2Learning ObjectivesDescribe the nature and importance of the managerial controlling function.Identify three types of control mechanisms based on time.Explain the essential characteristics of effective controls.Describe the essential steps in the control process.
3Learning ObjectivesDiscuss the supervisor’s role in controlling through budgets.Discuss the supervisor’s role in maintaining cost consciousness and in responding to higher-level managers’ orders to reduce costs.Identify additional control areas and explain how the controlling function is closely related to the other managerial functions.
4ControllingEnsuring that actual performance is in line with intended performance and taking corrective action, if necessary.Controls ensure that results match plans.
5ControllingWhen performance and standards deviate from the plan, the supervisor must carry out the controlling function by taking corrective action, which may involve establishing new plans and different standards.
6Employee ResponsesWhen controls are well designed and properly implemented, they can positively influence employee motivation and behaviour.
7The Time Factor Feedforward controls—anticipatory Concurrent controls—in-processFeedback controls—after-the-process
8Types of ControlsFeedforward control — anticipatory action taken to ensure that problems do not occurConcurrent control — corrective action taken during the production or delivery process to ensure that standards are being metFeedback control — action taken after the activity, product, or service has been completed
9Closeness of Supervision Supervisors must know how closely to monitor employees’ work based on the employees’ExperienceInitiativeDependabilityResourcefulness
10Effective Controls Understandable Timely Suitable and economical IndicationalFlexible
12Do’s and Don’ts for Controlling Be clear about objectives and assignments.Get agreement on standards and measures.Solicit ideas for improvement.Do not micromanage.Take corrective action.Demonstrate consistently the importance of budgets, standards, and controls.Convey that you will not accept any unsatisfactory performance.
13StandardsTangible standards—standards for performance results that are identifiable and measurableIntangible standards—standards for performance results that are difficult to measure and often relate to human characteristics
14Motion and Time Studies Motion study—analysis of work activities to determine how to make a job easier and quicker to doTime study—technique for analyzing jobs to determine time standards for performing each job
15Employee Participation Workers are more apt to accept standards as reasonable and fair when they help formulate those standards.
16Strategic Control Points Performance criteria chosen for assessment because they are key indicators of overall performance
17Strategic Control Standards Number of voluntary resignations and requests for transferLevels of absenteeism and tardinessAccident frequency and severity ratesNumber and types of employee grievancesNumber and types of customer complaintsAmount of scrap and rejects
18Checking Performance Against Standards Personal observationOral and written reportsException principle - concept that supervisors should concentrate their investigations on activities that deviate substantially from the standard
19Checking Performance Against Standards Spot checksSampling TechniquesSampling - the technique of evaluating some numbers from a large group to determine whether the group meets acceptable quality standards
20Taking Corrective Action Before taking corrective action, analyze the situation to determine the causes of the deviation.Only after identifying specific causes can the supervisor decide which remedial actions will obtain better results.
21Budgetary ControlBudget—financial plan that projects expected revenues and expenditures during a set periodBudgetary control—the use of budgets to control operations so that they comply with organizational standards for making budgets
22Budget MakingIncremental budgeting—technique for projecting revenues and expenses based on historyZero-base budgeting—process of assessing, on a benefit-and-cost basis, all activities to justify their existence
23Sharing Budgetary Responsibility Employees must understand financial data and have a basis for comparing their firms’ financial information with that of previous years and competitors.Involve employees in setting objectives and cutting costs.
24Specialized Controls Inventory control Quality control Production control
25Controlling and the Other Managerial Functions The better the supervisor plans, organizes, staffs, and leads, the better will be his or her ability to control activities and employees.