CAPITOL UNIVERSITY
Cagayan de Oro City
SENIOR HIGH SCHOOL
LESSON PACKET
SUBJECT: Organization and Management MODULE 12
Essential Topics: Learning Objectives:
Controlling the Organization Discuss the nature of organizations and the organizing process;
Identify the types of organizational design
Distinguish the various types of organization structures
The Nature of Controlling
Controlling is an ongoing process that involves members at all levels of the organization. The control function is the responsibility of everyone,
thus employees are expected to address problems even if these are not within his or her area of responsibility. The controlling function is both
anticipatory and retrospective. It anticipates problems so that immediate corrective actions can be employed. It is also retrospective because it looks back
and reviews previous actions and operations in order to determine which aspects conform to standards and which need improvement. In implementing
controls, managers assume that there is room for adjustments and further improvements.
Controlling is also considered an end function because this is performed after all other functions are done. It is also a dynamic process because
any deviations from standards should be immediately corrected. Constant monitoring is a vital component of the control process.
The control process involves four main steps. These are as follows:
1. Establishment of Standards
The first step is to develop criteria by which performance will be measured. Standards are, by definition, simply the criteria of performance.
They are the selected points in an entire planning program at which performance is measured so that managers can receive signals about how things are
going and thus do not have to watch every step in the execution of plans. Standard elements form precisely worded, measurable objectives and are
especially important for control.
2. Measure of performance
Performance is measured by identifying strategic control points. These include indicators such as income, expenses, inventory, product quality,
and the number of work hours put in by employees. Employee performance can be measured through actual observation. It can also be measured by using
devices that analyze machine operations and production processes. Financial ratios can also be employed as a measure of performance, where analysts
take information from a company’s financial statement and compare it with its main competitors. Financial ratios can also compare the performance of
the company with the industry average.
3. Comparison with the actual performance with the standards
Management can gather data from performance measurement and compare it with the established standards. The company can also conduct
benchmarking by comparing their performance with exemplary practices from other companies in the industry. Management can also determine the
degree of variation between the standard and the actual performance and check whether the variation falls within acceptable limits.
4. Taking corrective actions and realigning processes when necessary
When the company has determined that its performance has deviated from the standard, corrective actions should be taken and applied.
Deviations from the standards may be a result of incorrect planning, a lack of coordination in the conduct of tasks, or the misinterpretation of instructions.
Some companies allow their employees to make necessary corrective measures to their work. Other employees get directives from management on how
to implement necessary corrections to their jobs.
The Link Between Planning and Controlling
Planning and controlling are closely related management functions. Planning identifies the goals and standards that an organization should aim
for while controlling ensures that the performance of the whole organization conforms to the outlined plans. Controlling also provides management with
vital information that can be used in the formulation of new plans for the company.
During the planning stage, the company sets its goals, develops its vision and mission statements, and identifies strategies that will be
implemented. Once the company implements its plans, the controlling function becomes the mechanism that ensures that all plans are realized. Planning
provides the baseline of the company’s future while controlling becomes the tool that ensures the company’s success.
The link between planning and controlling can be summarized by the diagram below:
Correct deviations
Monitor and and return to no.
Do the compare actual 2, OR improve
plans performance with future plans by
plans going back to no.
1
The control process enables managers to ensure synergy between the planning and controlling functions. The process ensures that the
organization is on track toward realizing its plans and enables management to intervene and address any deviation from the standard. Once problems
have been addressed, the organization may choose to make improvements on their future plans.
Organization and Management by Cynthia A. Zarate