Why the four steps involved in the controlling function are important

The actual dollar cost of a control might be considerably less than it first appears because some devices that provide control may already be in place for other reasons.

types of controlling

If the effort is in a different direction altogether, the process of controlling weeds it out. Reviews can provide effective control in several ways by: correcting potentially harmful behavior before the full damaging effects are felt; or influencing behavior just by the threat of an impending review, such as causing extra care in the preparation of an expenditure proposal.

In some situations, well-trained, highly motivated personnel can be expected, with a high degree of certainty, to perform their jobs satisfactorily without any additional control steps being taken.

Steps in controlling process

The greater the knowledge about how actions bring about results, the greater the possibilities of using a tight, specific-action-oriented control system. This is because the effectiveness of planning and all other functions are gauged and understood through the process of controlling. Some of the qualities, benefits, and costs of each of the major control types are listed in Table 2. This simple solution will also work where multiple products with varying profitabilities are involved, if the commission schedules are varied so that rewards are assigned in proportion to the profitability of the sales generated. Deviations can be referred to all those factors present in the actual output that prove distinct and different from the established standard. It might be possible to define some factors that are strong predictors of sales success, such as customer satisfaction with the salesperson or customer familiarity with the company's products. Would you be able to provide me with some examples to better help my understanding? Also without control, you will not be able to actionable lead the workforce.

This simple solution will also work where multiple products with varying profitabilities are involved, if the commission schedules are varied so that rewards are assigned in proportion to the profitability of the sales generated.

Two solutions are possible. As with action-accountability systems, results-accountability systems are future-oriented; they attempt to motivate people to behave appropriately.

It involves comparing the measured results with the standards already set.

Steps in control process ppt

If the effort is in a different direction altogether, the process of controlling weeds it out. While perfect measures are rarely available, reasonable surrogates can often be found or developed. It is, however, a relatively easy task to measure the economic performance of the movie and the artistic merit, if that is a concern. Steps must often be taken either to increase goal congruence or to prevent employees from acting in their own interest where goal incongruence exists. Of course, managers do not have to rely exclusively on a single type of control in a control system. An Example: Control of a Sales Force The above observations about control can be illustrated by describing how control of a sales force might work. However, non-measurable or intangible standards of performance are difficult to gauge. The causes may include incorrect planning, coordination lapses, defective implementation, ineffective communication and inefficient supervision etc. During such a process the amount or the nature of use of various resources also comes under strict scrutiny. But most sales managers are not willing to rely exclusively on hiring and training good people. Computers and other means of automation reduce the organization's exposure to control problems because they can be set to perform appropriately that is, as the organization desires , and they will perform more consistently than do human beings. One important class of problems against which control systems guard may be called personal limitations. Thus, more control should be exercised over a strategically important behavior rather than over a minor one, regardless of how easy it is to control each. It involves ensuring that the remedial actions so taken are bearing fruit and are effective.

Personnel controls can be very effective by themselves in some situations, such as in a small family business or in a professional partnership, because the underlying causes of the needs for controls personal limitations and lack of goal congruence are minimal.

A prerequisite, of course, is the ability to measure results, so feedback can only be useful in the situations presented in boxes 1 and 3 of Figure 1.

Importance of controlling in management ppt

Taking corrective action. In some circumstances, the control problems can be avoided, for example, by centralizing or automating certain decisions. Expected performance can be defined broadly, for instance, with a goal for annual net income. Standard elements form precisely worded, measurable objectives and are especially important for control. An understanding of control can be an important input into many management decisions. Creditors probably already require pro forma financial statements. Conclusions This article has taken a new look at the most basic organizational control problem — how to get employees to live up to the plans that have been established. The main object of remedial actions would be Negative deviations. A third avoidance possibility is risk-sharing with an outside body, such as an insurance company. Alternatively, expected performance can be defined in more detailed form by prescribing goals for specific result areas for example, sales growth, efficiency, quality and by using line items with short time horizons e. Specific-action and results controls can provide widely varying amounts of control. The patterns in this data base can be analyzed and compared with results over time to add to knowledge about which activities yield the best results. Figure 1: Key Control Object Feasability Determinants In box 3 of Figure 1, where knowledge of desirable specific actions is poor but good results measurements are available, control is best accomplished by controlling results.

It is usually not possible to prescribe and keep track of the specific actions each manager should be performing, but it is relatively easy to define the results desired, in terms similar to those desired by shareholders.

It involves ensuring that the remedial actions so taken are bearing fruit and are effective.

Functions of controlling

Consider, for example, this statement by a sales and marketing consultant: I think I can tell a good salesman just by being around him. Control can also reveal inappropriate standards and in that case, the corrective action could involve a change in the original standards rather than a change in performance. The creation and the prior establishment of standards is the first step involved in the process of controlling. Perhaps the most serious common problem is a failure to define the results areas correctly. Specific-action controls should dominate where there is knowledge about which actions are desirable but where results measurement is impossible or difficult, as indicated in box 2 of Figure 1. Would you be able to provide me with some examples to better help my understanding? There are 4 steps that are involved in the process of controlling and they are:- Establishment of standards Standards are benchmarks that we can compare a particular output to. There are three reasons why feedback of past results is an important part of many control systems. The four steps you have outlined are important to management so that they know what they want, how to measure what they want, they review what they did compared to what they wanted to do, and they change actions to be better aligned with desired objectives. The best solutions, however, vary between situations. Sign up Please enter a valid email address Thank you for signing up Privacy Policy Figure 1 shows how the two factors most limiting control feasibility — knowledge of desirable actions and the ability to measure results on the important performance dimensions — can influence the choice of controls used. The options can be classified according to the object of control, labeled in this article as specific actions, results, and personnel. Taking Corrective Action This step becomes essential if performance falls short of standards and the analysis indicates that corrective action is required.
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Four Steps of Controlling Process