The Importance of Control Unit 4: Planning and Controlling

The Purpose of Control Controlling is the process of measuring performance and taking the necessary action to make sure standards and objectives are met

The Purpose of Control How does controlling fit in with the other three management functions? Planning involves setting the direction and deciding how you will get there Organizing is bringing people and material resources together in working combinations Leading means inspiring people to best utilize these resources Controlling is checking to see if the plan is being followed by measuring actual results and taking corrective action when necessary

Steps in the Control Process Step 1: Set performance objectives and standards Establish objectives and standards as part of the planning process Describe standards as the conditions that must exist before the performance can be rated satisfactory Establish objectives that are broader in scope and go beyond day-to-day standards Step 2: Measure actual performance Measurement must be accurate enough to catch differences between the planned and actual performance

Steps in the Control Process Step 3: Compare actual performance against established standards Decide how much variance from the standard is acceptable. Determine if action is needed Step 4: Take corrective actions as necessary When standards are not met, it is important to find out why When standards are met and exceeded, this is a good time to offer employees positive reinforcement

Types of Control Systems Control can focus on events before, during, or after a process The corresponding types of managerial controls are called: Feedforward Concurrent Feedback

Types of Control Systems: Fastforward Control Feedforward Controls - focus on the control of inputs, i.e., human, material, and financial resources that flow into the organization, to ensure that they meet the necessary standards These controls are sometimes called preliminary controls or preventive controls since their focus is preventing problems before they occur They allow a manager to take action before getting too far away from the plan One common example of a Feedforward Control is the careful hiring and training of new employees

Types of Control Systems: Concurrent Control Concurrent Controls - monitor employees’ work to ensure consistency with performance standards, rules, and regulations These controls take place while an activity is in progress and are designed to ensure that employee work produces the expected results It often involves checkpoints at which decisions are made about whether to continue progress, take corrective action, or stop work altogether The focus is to solve problems while they are occurring Direct supervision of employee work is the most common Concurrent Control

Types of Control Systems: Feedback Control Feedback Controls - involve reviewing information to determine whether performance meets established standards They are sometimes called Output Controls because they focus on the outputs of the organization after processing or production is complete They may be used when Feedforward and Concurrent Controls are not feasible or too costly

Advantages of Feedback Control Feedback has two advantages over Feedforward and Concurrent Controls Feedback provides managers with meaningful information on the effectiveness of the planning effort If Feedback indicates little variance between standard and actual performance, this is evidence that planning is generally on target. If there is a large variance, a manager can use this information when formulating new plans to make them more effective Second, Feedback Control can be used to enhance employees’ motivation

Drawbacks of Feedback Control The major drawback of this type of control is that problems can be addressed only after they occur By the time the manager has the information, the damage is already done Feedback Control is considered the least optimal control method, since the undesirable events already occurred well before the control function is initiated Asking restaurant customers “How did you like your meal?” after they finished eating is an example of a Feedback Control