•Definition
•Characteristics of Control
•Areas or Scope of Control
•Process of Control
•Types of Control
•Control – Techniques
•Functional or departmental level
of function
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Definition
• It is a process through which managers assure that
actual activities confirm to planned activities.
• Control is the process to find out whether actions are
being taken as planned and taking corrective actions
to make them confirm to plans and then taking
necessary steps to prevent the variations in future.
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Characteristics of
Control
Managerial function
Forward looking
Continuous activity
Control is related to planning
Essence of Control is Action
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Areas or Scope of Control
The Main areas of Control are:
Control over the policies of the concern.
Control over organization.
Control over the personnel employed in an
organization
Control over capital available to the concern
Control over Capital Expenditure
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Cont…
Control over Production
Control over wages and salaries paid to
the employees
Control over the cost of production
Control over the public relations
Control over research and development
Control over tools and equipments
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Process of Control
1. Key areas to be monitored
2. Establishing Standards
3. Measuring Performance
4. Compare performance with
Standards
5. Take no action if
performance is in line with
the standards
6. If performance is not as per
standards, necessary
corrective action should be
taken.
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Step1: Key areas to be monitored:
1. Key areas to be monitored is the macro-
environment of the company
2. Missions and Objectives.
3. Industry Environment.
4. internal Operations.
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Step2: Establishing
Standards:
• The standards may include:
•
– Quality of products/ Service.
– Quality of management.
– Innovativeness\Creativity.
– Long-term investment value.
– Market place performance.
– Soundness of human resources management.
– Volume of sales and/or market share.
– Financial soundness in terms of ROI.
– Use of company assets and so on and so forth.
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Step3: Measuring
Performance:
Performance may be measured through
quantitative or qualitative terms. Reports
and statements help to measure the actual
performance through quantitative terms
and managerial observations help to
measure performance through qualitative
terms. Production, Sales, Profitability, Staff
cost etc can be measured through
qualitative terms.
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Step4: Compare
performance with
Standards
Some of the standards include:
• Profitability standards.
• Market position standards.
• Productivity standards
• Product leadership standards.
• Human resources standards.
• Employee attitude standards.
• Social responsibility standards
• Standards reflecting balance between short
range and long range goals.
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Step 5: Take no action if performance is in line
with the standards
Step 6: If performance is not as per standards,
necessary corrective action should be taken.
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Types of Control:
Feed forward control
(McDonald)
Concurrent Control
(Computer)
Feedback Control
(Sales, Financial)
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Input Processes Output
Concurrent Feedback
Feedforward Control control
control Corrects Corrects
Anticipates Problems as Problems after
Problems they happen they occur
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Feed forward control
It prevents anticipated problems since it
takes place before the actual activity.
The key to feed forward controls is
taking managerial action before a
problem occurs.
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Concurrent Control
• Concurrent control, as its name implies, takes
place while an activity is in progress. When
control occurs while the work is being
performed, management can correct
problems before they come too costly.
• The best-known form of concurrent control is
direct supervision. When managers use
management by walking around, which is a
term describing when a manager is out in the
work area interacting directly with employees,
they are using concurrent control.
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Feedback Control: The most popular
type of control relies on feedback. In
feedback control, the control takes place
after the activity is done.
It has two advantages
1. Variance between standard and actual
performance.
2. Can enhance employee motivation.
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Control – Techniques:
Traditional Control Technique Modern Control Technique
Budgeting and Budgetary Control Return On Investment (ROI)
Cost Control Program Evaluation and Review
Technique (PERT)
Production Planning and control Management Information System (MIS)
Inventory Control Management Audit
Break Even Analysis
Profit and Loss Control
Statistical Data Analysis
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FUNCTIONAL OR
DEPARTMENTAL LEVEL OF
FUNCTION
Marketing Function
Finished Customer
Advertise Sell
Product
Operations Department:
Manufactu
Raw ring Marketing
Output
Material Process Dept.
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Human Resource management:
Finished Customer
Advertise Sell
Product
Finance Function:
Accounting Assessing
Barrowings or the Rewarding
or Investing Budgeting Outcome stakeholders
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