Controlling Functon in Management
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The document outlines the controlling process in organizational management, including steps such as establishing standards, measuring performance, identifying deviations, and taking corrective actions. It categorizes types of controls based on area and organizational structure, and discusses characteristics of effective control systems and factors affecting them. Furthermore, it addresses resistances to control and offers strategies for overcoming these challenges.
Controlling Functon in Management
- 1. Siddha Raj Bhatta Email: siddhabhatta@gmail.com Controlling
- 2. Controlling Monitoring of organizational activities so that performance remains within acceptable limits. Objective is to ensure the achievement of organizational goal.
- 3. Steps in Controlling Step 1 : Establishing Standards -Should me measurable -Should be consistent with goals -Should identify the performance indicators Step 2 : Measuring Performance -Continuous and ongoing activity -Quality/quantity -Sources : personal observation, oral, statistical and written reports
- 4. Steps in Controlling Step 3 : Finding Deviation -Checking whether performance is in standard or not ? Source : Management by Robbins and Coulter
- 5. Steps in Controlling Step 4 : Corrective Actions -Three Possible Options -1. Maintain the Status Quo -2. Correct the Deviation : change strategy, structure, compensation practices, training practices, redesign the jobs, fire employees etc. -3. Revise the standard
- 6. Purpose of Controlling Adapt to the environmental changes Managing the organizational complexity Performance monitoring Correcting mistakes Efficiency by minimizing wastes and other costs Rewards management
- 7. Types of Controls A. On the Basis of Area Physical, human informational and financial controls. -Physical resources : inventory, quality control checks, equipments etc -Human Resources : selection, placement, training, compensation, performance appraisal etc -Information resources : sales forecasting, economic forecasting, etc -Financial Resources : optimum financial resources
- 8. Types of ControlsB. On the Basis of Level of Organizational Structure 1. Strategic Control -how strategies are succeeding 2. Structural Control -how the org. structure is supporting 3. Operations Control -transformation process 4. Financial Control -organization of financial resources
- 9. Types of Controls A. Strategic Control Checks whether the structure of the organization, its human resources, technology adopted and others are contributing to the attainment of the strategic goals or not. Focuses on five areas : structure, leadership, technology, human resources and information and operational control system. If some of the above are obstructing the attainment of strategic goals, it may be necessary to alter its structure, replace key leaders, adopt new technology, modify its human resources, or
- 10. Types of Controls B. Structural Control Related to the control by through appropriate org design. Two types : Bureaucratic and Decentralized Control Bureaucratic control is an approach to organization design characterized by formal and mechanistic structural arrangements whereas Decentralized control has informal and organic structural arrangements.
- 11. Types of Controls B. Structural Control
- 12. Types of Controls C. Operations Control Concerns with the control process of the transformation of inputs into goods and services Three types : 1. Preliminary Control Also called feed forward control or pre control Related to the control during the input stage of the transformation process –input side control Focuses on financial, material, human and information resources Examples are quality specification, recruitment and selection of HR, budgets, etc.
- 13. Types of Controls C. Operations Control 2. Screening Control Also called concurrent control Control during the transformation process For instance : periodic quality checks Effective way to catch problems and minimize waste Direct supervision is the best method of this type.
- 14. Types of Controls C. Operations Control 3. Post Action Control Also called feedback control Control after the transformation process is complete Helpful to find the defect rate Provides information for further planning An effective tool for reward management
- 15. Types of Controls D. Financial Control Control related to the financial resources Main tools of financial control are : Financial Budget : cash budget, capita budget, operating budget, non-monetary budget, etc. Financial Statements : Balance sheet, income statement and cash flow statement Ratio Analysis : liquidity, operation, leverage and profitability ratios Audits : internal audit, external audit and management audit
- 16. Characteristics of Effective Control System 1. Integration with Planning -Should be consistent with the planning objectives -Otherwise it cannot ensure the attainment of goals 2. Flexibility -Environment is dynamic and changes occur. -Control system should be flexible enough to suit the new situations
- 17. Characteristics of Effective Control System 3. User friendly -Should be easy to handle with by the controllers 4. Corrective Actions -Should not only find deviation but also suggest corrective actions. 5. Accuracy -Should generate accurate data and information - Otherwise, it would mislead the managerial actions
- 18. Characteristics of Effective Control System 6. Timeliness -Some problems demand immediate actions -control system should timely identify such problems and give information to the management. -should provide information as often as it is needed. 7. Strategic Focus -Not possible to have a control over everything. -Control system should focus only the critical and strategic points. -Examples could be production, sales, customer service, finance 8. Economy -The cost of the control should justify its benefits
- 19. Characteristics of Effective Control System 9. Reasonable Criteria -Criteria used in the control process should be reasonable 10. Objectivity -Not based on hunch or guesses -No place for personal biases -Should provide objective information 11. Multiple Criteria -A single criterion may not be suitable in all areas.
- 20. 2. Resistances to Control 1. Over control -If organization tries to control every activity of the employees’ daily activities, they may resists the control system. -For instance : when to come, how to dress, when to use wifi 2. Inappropriate Focus -Resistances may arises if it focuses on something inappropriately -For instance focusing too much on quantity produced ignoring its quality
- 21. 2. Resistances to Control 3. Rewards for Inefficiency -Control system may reward inefficiency. -For instance : Department A spent all of its budgets but Department B could not spent $ 50000 out of its budget. Control system may reward department B for saving its budget. -Such rewards can create resistances to the control system 4. Too Much Accountability -If the employees are made too much accountability, the managers are easily able to find out who is responsible for the mistakes. -People who don’t want to work hard and be answerable might therefore resist.
- 22. 3. Overcoming the Resistances 1. Create Effective Control System -Timely, flexible, accurate, objective, economy and acceptable 2. Employee Involvement -Ensure participation during planning, implementing and control phases. 3. Develop Verification Procedures -Develop the procedure to verify the indicators that provide evidences for or against the deviation of performances. E.g. increase in the price of raw materials may be the cause of failing to control cost rather than employee inefficiency.
- 23. 4. Factors Affecting the Control System 1. Size of the Organization -Small : informal control system - Large : formal and extensive 2. Level of Management -Lowe Level : single/ few criteria -High Level : multiple criteria 3. Degree of Decentralization -Low : low degree of control -High : high and extensive control
- 24. 4. Factors Affecting the Control System 4. Organizational Culture -Open and trustworthy : informal control system - Mistrust : full of formal and extensive control 5. Importance of an Activity -Low : loose and informal control -High : formal and comprehensive control
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Editor's Notes
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