process
Without control = org have no indication of how well they are performing in relation to goals
Keep org moving in proper direction
At any point in time – control compare where org is in terms of performance to where it is
supposed to be
Provide org with mechanism for adjusting its course if performance falls outside acceptable
boundaries
Without effective control procedures in place – org unlikely to reach goals
Continuous process & intertwined with planning, organising & leading
11.2 The importance of control:
REASONS WHY CONTROL IS IMPORTANT
Ensure activities at all levels are in accordance with orgs overall objectives – provide coordinating
mechanism linking planning & control processes
Ensure resources are deployed in way attaining objectives
Increase quality & enables management to cope with environmental change & uncertainty – help
managers anticipate, monitor & respond to changing circumstances
Ensure costly mistakes are avoided
Ensure orgs are tightly run in order to compete – reduce costs & increase outputs
Facilitates delegation & team work
11.3 The control process:
CONTROL PROCESS = process that ensure org goals & objectives are realised or that actual
performance ties with predetermined performance
CONTROL PROCESS ENTAINS FOUR STEPS
1. Establish standards of performance
2. Measure actual performance
3. Evaluate deviations
4. Take corrective actions
1
,11.3.1 Establish standards of performance:
CONTROL STANDARD = a target against which subsequent performance will be compared
CONTROL STANDARDS CRITERIA
Expressed in measurable terms
Consistent with org goals
Realistic
Identify performance indicators
PERFORMANCE INDICATORS = measures of performance that provide info that’s directly relevant to
what is being controlled
Example = when control focused on revenue – monthly sales increases are relevant (spending
funds on research & development less relevant)
11.3.2 Measure actual performance:
= collecting data & reporting on actual performance
VARIABLES OF MEANINGFUL COMPARISON
Reliable info
Quantifiable info
Observation & measurement should be in accordance with control system:
They should occur at strategic points &
According to standards determined by control system
EXAMPLE
o Daily, weekly, monthly sales figures – measure sales performance
o Unit costs, product quality or volume produced – production performance
o Quality or quantity of output – employee performance
2
, 11.3.3 Evaluate deviations:
= comparing measured performance against established standards
Actual performance higher than standard = standard determined too low & must be higher in
future
Actual performance lower than standard = how much deviation from standard to allow before
taking remedial action
CONTROL BY EXCEPTION
= Only exceptional differences between actual & planned performance should be communicated to
top management whereas subordinates deal with less significant deviations
11.3.4 Take corrective action:
= determine need for corrective action
Aimed at achieving or bettering performance standard &
Ensuring differences do not recur
Serve as input to the subsequent control process &
Indicates the standard of performance
If there’s significant deviation – corrective action may include:
o Improving actual performance
o Revising strategy or
o Lowering performance standards
11.4 The levels of control:
TWO BASIC LEVELS OF CONTROL
1. Strategic control
2. Operations control
Strategic control
Exercised at top management level & entails a close study of org’s:
o Total effectiveness
o Productivity
o Management effectiveness
o Maturity
3
CONTROL = the regulatory task of management that determines whether there has been a deviation
in org plans so that steps can be taken to prevent &/or rectify errors or deviations from plans
Final step in management process
Without control = org have no indication of how well they are performing in relation to goals
Keep org moving in proper direction
At any point in time – control compare where org is in terms of performance to where it is
supposed to be
Provide org with mechanism for adjusting its course if performance falls outside acceptable
boundaries
Without effective control procedures in place – org unlikely to reach goals
Continuous process & intertwined with planning, organising & leading
11.2 The importance of control:
REASONS WHY CONTROL IS IMPORTANT
Ensure activities at all levels are in accordance with orgs overall objectives – provide coordinating
mechanism linking planning & control processes
Ensure resources are deployed in way attaining objectives
Increase quality & enables management to cope with environmental change & uncertainty – help
managers anticipate, monitor & respond to changing circumstances
Ensure costly mistakes are avoided
Ensure orgs are tightly run in order to compete – reduce costs & increase outputs
Facilitates delegation & team work
11.3 The control process:
CONTROL PROCESS = process that ensure org goals & objectives are realised or that actual
performance ties with predetermined performance
CONTROL PROCESS ENTAINS FOUR STEPS
1. Establish standards of performance
2. Measure actual performance
3. Evaluate deviations
4. Take corrective actions
1
,11.3.1 Establish standards of performance:
CONTROL STANDARD = a target against which subsequent performance will be compared
CONTROL STANDARDS CRITERIA
Expressed in measurable terms
Consistent with org goals
Realistic
Identify performance indicators
PERFORMANCE INDICATORS = measures of performance that provide info that’s directly relevant to
what is being controlled
Example = when control focused on revenue – monthly sales increases are relevant (spending
funds on research & development less relevant)
11.3.2 Measure actual performance:
= collecting data & reporting on actual performance
VARIABLES OF MEANINGFUL COMPARISON
Reliable info
Quantifiable info
Observation & measurement should be in accordance with control system:
They should occur at strategic points &
According to standards determined by control system
EXAMPLE
o Daily, weekly, monthly sales figures – measure sales performance
o Unit costs, product quality or volume produced – production performance
o Quality or quantity of output – employee performance
2
, 11.3.3 Evaluate deviations:
= comparing measured performance against established standards
Actual performance higher than standard = standard determined too low & must be higher in
future
Actual performance lower than standard = how much deviation from standard to allow before
taking remedial action
CONTROL BY EXCEPTION
= Only exceptional differences between actual & planned performance should be communicated to
top management whereas subordinates deal with less significant deviations
11.3.4 Take corrective action:
= determine need for corrective action
Aimed at achieving or bettering performance standard &
Ensuring differences do not recur
Serve as input to the subsequent control process &
Indicates the standard of performance
If there’s significant deviation – corrective action may include:
o Improving actual performance
o Revising strategy or
o Lowering performance standards
11.4 The levels of control:
TWO BASIC LEVELS OF CONTROL
1. Strategic control
2. Operations control
Strategic control
Exercised at top management level & entails a close study of org’s:
o Total effectiveness
o Productivity
o Management effectiveness
o Maturity
3
