Chapter 7: Controlling Function – Exam Notes

7.1 Definition of Controlling

 Controlling is the process by which managers ensure that actual
activities conform to planned activities.
 It involves setting standards, measuring performance,
comparing results with standards, and taking corrective action.
 Purpose: ensure organizational goals and plans are achieved.
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7.
2
I
m
p
or
ta
n
c
e
of
C
o
nt
ro
lli
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g
C
o
nt
ro
lli
n
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is
e
ss
e
nt
ia
l
b
e
c
a
u
s
e
it:
1.
A
d
a
p
t
s
t
o
c
h
a
n
g
i
n
g
c
o
n
d
it
io
n
s
–
h
el
p
s
or
g
a
ni
z
at
io
n
s
re
s
p
o
n
d
to
d
y
n
a
m
ic
e
n
vi
ro
n
m
e
nt
s.
2.
Li
m
it
s
m
a
g
n
i
fi
c
a
ti
o
n
o
f
e
rr
o
r
s
–
d
et
e
ct
s
s
m
al
l
m
is
ta
k
e
s
b
ef
or
e
th
e
y
gr
o
w
.
3.
P
r
e
v
e
n
t
s
f
ai
l
u
r
e
a
n
d
p
r
o
m
o
t
e
s
s
u
c
c
e
s
s
–
m
o
ni
to
rs
pr
o
gr
e
ss
to
w
ar
d
o
bj
e
ct
iv
e
s.
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7.
3
T
h
e
C
o
nt
ro
lli
n
g
Pr
o
c
e
ss
(5
St
e
p
s)
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1.
D
et
er
m
in
e
A
re
a
s
to
C
o
nt
ro
l-
Id
e
nt
if
y
c
ri
ti
c
al
c
o
n
tr
ol
p
oi
n
t
s
(a
re
a
s
vi
ta
l
to
s
u
c
c
e
ss
).
-
C
o
nt
ro
l
is
s
el
e
ct
iv
e
d
u
e
to
c
o
st
a
n
d
e
m
pl
o
y
e
e
re
si
st
a
n
c
e.
#
#
#
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2.
E
st
a
bl
is
h
St
a
n
d
ar
d
s
-
S
t
a
n
d
a
r
d
s:
b
e
n
c
h
m
ar
k
s
fo
r
p
er
fo
r
m
a
n
c
e
c
o
m
p
ar
is
o
n.
-
Q
u
al
iti
e
s
of
g
o
o
d
st
a
n
d
ar
d
s:
-
S
p
e
ci
fi
c
a
n
d
q
u
a
nt
it
at
iv
e
-
Fl
e
xi
bl
e
-
C
h
al
le
n
gi
n
g
P
u
r
p
o
s
e
s
o
f
s
t
a
n
d
a
r
d
s:
-
Cl
ar
if
y
e
x
p
e
ct
at
io
n
s
-
D
et
e
ct
jo
b
di
ffi
c
ul
ti
e
s
-
R
e
d
u
c
e
g
o
al
in
c
o
n
gr
u
e
n
c
e
T
y
p
e
s
o
f
s
t
a
n
d
a
r
d
s:
-
P
e
rf
o
r
m
a
n
c
e
s
t
a
n
d
a
r
d
s:
q
u
al
it
y,
q
u
a
nt
it
y,
c
o
st
,
ti
m
e
-
C
o
r
ol
la
r
y
s
t
a
n
d
a
r
d
s:
s
u
p
p
or
t
p
er
fo
r
m
a
n
c
e
(r
e
s
o
ur
c
e
s,
p
er
s
o
n
n
el
)
-
S
t
a
n
d
a
r
d
s
o
f
c
o
n
d
u
c
t:
m
or
al
a
n
d
et
hi
c
al
b
e
h
a
vi
or
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3.
M
e
a
s
ur
e
A
ct
u
al
P
er
fo
r
m
a
n
c
e
-
D
e
ci
d
e
h
o
w
a
n
d
h
o
w
o
ft
e
n
to
m
e
a
s
ur
e
p
er
fo
r
m
a
n
c
e.
#
#
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4.
C
o
m
p
ar
e
P
er
fo
r
m
a
n
c
e
w
it
h
St
a
n
d
ar
d
s
-
Id
e
nt
if
y
d
e
vi
at
io
n
s:
-
P
o
si
ti
v
e
d
e
vi
at
io
n
(a
b
o
v
e
st
a
n
d
ar
d)
-
Z
er
o
d
e
vi
at
io
n
(
m
e
et
s
st
a
n
d
ar
d)
-
N
e
g
at
iv
e
d
e
vi
at
io
n
(b
el
o
w
st
a
n
d
ar
d)
-
A
p
pl
y
m
a
n
a
g
e
m
e
n
t
b
y
e
x
c
e
p
ti
o
n:
fo
c
u
s
o
n
si
g
ni
fi
c
a
nt
d
e
vi
at
io
n
s.
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5.
T
a
k
e
C
or
re
ct
iv
e
A
ct
io
n
-
N
ot
n
e
e
d
e
d
if
p
er
fo
r
m
a
n
c
e
m
e
et
s/
e
x
c
e
e
d
s
st
a
n
d
ar
d
s
(b
ut
re
c
o
g
ni
z
e
s
u
c
c
e
ss
).
-
If
st
a
n
d
ar
d
s
ar
e
n
ot
m
et
:-
R
e
vi
e
w
st
a
n
d
ar
d
s
-
C
or
re
ct
p
er
fo
r
m
a
n
c
e
pr
o
bl
e
m
s
-
A
v
oi
d:
-
A
ct
in
g
w
h
e
n
u
n
n
e
c
e
ss
ar
y
-
F
ai
li
n
g
to
a
ct
w
h
e
n
n
e
e
d
e
d

7.4 Types of Controlling (Based on Timing)

1. Preventive (Input) Control
 Takes place before operations begin.
 Focus: prevent problems in advance.
 Examples: employee selection, training, entrance exams, raw material
inspection.
2. Concurrent Control
 Occurs during the transformation process.
 Detects deviations in real time.
 Allows immediate correction.
 Examples: on-the-job training, supervision, quizzes, mid-term exams.
3. Feedback (Output) Control
 Takes place after activity is completed.
 Focuses on final results.
 Used for future planning and rewards.
 Examples: performance appraisal, financial statements, final exams.
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7.
4.
1
C
y
b
er
n
et
ic
v
s
N
o
n-
C
y
b
er
n
et
ic
C
o
nt
ro
ls
-
C
y
b
e
r
n
e
ti
c
c
o
n
tr
ol
:
a
ut
o
m
at
ic
,
s
el
f-
re
g
ul
at
in
g
s
y
st
e
m
(e
.g
.,
th
er
m
o
st
at
,
c
o
m
p
ut
er
iz
e
d
in
v
e
nt
or
y)
.-
N
o
n
-
c
y
b
e
r
n
e
ti
c
c
o
n
tr
ol
:
d
e
p
e
n
d
s
o
n
h
u
m
a
n
ju
d
g
m
e
nt
a
n
d
di
s
cr
et
io
n.
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7.
5
C
h
ar
a
ct
er
is
ti
c
s
of
a
n
E
ff
e
ct
iv
e
C
o
nt
ro
l
S
y
st
e
m
-
F
ut
ur
e-
or
ie
nt
e
d
-
M
ul
ti
di
m
e
n
si
o
n
al
-
E
c
o
n
o
m
ic
al
ly
re
al
is
ti
c
(c
o
st
-
e
ff
e
ct
iv
e)
-
A
c
c
ur
at
e
-
A
c
c
e
pt
a
bl
e
to
e
m
pl
o
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s
-
Ti
m
el
y
-
R
el
ia
bl
e
a
n
d
v
al
id
-
M
o
ni
to
r-
a
bl
e
-
O
rg
a
ni
z
at
io
n
al
ly
re
al
is
ti
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-
Fl
e
xi
bl
e
-
F
o
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d
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cr
iti
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al
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ro
l
p
oi
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s
-
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a
s
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to
u
n
d
er
st
a
n
d
-
E
m
p
h
a
si
s
o
n
e
x
c
e
pt
io
n

7.5.1 Over-Control vs Under-Control

 Over-control: too much restriction; reduces autonomy and
performance.
 Under-control: too much freedom; loss of organizational direction.
Managerial challenge: find the right balance of control to ensure goal
achievement without demotivating employees.

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K
e
y
E
x
a
m
Ti
p
s
-
Cl
e
ar
ly
d
e
fi
n
e
te
r
m
s
(c
o
nt
ro
lli
n
g,
st
a
n
d
ar
d
s,
d
e
vi
at
io
n)
.-
M
e
m
or
iz
e
th
e
5
s
t
e
p
s
of
th
e
c
o
nt
ro
lli
n
g
pr
o
c
e
ss
.-
Di
st
in
g
ui
s
h
cl
e
ar
ly
b
et
w
e
e
n
p
r
e
v
e
n
ti
v
e
,
c
o
n
c
u
rr
e
n
t,
a
n
d
f
e
e
d
b
a
c
k
c
o
n
tr
ol
s.
-
U
s
e
s
h
or
t
e
x
a
m
pl
e
s
w
h
er
e
re
q
ui
re
d.
-
E
m
p
h
a
si
z
e
m
a
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n
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b
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c
e
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d
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ff
e
c
ti
v
e
c
o
n
tr
ol
c
h
a
r
a
c
t
e
ri
s
ti
c
s.

Chapter 7 Summary Diagram (Controlling Function)

┌─────────────────────┐
│ PLANNING │
│ (Goals & Standards) │
└─────────┬───────────┘
│
▼
┌───────────────────────────┐
│ CONTROLLING FUNCTION │
└───────────────────────────┘
│
┌─────────────────┼─────────────────┐
▼ ▼ ▼
┌──────────────┐ ┌────────────────┐ ┌──────────────────┐
│ Importance │ │ Control Process│ │ Types of Control │
│ │ │ (5 Steps) │ │ (By Time) │
└──────┬───────┘ └───────┬────────┘ └────────┬─────────┘
│ │ │
▼ ▼ ▼
┌──────────────┐ 1. Determine areas 1. Preventive
│ Adapt to │ 2. Set standards 2. Concurrent
│ change │ 3. Measure performance3. Feedback
├──────────────┤ 4. Compare results
│ Limit errors │ 5. Correct action
├──────────────┤
│ Prevent │
│ failure │
└──────────────┘
│
▼
┌───────────────────────────┐
│ Comparison Result │
 │ • Positive deviation │
│ • Zero deviation │
│ • Negative deviation │
└─────────┬─────────────────┘
│
▼
┌───────────────────────────┐
│ Management by Exception │
│ (Focus on major deviations)│
└───────────────────────────┘
│
▼
┌────────────────────────────────────┐
│ Effective Control System │
│ • Accurate • Timely • Flexible │
│ • Cost-effective • Acceptable │
│ • Focus on critical points │
└────────────────────────────────────┘
│
▼
┌────────────────────────────────────┐
│ Control Balance │
│ Over-control ⇄ Under-control │
└────────────────────────────────────┘

Exam Tip: You can redraw this as a flowchart starting from Planning →
Controlling Process → Types → Corrective Action → Effective Control.