C HAPTER 5:
CONTROLLING
L EARNING
OBJECTIVES
Understand the concept of controlling
1.
Define control
2.
Importance of control
3.
Relationship between control and planning
4.
Control process
5.
Principles of effective control
6.
Types of control
7.
Techniques in control
D EFINITION

Process to ensure that actual activities are
conducted according to the planned activities
(Stoner, Freeman and Gilbert, 1995).

A process to ensure activities are implemented
as planned and activities that are considered to
be incorrect are corrected (Robin and Coutler,
1996).
D EFINITION

A systematic effort in determining a set of
performance standard based on the objectives of
planning the formation of a feedback system,
and the comparison between the actual
performance and the set standards (Mockler).
W HY C ONTROL ?

Internal and external changes in an organization

Organization’s size and decentralization

Mistakes

Allocation of power and responsibility
A SPECTS

OF
C ONTROL
Output control/performance control
- to control the actual performance or result,
productivity

Behavior control
- to control undesired behaviors
C ONTROL
VS . PLANNING

Planning preceed controlling and controlling succeeds
planning.

Planning and controlling are inseperable functions of
management.

Activities are put on rails by planning and they are
kept at right place through controlling.
C ONTROL
VS . PLANNING

The process of planning and controlling works on
Systems Approach which is as follows :
Planning → Results → Corrective Action

Planning and controlling are integral parts of an
organization as both are important for smooth
running of an enterprise.

Planning and controlling reinforce each other. Each
drives the other function of management
C ONTROL
Set the
standards
Measure the
actual
performance
PROCESS
Compare
actual
performance
with the
standards
Take
corrective
action
E FFECTIVE C ONTROL
P RINCIPLES
Principles to effective control process

Flexibility

Accuracy of information

Timeliness

Focus on important factors

Acceptance by employees
C HARACTERISTICS OF
E FFECTIVE C ONTROL
Accuracy of information
Comprehensive objectives
Timelines
Easy to operate
Economical
Flexible
Acceptance by employees
T YPES
OF CONTROL
Feed
forward
control
Concurrent
control
Filtering or
YES/NO
control
Feedback
control
F EEDFORWARD C ONTROL

Performed before an activity starts

The objective is to avoid mistakes before any
activity is implemented
CO NCURRENT C ONTROL

Also known as steering control

Performed during the implementation of an
activity

It can avoid mistakes that occur during a process

Can reduce cost (prevent corrective action)
F EEDBACK C ONTROL

Is conducted after an activity is completed

The objective is to measure the results of an
action

Can identify weaknesses in plans / standards

Also use to rewards employees
F ILTERING C ONTROL

Filtering is normally involves a filtering process,
where certain procedure must be approved
before an operation is continued
C ONTROL
TECHNIQUES
Financial Control
- Financial statement (Break-even analysis,
Balance sheet, Cash Flow)
- Audit
- Budget
 Traditional Non-Financial Control
- Statistical Data
- Special Reports and Analysis
- Internal Operation Audit
- Self-evaluation

C ONTROL

TECHNIQUES
Modern Non-Financial Control
- Gantt Chart
- Milestones Budget
- Program Evaluation
- PERT / CPM Analysis