8. The Process of Controlling Principles of Management and Applied Economics

Control is the regulation of organisational activities in such a way as to facilitate goal attainment. (Griffin, 2012) Control - Definitions Control refers to the systematic process of regulating organisational activities to make them consistent with the expectations established in plans, targets and standards of performance. (Daft, 2012)

Importance of Control Organisational control is one of the most important functions in management and is closely related to other functions of the management process. It also facilitates the managers in ensuring that limited resources are obtained and properly utilized in the process of accomplishing organisation’s objectives.

Process of Controlling Establish Performance Criteria and Standards Measure Actual Performance Compare Actual Performance against Standards Evaluate and Take Corrective Actions Correct Deviations Change Standard Maintain Status Quo

Types of Control  Operational Control  Financial Control  Structural Control  Strategic Control

Operational Control Operational Control focuses on the process the organisation uses to transform resources into products or services.  Feed -forward Control/Preliminary Control  Concurrent Control/ Screening Control  Feed-back Control/Post-action Control

Financial Control The control of financial resources of an organisation. Types of financial controls:  Budgetary Control  Financial Statements  Ratio Analysis  Financial Audits

Structural Control  Bureaucratic Control Control through a system of rules and Standard Operating Procedures (SOPs) that shapes and regulates the behaviour of divisions, functions, and individuals.  Decentralised Control The control exerted on individuals and groups in an organisation by shared values, norms, standards of behaviour, and expectations.

Strategic Control  Strategic control is a form of control of which purpose is to ensure that the organisation effectively understands and responds to the realities of it’s environment  Effective strategic control should tell managers if their strategies are appropriate given the actual circumstances

Characteristics of an Effective Control System  Flexibility  Accuracy  Timeliness  Economic  Integration with planning  The wholehearted support of top management  Participation of all managers in the control process  A complementary relationship to manager's authority