Controlling is the measurement and

correction of performance in order to

make sure that enterprise objectives
and the plans devised to attain them
are being accomplished.

According to George R. Terry

Controlling is determining what is
being accomplished, that is
evaluating the performance and if
necessary, applying corrective
measures so that the performance
takes place according to plans.

Control
Control
Control
Control
Control

and planning are inseparable.

is a continuous process.
is forward looking
is all pervasive
has a positive approach

Authority
Knowledge
Guidance
Direction
Constraint
Restraint

Set Standards
Measure actual
performance

Feed Back

Prentice Hall, 2002

18-6

Background
controlling is a FIVE steps
The performance standards are set
specific goals are created in the planning process

Measuring
How We Measure
personal observation - permits intensive coverage
Management By Walking Around (MBWA)
drawbacks - subject to personal biases
consumes a great deal of time.

18-7

Measuring (cont.)
How We Measure (cont.)
statistical reports - numerical data are easy to
visualize and effective for showing relationships
drawbacks - not all operations can be measured
important subjective factors may be ignored

oral reports - includes meetings, telephone calls

may be best way to control work in a virtual
environment
technology permits creation of written record from oral
report
drawbacks - filtering of information

How We Measure (cont.)

written reports - often more

comprehensive and concise than
oral reports
usually easy to file and retrieve
comprehensive control efforts
should use all four approaches

18-9

What We Measure

what we measure more critical than how we measure

control criteria applicable to any management situation:
employee satisfaction, absenteeism, and turnover
keeping costs within budgets

control system needs to recognize the diversity of

activities
some activities difficult to measure in quantifiable terms
most activities can be grouped into some objective segments
that can be measured

Comparing

determines the degree of variation

between actual performance and
standard
acceptable range of variation deviations that exceed this range
become significant

Measurement of Performance

Acceptable
Upper Limit
Acceptable
Range of
Variation

Standard

Acceptable
Lower Limit

t+1

t+2

t+3

Time Period (t)

t+4

t+5

Brand

Sony
Volta
LG
Videiocon
Samsung
Haier
Onida
Benq
T-series
Total Sales

Standard*

Actual*

1,075
630
800
620
540
160
225
80
170
4,300

913
634
912
622
672
140
220
65
286
4,464

Over (under)*

(162)
4
112
2
132
(20)
(5)
(15)
116
164

Taking Managerial Action

Correct Actual Performance - action taken when
the performance variation is unsatisfactory
immediate corrective action - corrects problems at
once to get performance back on track
basic corrective action - identifies reason for
performance variation
corrects the source of variation

Revise the Standard - variance results from an

unrealistic standard
standard, not performance, needs correction
troublesome to revise the standard downward

 Feed

back:-

The feedback information is provided to the

responsible heads of the Dept.
If the feedback is positive reveals
accomplishment and the manager must
encourage.
Negative feedback the manager should take
corrective actions and alter the operation.

Feed-looking Control

prevents anticipated problems

most desirable type of control
requires timely and accurate
information that often is difficult to get

Feed forward control

takes place while activity is in progress

corrects problem before it becomes too
costly
best-known form is direct supervision

Yes-No

Control

Work is stopped at various stages & at certain events

for inspection.
Check for deviations.
After screening GO AHEAD signal is given.
(engineering & automobiles products).
Post-

action control

Used after the completion of the activity.

18-

Input

Forward looking
Control
Anticipates
problems

Processes

Feed Forward
&
Yes-No control

Corrects
problems as
they happen

Output

Post action
Control
Corrects
problems after
they occur

Human factor

Suitability

Forward looking

Remedial action

timeliness

EFFECTIVE
CONTROL
SYSTEM

Economical

Flexibility

objective
Understandability

18-20

Budgetary control

Non-budgetary controls

Network analysis & modern

techniques

Budgetary control refers to use of a budget as a

control technique. A budget is an estimate of
future need arranged in an orderly basis, covering
some or all the activities of an enterprise for an
definite period of time.

It brings in efficiency & economy in the

working of business enterprise.

It helps in the determination of periodical

objectives.

It introduces precision, discipline, and

direction.

It coordinates & integrates the operations.

It provides standards against which the

actual performance can be measured.

It motivates subordinates.

It helps in participative management.

It helps in forecasting.

Budget create a rigid financial structure.

It cannot judge the actual results.

They sometimes become expensive,

meaningless & cumbersome.

There may be a danger of over-budgeting

Statistical data & charts

Internal audit
Special reports
Confidential reports
Breakeven analysis
Information control
Personal observation.

They are the most common form of non-budgetary

control. statistical information of the past & data indented
for the future can be used for control.

Internal audit:

Management can make use the technique of internal

audit for checking & controlling operations.

Special reports:

Executives can give special reports for certain special

projects of non-repetitive situations. Such reports can also be
given on the progress & performance of individuals &
departments.

In certain organization, there is a practice of getting

confidential reports from the supervisors on the abilities and other
information about subordinates.

Breakeven analysis:
It is an analysis in chart form depicting the cost-volume-profit
relationship. The breakeven point is that where the total cost is equal to
the total revenue. This charts helps in forecasting, budgeting cash
requirement etc.

Information control:
With the increased complexities in operations, it has become
necessary to have more sophisticated system of collection, processing,
Storing & applying the information. This system can be called
information control.

Control through personal observation will provide

immediate & authentic information regarding the
performance & its matching with the standards.

There are two techniques:

CPM(

Critical Path Method)

PERT(Programme

Technique)

Evaluation and Review

CPM differentiates between planning and

scheduling of the project.
Focuses mainly towards activities.

example: Preparation of dealer questionnaire.

( 10 days)
Dealer survey(20 days)
Consumer survey(15 days)

It helps in ascertaining the time schedule.

It makes control easier for the

management.

It identifies the most critical elements in the

project.

PERT has very popular technique used for

project planning and control. It
accomplish the project within a short
period of time.

The three sets of time used in this

techniques are optimistic time, pessimistic
time, and normal time.

7
1 location of site started
2 location of site
completed
3 BUILDING for office
selected
4 cleaning of building
started
5 Interior decorator start

10

6 Interior decorator
finishes work
7 opening of ads n
announced
8 list of invitees for opng
9 invitation sent
10 office formally

It determines the expected time required for

completing each activity.
It helps complete the project within a given
period of time.
It helps management handle uncertainties
involved in the project.

PERT

CPM

1. It is an event oriented
approach.

1. It is an activity
oriented approach.

2. It is time based.

2. It is cost based.

3. It is average time.

3. It does not average

time.
4. It does not allow
uncertainty.

4. It allows uncertainty

Presented by :Anoop.S (813)

Anupama.H(81
4)
Jayashri.H(819)
Praveen.A(826)