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Summary Varsity College BCOM Year 1 Business Management 1A LU 10
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BMNG – Business LU 10LU 10 – Controlling the management
process
10.1 Introduction
Controlling is the last step in the management process, it forms the basis for the new
cycle of management activities bc it gives feedback about and influences the first step in
the management process.
An effective manager = someone who follows up on planned activities
Control process = process of establishing and implementing mechanisms to ensure that
the objectives of the org are achieved.
All managers should be involved in the process of control.
Until actual performance is compared with the standard required, management will not
know whether the activities have been executed according to plan and will be unable to
id weaknesses in the plans.
Controlling means narrowing the gap between what was planned and the actual
achievement of management and ensuring that all activities are carried out as they
should be.
Successful management is dependent on sound planning and effective control.
10.2 Purpose of control
Control process is necessary for the following reasons:
- Without control, planning is pointless
- Control helps companies adapt to environmental change.
- Control helps to limit the accumulation of error.
o An effective control system should detect errors before the accumulate
and become critical
- Control helps companies cope with increasing org size and complexity
o Need an effective system of control to find weak spots in the org
- Control helps to minimise costs and increase output
10.3 Control Process
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Control = process by which management ensures that
the org’s goals are accomplished or that actual
performance compares favourably with predetermined
standards.
Process contains 4 steps:
1
, BMNG – Business LU 10
Step One: Establish Standards
Control beings at the planning stage – there is a close relationship between planning and
control.
Control system should be a mirror image of planning as the plans indicate the foals and
setting of standards or norms necessary for control.
Performance or control standard = planned target against which the actual performance
will be compared.
- To make the control process possible, the performance standard has to be
relevant, realistic, attainable and measurable.
Step Two: Measuring Actual Performance
Collection of info and reporting on actual performance are continuous activities.
It is important for the activities to be quantifiable and reliable before any valid
comparisons can be made.
Important considerations in the measurement and reposting of activities:
- Which info should be fed back
- How much info should be fed back
- Who should info be fed back to
Bigger business = info about activities has to be transmitted to higher levels, the
question of control becomes more important. Principle of control by exception is applied
Principle of control by exception = only important or exceptional disparities between real
and planned achievement are reported to top management. Less important deviations
are dealt with by employees.
Lapse of time between performance and measurement must be kept to a min so that
deviations may be spotted as early as possible.
Step Three: Evaluation Deviations
Determination of the performance gap between the performance standard and actual
performance.
It is important to know why a standard has only been matched and not exceeded, or
even why performance has been much better than the standard.
Nature and scope of the deviations responsible for the so-called performance gap may
have various causes.
3 things that happen in this step:
1. Must make sure disparities are genuine. It must be determined if the actual
performance and performance standard have been set and measured objectively.
2
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