CONTROLLING

Chapter 9/ Group 7
 WHAT IS
CONTROLLING
Controlling refers to the process of ascertaining whether
organizational objectives have been achieved; if not, why
not; and determining what activities should then be taken to
achieve objectives better in the future.

Objectives and goals that are set at the planning stage are
verified as to achievement or completion at any given point
in the organizing and implementing stages. When
expectations are not met at scheduled dates, corrective
measures are usually undertaken.
 When controlling is properly
implemented, it will help the
organization achieve its goal in
the most efficient and effective
manner possible. IMPORTANCE
Proper control measures
minimize the ill effects of such
OF
negative occurrences CONTROLLING
(Deviations, mistakes, and
shortcomings).
 STEPS IN THE
CONTROL PROCESS
Establishing
Measuring actual
performance objectives
and standards. performance.
 STEPS IN THE
CONTROL PROCESS
Comparing actual Taking necessary action
performance to objectives based on the results of the
and standards comparisons.
 STEPS IN THE
CONTROL PROCESS
 Sales targets - which are expressed in

quantity or monetary terms.

Production targets- which are expressed in

ESTABLISHING
PERFORMANCE OBJECTIVES quantity or quality.
AND STANDARDS Worker attendance- which are expressed in

terms of rate of absences

In controlling, what was to be
achieved must first be determined. Safety record- which are expressed in
Examples of such objectives and
number of accidents for given periods
standards are the following:
Supplies used- which are expressed in

quantity or monetary terms for given periods

There is a need to measure actual
performance so that when
shortcoming occurs, adjustment
could be made. The adjustments
will depend on actual findings.
The measuring tool will differ from MEASURING
organization to organization, as
each have their own unique
ACTUAL
objectives. Some firms, for PERFORMANCE
instances, will use annual growth
rate as standard basis, while other
firms will use some other tools like
the market share approach and
position in the industry.
 Once actual performance has been
determined, this will be compared with
what the organization seeks to achieve.
Actual production output, for instance,
will be compared with target output. This
may be illustrated as follows:
COMPARING
A construction firm entered into a ACTUAL
contract with the government to PERFORMANCE TO
construct a 100 kilometers road within OBJECTIVES AND
ten months. It would be, then,
STANDARDS
reasonable for management to expect
at least 10 kilometers to be constructed
every month. As such, this must be
verified every month, or possible, every
week.
 TAKING
NECESSARY
ACTION
 TAKING NECESSARY
ACTION
The purpose of comparing actual performance with the desired result is
to provide management with the opportunity to take corrective action
when necessary.

If in the illustration cited above, the management of the construction firm

found out that only 15 kilometers were finished after two months, the any
of the following action may be undertaken:

1. Hire additional personnel.

2. Use more equipment; or
3. Require overtime
TYPES OF CONTROL
Control consists of three distinct types, namely:
 One of budgeting aspect which tries to
identify and prevent the problem before it
even occurs. This method will compare the
budget result with the forecast and figure
FEEL out the solution before it too late.
FORWARD Feedforward Control Feedforward is an
CONTROL important tool in budgetary control systems.
It has been described very elaboratively in
CIMA Official Terminology (2005) as, The
Feedforward control encompasses the
forecasting of the differences between the
actual and planned outcomes.
 Concurrent control, also called steering
control because it allows people to act on a
process or activity while it is proceeding, not
after it is proceeding, nor after it is
CON- completed. Corrections and adjustments

CURRENT can be made as and when the need a rises.

CONTROL It is a procedure in DBMS which helps us for

the management of two simultaneous
processes to execute without conflicts
between each other, these conflicts occur in
multi user systems.
 When information is gathered about a
completed activity, and in order that
evaluation and steps for improvement are
derived, control us undertaken. Corrective
actions aimed at improving future activities
FEEDBACK are features of feedback control
CONTROL An example of feedback control is
supervisor who discovers that continuous
overtime work for factory workers lowers the
quality of output. The feedback information
leads to some adjustment in the overtime
schedule.
 Strategic plan

COMPONENTS OF ORGANIZATIONAL The long-range financial plan

CONTROL SYSTEMS
The operating budget

Performance appraisals
Organizational control
systems consists of the Statistical reports
following:
Policies and procedures
 Strategic planning is the art of
creating specific business
strategies, implementing them,
and evaluating the results of
executing the plan, in regard to a
company’s overall long-term goals
STRATEGIC
or desires. It is a concept that
focuses on integrating various
CONTROL
departments (such as accounting
and finance, marketing, and
SYSTEMS
human resources) within a
company to accomplish its
strategic goals.
 A long-range budget is a
financial plan that extends for
more than one year into the
future. This type of budget
typically covers a five-year THE LONG-
period and is focused on the
strategic direction of the RANGE
business. The orientation of this
budget is toward new product FINANCIAL
planning, capital investments,
acquisitions, and risk
PLAN
management.
 An operating budget
indicates the expenditures,
revenues, or profits
planned for some future
period regarding
THE
operations. The figures OPERATING
appearing in the budget
are used as standard
BUDGET
measurements of
performance.
 Performance appraisal is a
function within the performance
management system that is
carried out by human resource
managers to review an
employee’s performance within PERFORMANCE
an organization. Employees are
the key stakeholders in an
APPRAISALS
organization. The success of
their individual goals is
paramount to the development
of any business.
 STATISTICAL
REPORTS
Statistical reports pertain to those that contain data on
various developments within the firm. Among the
information which may be found in a statistical report
pertains to the following:
1. Labor efficiency rates
2. Quality control rejects
3. Accounts receivable
4. Accounts payable
5. Sales reports
6. Accident reports
7. Power consumption reports
POLICIES AND
PROCEDURES
 IT STARTS WITH THE CREATION OF WELL-THOUGHT-OUT
POLICIES AND PROCEDURES THROUGH TO IMPLEMENTATION
AND CONSISTENT REVIEW AND UPDATING. PRUDENT POLICY
AND PROCEDURE MANAGEMENT CAN HELP PROTECT AN
ORGANIZATION AGAINST LITIGATION, NON-COMPLIANCE
FINES, MISTRUST FROM STAKEHOLDERS, AND A PLUMMETING
BOTTOM-LINE. IT IS EXPECTED THAT POLICIES AND
PROCEDURES LAID DOWN BY MANAGEMENT WILL BE
FOLLOWED.
 IDENTIFYING CONTROL
PROBLEMS
- we should recognize and implement the need for
control
 3 USEFUL
APPROACHES IN
CONTROLLING
 EXECUTIVE REALITY CHECK
ACCORDING TO WIKTIONARY, THE WORD REALITY CHECK
REFERS TO “A CHECK OR REVIEW TO MAKE SURE SOMETHING IS
CONSISTENT AND REASONABLE”. THUS, THE MANAGEMENT MUST
IMPOSE CERTAIN REQUIREMENTS THAT ARE REALISTIC AND FAIR
TO THE EMPLOYEES.

CENTRAL LUZON STATE UNIVERSITY PROVIDES A GOOD

EXAMPLE IN EXERCISING THE EXECUTIVE REALITY CHECK:
EXECUTIVES HANDLE AT LEAST ONE SUBJECT LOAD EACH. WHAT
THE EXECUTIVES EXPERIENCE IN THE CLASSROOM WILL MAKE
HIM MORE RESPONSIVE IN PREPARATION OF PLANS AND
CONTROL TOOLS.

TOP MANAGERS PERIODICALLY WORK AT A LOWER-LEVEL JOB

TO BEOME MORE AWARE OF OPERATIONS. IN THE FIELD OF
ENGINEERING, A GOOD EXAMPLE IS THE ENGINEER MANAGER OF
A CONSTRUCTION FIRM PERFORMING A LABORER’S WORK
OCCASIONALLY.
COMPREHENSIVE INTERNAL AUDIT
AIMS TO DETECT DYSFUNCTIONS IN THE ORGANIZATION BEFORE
THEY BRING BIGGER TROUBLES TO MANAGEMENT.

INDEPENDENT APPRAISALS OF ORGANIZATIONAL OPERATIONS

AND SYSTEMS ARE CONDUCTED TO ASSESS EFFECTIVENESS AND
EFFICIENCY.

EXAMPLE: WEEKLY RESIGNATION OF EMPLOYEES IN A

DEPARTMENT.

EVEN IF THE SOURCE OF THE PROBLEM IS IDENTIFIED, IT MAY

ALREADY HAVE CAUSED CONSIDERABLE LOSSES TO THE
ORGANIZATION.
SYMPTOMS OF INADEQUATE CONTROL
BEHIND EVERY SYMPTOM IS A PROBLEM TO BE SOLVED. NO
EFFECTIVE SOLUTION MAY BE DERIVED UNLESS THE PROBLEM IS
CLEARLY IDENTIFIED.

A CHECKLIST FOR SYMPTOMS OF INADEQUATE CONTROL CAN

BE AN ALTERNATIVE IN CASE A COMPREHENSIVE INTERNAL AUDIT
CANNOT BE AVAILED.
SYMPTOMS OF INADEQUATE CONTROL
ACCORDING TO ROBER KREITNER, SOME COMMON SYMPTOMS
ARE AS FOLLOWS:

AN UNEXPLAINED DECLINE IN REVENUES OR PROFITS

A DEGRADATION OF SERVICE (CUSTOMER COMPLAINTS)
EMPLOYEE DISSATISFACTION
CASH SHORTAGES CAUSED BY BLOATED INVENTORIES OR
DELINQUENT ACCOUNTS RECEIVABLE
IDLE FACILITIES OR PERSONNEL
DISORGANIZED OPERATIONS
EXCESS COSTS
EVIDENCE OF WASTE AND INEFFICIENCY (SCRAP, REWORK)
GWEN MAGALLANES PRINCESS DONES DIEGO ABAPO

NIELSEN SANGALANG GERLARD DE GUZMAN

THANK YOU
I hope you can get helpful
knowledge from this presentation.
Good luck!