Supervisory Management

Week 9: Lecture 2 - Controlling

Control: outcomes

• The purpose of control• How control processes work• Various types of control• Characteristics of an effective control system

The purpose of control

• Provides feedback

The purpose of control

• Helps adapt to change

The purpose of control

• Helps reduce errors

The purpose of control

• Helps cope with increasing complexity & size

The purpose of control

• Helps minimise costs

The control process

1 setting

standards

2measuring

performance

3evaluating deviations

4correcting

1. Setting standards

1 setting

standards

2measuring

performance

3evaluating deviations

4correcting

Control = revised planning

Standards should be:• relevant• realistic• attainable• worthwhile

1. Setting standards

relevant realistic attainable worthwhile

standard

tolerance

2. Measuring performance

1 setting

standards

2measuring

performance

3evaluating deviations

4correcting

Control should be• quantifiable

Reports to be• reliable

2. Measuring performance

quantifiable reliable

3. Evaluating deviations

1 setting

standards

2measuring

performance

3evaluating deviations

4correcting

Large deviations should be investigated.

3. Evaluate deviations

quantifiable reliable

standard

tolerance

Large deviation

4. Correcting

1 setting

standards

2measuring

performance

3evaluating deviations

4correcting

Correcting can include:• improving performance• revising strategies• lowering standards to be more realistic

4. Correcting

standard

tolerance

4. Correcting

standard

tolerance

4. Correcting

standard

tolerance

4. Correcting

standard

tolerance

4. Correcting

standard

tolerance

Types of control

• Physical resources• Financial resources• Information resources• Human resources

Physical resources

• Capital & assets and raw materials

inventory Stock-taking

Financial resources

Organisation

1. income 2. assets3. expenses

BUDGET

Information resources

Human resources

Characteristics of effective control

• Integration• Flexibility • Accuracy• Timeliness• Simplicity

Summary: what is control?

• Control is a continuous process• Control is a management process• Control is embedded in each level of organizational

hierarchy• Control is forward looking• Control is closely linked with planning• Control is a tool for achieving organizational activities• Control is an end process• Control compares planned performance with actual

performance

True or False?

a. Control helps cope with changesb. Control systems increase costs in an

organisationc. Controls helps cope with increasing size and

complexityd. Control limits errors