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Supervisory Management
Week 9: Lecture 2 - Controlling
Control: outcomes
• The purpose of control
• How control processes work
• Various types of control
• Characteristics of an effective control system
The purpose of control
• Provides feedback
The purpose of control
• Helps adapt to change
The purpose of control
• Helps reduce errors
The purpose of control
• Helps cope with increasing complexity & size
The purpose of control
• Helps minimise costs
The control process
1
setting
standards
2
measuring
performance
3
evaluating
deviations
4
correcting
1. Setting standards
1
setting
standards
2
measuring
performance
3
evaluating
deviations
4
correcting
Control = revised planning
Standards should be:
• relevant
• realistic
• attainable
• worthwhile
1. Setting standards
relevant realistic attainable worthwhile
standard
tolerance
2. Measuring performance
1
setting
standards
2
measuring
performance
3
evaluating
deviations
4
correcting
Control should be
• quantifiable
Reports to be
• reliable
2. Measuring performance
quantifiable reliable
3. Evaluating deviations
1
setting
standards
2
measuring
performance
3
evaluating
deviations
4
correcting
Large deviations should be
investigated.
3. Evaluate deviations
quantifiable reliable
standard
tolerance
Large deviation
4. Correcting
1
setting
standards
2
measuring
performance
3
evaluating
deviations
4
correcting
Correcting can include:
• improving performance
• revising strategies
• lowering standards to be more
realistic
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
4. Correcting
standard
tolerance
Types of control
• Physical resources
• Financial resources
• Information resources
• Human resources
Physical resources
• Capital & assets and raw materials
inventory Stock-taking
Financial resources
Organisation
1. income
2. assets
3. expenses
BUDGET
Information resources
Human resources
Characteristics of effective control
• Integration
• Flexibility
• Accuracy
• Timeliness
• Simplicity
Summary: what is control?
• Control is a continuous process
• Control is a management process
• Control is embedded in each level of organizational
hierarchy
• Control is forward looking
• Control is closely linked with planning
• Control is a tool for achieving organizational activities
• Control is an end process
• Control compares planned performance with actual
performance
True or False?
a. Control helps cope with changes
b. Control systems increase costs in an
organisation
c. Controls helps cope with increasing size and
complexity
d. Control limits errors

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Editor's Notes

  • #10: This element of the management process can actually occur during the planning phase. Once a process has been planned, it is necessary to set standards with which to compare the performance. It is also helpful to set interim standards to ensure that the final target will be reached. For the control process to be worthwhile, the control standards should be relevant, realistic, attainable (possible) and worthwhile.
  • #12: Collecting information and reporting on actual performance are ongoing tasks. It helps if the activities are quantifiable and if the reports are reliable.
  • #14: Once performance has been measured against the standard, the difference must be accounted for or evaluated. If deviations are large enough to be concerned, they should be investigated.
  • #16: The final step in the control process is to determine what action is necessary to correct the deviation. This may include improving the actual performance, revising the strategy or lowering standards to make them more realistic.