18 November 2024
Controlling: Mastering
Management Skills
Group - 5
Introduction
18 November 2024
• Understand the concept of controlling in management.
Controlling makes sure that organizational goals are met by monitoring performance and making
adjustments.
Controlling is one of the important management functions that makes sure the goals are achieved
effectively. It involves monitoring performance, comparing actual results with the planned objectives,
and taking corrective action if necessary. By asking critical questions like "Are we meeting our goals?" or
"How can we improve?" controlling becomes a powerful tool to maintain alignment with organizational
priorities. It provides a framework for continuous improvement and keeps teams focused on achieving
their targets.
Example
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Example: A manager in a restaurant notices a delay in food preparation. By
implementing a system to monitor kitchen performance and providing real-
time feedback, they reduce delays and improve customer satisfaction.
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Nature of Controlling
The nature of controlling lies in its role as an
ongoing, dynamic process that prioritizes
performance and aligns it with organizational
goals. It is applied at different levels—strategic for
long-term goals and operational for day-to-day
activities. Controlling is not a one-time task but a
continuous cycle that involves monitoring,
evaluation, and feedback. This function bridges
the gap between current performance and
desired outcomes, promoting accountability and
adaptability in the face of challenges.
Example
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Example: In a manufacturing company, controlling involves tracking the
production process to ensure that all units meet quality standards. If defects
are identified, corrective actions like adjusting machinery or retraining
workers are implemented.
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Controlling is one of the essential
Nature of Controlling management functions that ensures goals
• Main Purpose: Maintain alignment between
are achieved effectively and efficiently. It
goals and actual performance. involves monitoring performance,
comparing actual results with the planned
• Ongoing Process: Continuous activity objectives, and taking corrective action if
throughout an organization's life.
• necessary. By asking critical questions like
• Levels of Application: "Are we meeting our goals?" or "How can
• Strategic: High-level goals. we improve?" controlling becomes a
• Operational: Day-to-day activities. powerful tool to maintain alignment with
• Has Feedback: For constant improvement. organizational priorities. It provides a
framework for continuous improvement
and keeps teams focused on achieving
their targets.
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Control Techniques
Feedback Feedforward Concurrent
Implement feedback Utilize feedforward Apply concurrent controls
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Types of Controls Control Systems:
•
Manual
Systems:
Checklists,
reviews.
•
Automated
Preliminary Controls Concurrent Controls Feedback Controls Systems:
(Before Work) (During Work) (After Work) Software tools
☐ Ensures resources are ☐ Tracks performance in ☐ Reviews results and
ready and standards are real-time. suggests improvements.
like inventory
set. ☐ Example: Supervising a ☐ Example: Sales analysis. trackers.
☐ Example: Budget team.
approval.
Example
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•
Preliminary Control: Ensuring staff are trained before starting a new
project.
•
Concurrent Control: Supervisors monitor employees during tasks, such as
overseeing assembly lines.
•
Feedback Control: Reviewing customer feedback to improve future product
launches.
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Control Process
Planning, implementation, monitoring, and corrective
action.
Stage 01 Stage 02 Stage 03
Planning
Monitoring Adjustments
Implementation Performance Goals
Comparisons
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Adopting an Effective Rewards
System
An effective rewards system plays a vital role in
motivating employees and aligning their efforts
with organizational goals. To achieve this, the
system must have clear criteria for rewards,
ensure fairness and transparency, and offer a mix
of monetary and non-monetary incentives. For
instance, while bonuses and raises can boost
motivation, recognition and praise often foster
long-term loyalty. A well-structured rewards
system ensures that achievements are
acknowledged, thereby driving better
performance and workplace satisfaction.
Example
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Example: A sales team receives bonuses for meeting monthly targets.
Additionally, the "Employee of the Month" recognition motivates employees
to strive for excellence and fosters a positive work culture.
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Link Between Planning
and Controlling
Planning and controlling are two interdependent
management functions that work hand in hand. Planning
sets the vision and goals, while controlling ensures that
these objectives are realized. For example, if the plan is
to increase revenue by 10%, controlling involves
monitoring sales data to track progress and identify
areas for improvement. This relationship creates a
continuous feedback loop where plans guide actions,
and controlling ensures alignment with the goals,
making adjustments as needed for success.
Example
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Example: A school plans to increase student enrollment by 10% in the next
year. Controlling involves monitoring admission numbers monthly and
adjusting marketing strategies if the target is not being met.
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Role of Budget in ☐ A budget is a financial
Planning and Control plan that sets limits on
spending and allocates
Budgets are indispensable tools in both planning
and controlling. They serve as financial blueprints
resources.
that outline expected income and expenses, ☐ Helps in planning by
ensuring resources are allocated effectively.
forecasting revenues
In planning, a budget helps set realistic financial and costs.
goals and priorities. During controlling, it
☐ Aids controlling by
monitors spending against the set budget, helping
identify overspending or areas needing identifying over-
adjustment. For instance, tracking marketing spending or under-
expenses against a budget can highlight whether
spending aligns with projected returns, ensuring
performance.
financial discipline and goal alignment.
Example
18 November 2024
Example: A company allocates ₱500,000 for marketing. Controlling ensures
the spending does not exceed this budget while achieving the desired ROI/
return on investment. If spending goes beyond ₱450,000 early, plans are
revisited to cut costs elsewhere.
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Preparing a Budget ☐ Identify Goals: What do we
want to achieve?
Plan ☐ Estimate Income: How much
Creating a budget plan involves a systematic
do we expect to earn?
process of setting financial goals, estimating ☐ List Expenses: Break down
income, and itemizing expenses. The first step is
identifying the organization's objectives, followed
costs (fixed and variable).
by forecasting revenue. Expenses are then ☐ Balance: Ensure expenses
categorized into fixed costs (e.g., rent) and don’t exceed income.
variable costs (e.g., supplies). The plan ensures
that spending stays within limits, promoting ☐ Monitor and Adjust: Regularly
savings or surplus generation. Regular monitoring review and refine the budget.
and adjustment of the budget are critical to
address unforeseen changes, making it a dynamic
tool for financial management.
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Example:
•
Income: ₱50,000
•
Fixed Costs: ₱20,000 (Rent, Utilities)
•
Variable Costs: ₱15,000 (Marketing,
Supplies)
•
Savings: ₱15,000
Example
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Another Example: A family plans a vacation with a budget of ₱50,000. They
estimate expenses for transportation, hotel, food, and activities, ensuring
they prioritize within the limit while leaving room for unexpected costs.
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Conclusion
Managing is all about keeping things on track, and controlling plays a key role in
that. It works hand-in-hand with planning to make sure goals are achieved by
constantly checking in, assessing progress, and making necessary tweaks. This
process helps organizations celebrate wins, fix any issues, and stay flexible in the
face of change, which is crucial for long-term success. When planning and
controlling are connected, it sets up a solid path for everyone to follow, making
sure all team members are aligned with common goals. Learning how to control
effectively gives future managers the skills they need to lead successfully, no
matter the situation.
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END