1. Chapter 6 CONTROLLING By :Nasser A. Kadasah

2. Chapter 6 will cover: 6.1 Controlling and Planning 6.2 Control Process 6.3 Types of Control

3. Controlling  Definition: Determining what is being accomplished through evaluating performance.  And applying corrective measures if necessary  So that performance takes place according to plans.

4. 6.1 Controlling & Planning  Both bear close relationship  How: Planning identifies commitment to action for future. Controlling to ensure that the commitment are carried out. When controlling clearly demonstrates that planning cannot be implemented. THEN: Modified or new plan must be developed.

5. 6.2 Control Process 6.2.1 Measuring Performance 6.2.2 Comparing Performance with Standards 6.2.3 Correcting Deviations 6.2.1 Measuring Performance 6.2.2 Comparing Performance with Standards 6.2.3 Correcting Deviations

6. 6.2 Control Process  Measuring performance.  Comparing performance with the standard, and ascertaining the difference, if any.  Correcting unfavorable deviation by means of remedial action.

7. Control Process Desired Performance Actual Performance Measurement of Actual Performance Comparison of Actual Performance against Standards Identification of Deviations Analysis of Causes of Deviations Program of Corrective Action Implementation of Corrective Action

8. 6.2.1 Measuring Performance  Determination of the quantity or capacity of a well-defined entity.  Without measurement:  A manager has to guess or use a rule-of- thumb method.  Measurement requires a measuring unit & account of how many times the entity is under consideration.

9. 6.2.2 Comparing Performance with Standards  When there is difference between the performance & the standard, judgment frequently required to assess its significance.  To establish a rigid absolute variation is inadequate.  Relatively small deviation may be approved. While, in other cases just a slight deviation may be serious.

10. 6.2.3 Correcting Deviations…(1)  Ensures that operations are adjusted.  Wherever significant variation are uncovered, vigorous and immediate action is imperative.  Effective control cannot tolerate needless delays, excuses or excessive exceptions.

11. Correcting Deviations…(2)  For maximum effectiveness, correcting the deviation should be accompanied by fixed & individual responsibility.  Fixed individuals responsibility tends to personalized the work.

12. 6.3 Types of Control 6.3.1 Preliminary Control 6.3.2 Concurrent Control 6.3.3 Feedback Control 6.3.1 Preliminary Control 6.3.2 Concurrent Control 6.3.3 Feedback Control

13. 6.3 Types of Control  Controls have been designated as:  Preliminary control  Before operation begins.  Concurrent control  During the action of carrying out the plans.  Feedback control  Focuses on the use of information about previous result to correct deviation from the acceptable standard.

14. 6.3.1 Preliminary Control  Includes the development of policies, procedures and rules that are designed to ensure that planned activities will be carried out properly.  Helps in unifying the understanding of policies & procedures.  Consistency in the use of policies, procedures is aided by the controlling efforts.  Example: A sale manager may have a policy that the manager must authorize any change in price from the published price in writing ; no salesperson is permitted to change any price. In effect, this clarifies the existent policy and provides control to the sale manager.

15. 6.3.2 Concurrent Control  The heart of any operating control system which includes directing, monitoring and fine- tunings of activities as they occur.  Concurrent Control can assist in guaranteeing that the plan will be carried out at the specific time and under required conditions.  Example: On production floor, all efforts directed towards getting out the right quantity of the right product at the right time.

16. 6.3.3 Feedback Control  Implies that some data have been gathered & analyzed and the results returned to someone or something in the process being controlled so that corrections may be made.  Timing is critical, if feedback control is to have any benefits.  Example: Banks which are trying to move towards real time transactions with the electronics fund transfer systems must cope with slow manual systems that takes day to clear a cheque.