Controlling

Controlling involves ensuring that performance does no deviate native standards. Controlling is composed of five steps: (1) set standards, (2) measure performance, (3) to compare performance to standards, (4) recognize the factors for deviations and also then (5) take corrective activity as needed (see figure 1, below). Corrective action can include changes made to the power standards—setting them greater or reduced or identifying brand-new or extr standards. Performance standards are often stated in financial terms such as revenue, costs, or profits yet may likewise be proclaimed in other terms, such as devices produced, number of defective products, or level of quality or customer service.

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Figure 1. Five-Step regulate Process


The measure of performance deserve to be done in number of ways, depending upon the power standards, including financial statements, sales reports, production results, customer satisfaction, and formal power appraisals. Supervisors at every levels communicate in the managerial role of regulating to some degree.

The managerial role of controlling should not be confused with manage in the behavioral or manipulative sense. This duty does not imply that supervisors should effort to manage or come manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management involves the manager’s duty in taking important actions to ensure that the work-related tasks of subordinates are continuous with and contributing toward the success of organizational and departmental objectives.

Effective controlling requires the existence of plans, due to the fact that planning offers the necessary performance standards or objectives. Controlling likewise requires a clear knowledge of where obligation for deviations from criter lies. Two timeless control approaches are budget and also performance audits. An audit involves an examination and verification the records and also supporting documents. A spending plan audit offers information about where the company is through respect come what was planned or budgeted for, conversely, a performance audit might shot to recognize whether the numbers reported space a have fun of actual performance. Although regulating is regularly thought the in terms of financial criteria, managers must also control production and also operations processes, actions for delivery of services, compliance with firm policies, and also many other tasks within the organization.

Controls likewise come in ~ a cost. It is advantageous to understand that there are trade-offs in between having and also not having organizational controls. Let’s look at several of the costs and also benefits of organizational controls.

Costs

Financial costs—direct (i.e., paying because that an accountant because that an audit) and indirect (i.e., people employed through the organization whose primary role is related to control—internal top quality control, for instance).

Culture and reputation costs—the intangible costs associated with any form of control. Examples incorporate damaged relationships through employees or tarnished reputation with investors or government.

Responsiveness costs—downtime between a decision and the actions required to implement it because of compliance with controls.

Poorly applied controls—implementation is botched or the implementation the a brand-new control disputes with various other controls.

Benefits

Cost and also productivity control—ensures the the firm features effectively and efficiently.

Quality control—contributes to cost manage (i.e., fewer defects, much less waste), client satisfaction (i.e., fewer returns), and greater sales (i.e., repeat client and brand-new customers).

Opportunity recognition—helps supervisors identify and also isolate the resource of confident surprises, such together a brand-new growth market. Though methods can additionally be found in inner comparisons of expense control and also productivity across units.

Manage uncertainty and also complexity—keeps the organization concentrated on that is strategy, and helps managers anticipate and detect an unfavorable surprises and also respond opportunistically to hopeful surprises.

Decentralized decision making—allows the company to be an ext responsive by relocating decision making to those closest come customers and also areas that uncertainty.

The management attributes of planning, organizing, leading, and controlling room widely taken into consideration to be the best method of explicate the administer job, and also the best way to classify built up knowledge about the study of management. Although there have actually been tremendous alters in the environment confronted by managers and also the tools offered by managers to execute their roles, supervisors still perform these important functions.


KEY TAKEAWAYS

The control role can be regarded as a five-step process: (1) develop standards, (2) measure performance, (3) to compare actual performance through standards and also identify any type of deviations, (4) determine the factor for deviations, and also (5) take corrective action, if needed.


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