Assignment No.

Topic:
Controlling
Course Name Course Code Submitted to
Ismat Jahan Lecturer Department of Business Administration Shaikh Burhanuddin Post Graduate College.

: Business Management : 1203

Submitted by
Group- Arok Sec-A Batch-13th Department of Business Administration

Members List
No. 1 2 3 4 5 6 Roll No. 20616 20607 20574 20592 20619 20581 Name Rakibul Hossen Robiul Hasan Salman Jahir Mahmudul Hasan Md. Asraf Uz Zaman Sohani Akther Workings

Date of Submission: 27th April, 2011

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TABLE OF CONTENTS

Titles
1. Definition of controlling 2. Process of controlling 3. Methods of controlling... 4. Importance of controlling .. 5. Areas of controlling 6. Nature of control. 7. Principals of control 8. Barriers of controls. 9. How to overcome barriers of control.. 10. Types of control.. 11. Requirement of effective control .. 12. Operation vs. financial control .. 13. Control vs. feedback .. 14. Information system & control. 15. Feedfowward control.. 16. Critical control points and standards.. 17. Reference

Page
3-4 4-5 6 6-8 9-14 14-15 16-17 17-18 18 19-20 20-22 23 24-25 25 26 27 27

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1.

Definition of controlling?

Answer:
Control is one of the managerial functions like planning, organizing, staffing and directing. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner. According to modern concepts, control is a foreseeing action whereas earlier concept of control was used only when errors were detected. Control in management means setting standards, measuring actual performance and taking corrective action. Thus, control comprises these three main activities.

Definitions:
According to Henri Fayol, Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from recurring. According to EFL Breach, Control is checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance.

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According to Harold Koontz, Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished. According to Stafford Beer, Management is the profession of control. In 1916, Henri Fayol formulated one of the first definitions of control as it pertains to management. Control consists of verifying whether everything occurs in conformity with the plan adopted, the instructions issued, and principles established. It ['s] object [is] to point out weaknesses and errors in order to rectify [them] and prevent recurrence.

2.

Process of controlling?

Answer: Control Process:

The control process involves carefully collecting information about a system, process, person, or group of people in order to make necessary decisions about each. Managers set up control systems that consist of four key steps:

Establish standards to measure performance:

Within an organization's overall strategic plan, managers define goals for organizational departments in specific, operational terms

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that include standards of performance to compare with organizational activities.

Measure actual performance:

Most organizations prepare formal reports of performance measurements that managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data.

Compare performance with the standards:

This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variancethat is, the difference between each actual amount and the associated standard.

Take corrective actions:

When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centered environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth stepcorrective action. The most effective course may be prescribed by policies or may be best left up to employees' judgment and initiative. These steps must be repeated periodically until the organizational goal is achieved.

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3. Methods of control?
Answer: Methods of control:
There are three primary methods or types of organizational control. 1. Strategic control 2. 2. Management control and 3. 3. Operational control. 1. Strategic Control the process of evaluating strategy, is practiced both after the strategy is formulated and after it is implemented. 2. Management control focuses on the accomplishment of the objectives of the various sub strategies comprising the master strategy and the accomplishment of the intermediate plans. 3. Operational control is concerned individual and group performance as compared with the individual and group role prescriptions required by organizational plans. Each of these methods of control is not a separate and distinct entity and, in fat, may be indistinguishable from others. Moreover, similar measurement techniques may be used for each type of control.

4. Importance of control?
Answer: The importance of controlling in management:

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Planning can be done, an organizational structure can be created to efficiently facilitate the achievement of goals, and employees can be motivated through effective leadership. Still, theres no assurance that activities are going as planned and that the goals managers are seeking are, in fact, being attained. The gravity of control in management may be ascertained from the following discussion:

The final link:

Control is important, therefore, because its the final link in the management functions. Its the only way managers know whether organizational goals are being met and if not, the reasons why.

Adding value:
The value of the control function lies in its relation to planning, empowering employees and protecting the workplace.

Creating better quality:

Modern Industries follow total quality management (TOM) which has led to dramatic improvements in controlling. Under it, process flaws are spotted, and the process is purged work and this also helps change their attitudes and approaches to achieving effective control.

Purpose of achieving goals:

As the old saying- goes, The best-laid plans often go awry. The effective manager needs to follow up to ensure that what others are supposed to do is, infect, being done and that their goals are, in fact, being achieved. In reality, managing is an ongoing process, and controlling activities provides the critical link back to planning.

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Employees empowerment:
Another reason controlling is important is employee empowerment. Many managers are reluctant to empower their employees because they fear employees will do something wrong for which the manager would be held responsible. Thus, many managers are tempted to do things themselves and avoid empowering. This reluctance, however, can be reduced if managers develop an effective control system that provides information and feedback on employee performance.

Security alerts:
The final reason that managers control is to protect the organization and the physical work place. Given todays environment with heightened security alerts, the possibility of terrorist attacks, and surprise financial scandals, managers must have plans in place to protect the organizations employees, data, and infrastructure.

Facilitating delegation and teamwork:

Modern participative management has changed the nature of the control process. Under the traditional system, the manager would specify both the standards for performance and the methods for achieving them. So at the end we can say, planning without controlling is useless. Undoubtedly, controlling also helps managers monitor environmental changes and the effects of these managers

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5. Areas of control?
Answer:
Controlling is the process of ensuring that actual activities conform to planned activities. Planning and controlling are closely related. In fact, controlling is more pervasive than planning. Controlling helps managers monitor the effectiveness of their planning, organizing and leading activities. Now the areas of controlling are discussing below:

Organizational Control Techniques:

Control techniques provide managers with the type and amount of information they need to measure and monitor performance. The information from various controls must be tailored to a specific management level, department, unit, or operation. To ensure complete and consistent information, organizations often use standardized documents such as financial, status, and project reports. Each area within an organization, however, uses its own specific control techniques, described in the following sections.
Financial controls:

After the organization has strategies in place to reach its goals, funds are set aside for the necessary resources and labor. As money is spent, statements are updated to reflect how much was spent, how it was spent, and what it obtained. Managers use these financial statements, such as an income statement or balance sheet, to monitor the progress of programs and plans.

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Financial statements:
Financial statements provide management with information to monitor financial resources and activities. The income statement shows the results of the organization's operations over a period of time, such as revenues, expenses, and profit or loss. The balance sheet shows what the organization is worth (assets) at a single point in time, and the extent to which those assets were financed through debt (liabilities) or owner's investment (equity).

Financial audits:
Financial audits or formal investigations, are regularly conducted to ensure that financial management practices follow generally accepted procedures, policies, laws, and ethical guidelines. Audits may be conducted internally or externally. Financial ratio analysis examines the relationship between specific figures on the financial statements and helps explain the significance of those figures:

Liquidity ratios measure an organization's ability to generate cash. Profitability ratios measure an organization's ability to generate profits. Debt ratios measure an organization's ability to pay its debts. Activity ratios measure an organization's efficiency in operations and use of assets.

In addition, financial responsibility centers require managers to account for a unit's progress toward financial goals within the scope of their influences. A manager's goals and responsibilities may focus on unit profits, costs, revenues, or investments.

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Budget controls:
A budget depicts how much an organization expects to spend (expenses) and earn (revenues) over a time period. Amounts are categorized according to the type of business activity or account, such as telephone costs or sales of catalogs. Budgets not only help managers plan their finances, but also help them keep track of their overall spending. A budget, in reality, is both a planning tool and a control mechanism. Budget development processes vary among organizations according to who does the budgeting and how the financial resources are allocated. Some budget development methods are as follows:

Top-down budgeting. Managers prepare the budget and send it to subordinates. Bottom-up budgeting. Figures come from the lower levels and are adjusted and coordinated as they move up the hierarchy. Zero-based budgeting. Managers develop each new budget by justifying the projected allocation against its contribution to departmental or organizational goals. Flexible budgeting. Any budget exercise can incorporate flexible budgets, which set meet or beat standards that can be compared to expenditures.

Marketing controls:
Marketing controls help monitor progress toward goals for customer satisfaction with products and services, prices, and delivery. The following are examples of controls used to evaluate an organization's marketing functions:

Market research gathers data to assess customer needs information critical to an organization's success. Ongoing

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market research reflects how well an organization is meeting customers' expectations and helps anticipate customer needs. It also helps identify competitors. Test marketing is small-scale product marketing to assess customer acceptance. Using surveys and focus groups, test marketing goes beyond identifying general requirements and looks at what (or who) actually influences buying decisions. Marketing statistics measure performance by compiling data and analyzing results. In most cases, competency with a computer spreadsheet program is all a manager needs. Managers look at marketing ratios, which measure profitability, activity, and market shares, as well as sales quotas, which measure progress toward sales goals and assist with inventory controls.

Unfortunately, scheduling a regular evaluation of an organization's marketing program is easier to recommend than to execute. Usually, only a crisis, such as increased competition or a sales drop, forces a company to take a closer look at its marketing program. However, more regular evaluations help minimize the number of marketing problems.

Human resource controls:

Human resource controls help managers regulate the quality of newly hired personnel, as well as monitor current employees' developments and daily performances. On a daily basis, managers can go a long way in helping to control workers' behaviors in organizations. They can help direct workers' performances toward goals by making sure those goals are clearly set and understood. Managers can also institute policies and procedures to help guide workers' actions. Finally, they can consider past experiences when developing future strategies, objectives, policies, and procedures.

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Common control types include performance appraisals, disciplinary programs, observations, and training and development assessments. Because the quality of a firm's personnel, to a large degree, determines the firm's overall effectiveness, controlling this area is very crucial.

Computers and information controls:

Almost all organizations have confidential and sensitive information that they don't want to become general knowledge. Controlling access to computer databases is the key to this area. Increasingly, computers are being used to collect and store information for control purposes. Many organizations privately monitor each employee's computer usage to measure employee performance, among other things. Some people question the appropriateness of computer monitoring. Managers must carefully weigh the benefits against the costsboth human and financial before investing in and implementing computerized control techniques. Although computers and information systems provide enormous benefits, such as improved productivity and information management, organizations should remember the following limitations of the use of information technology:

Performance limitations. Although management information systems have the potential to increase overall performance, replacing long-time organizational employees with information systems technology may result in the loss of expert knowledge that these individuals hold. Additionally, computerized information systems are expensive and difficult to develop. After the system has been purchased, coordinating itpossibly with existing equipmentmay be more difficult than expected. Consequently, a company may cut corners or install the system carelessly to the detriment of

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the system's performance and utility. And like other sophisticated electronic equipment, information systems do not work all the time, resulting in costly downtime. Behavioral limitations. Information technology allows managers to access more information than ever before. But too much information can overwhelm employees, cause stress, and even slow decision making. Thus, managing the quality and amount of information available to avoid information overload is important. Health risks. Potentially serious health-related issues associated with the use of computers and other information technology has been raised in recent years. An example is carpal tunnel syndrome, a painful disorder in the hands and wrists caused by repetitive movements (such as those made on a keyboard).

Regardless of the control processes used, an effective system determines whether employees and various parts of an organization are on target in achieving organizational objectives.

6. Nature of control?
Answer: Natures of control:
Management control is a systematic effort to set performance standards with planning objectives, to design information feedback systems, to compare actual performance with these predetermined standards, to determine whether there are any deviations and to measure their significance, and to take any action required to assure that all corporate resources are being used in the most

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effective and efficient way possible in achieving corporate objectives. Robert J. Mecklers definition of control points out the essential elements of the control process. Management control is a systematic effort to set performance standards with planning objectives, to design information feedback systems, to compare actual performance with these predetermined standards, to determine whether there are any deviations and to measure their significance, and to take any action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives. Nature of process for operating activities has four phases programming, budget preparation, execution, and evaluation.

Programming:
Programming is the process of deciding on the major programs that the organization will undertake to implement its strategies and the approximate amount of resources that will be devoted to each.

Budget Preparation:
Budget preparation is an operating budget is the organizations financial plan for a specific period, usually one year.

Execution and evaluation:

During the year manager execute the program or part of a program for which they are responsible. Reports on responsibility centers show both budget and actual information. They are used as a basis for control. The process of evaluation is a comparison of actual amounts with the amounts that should be expected of actual circumstances.

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7.

Principals of control?

Answer: Principles of control:

Control systems integrate elements whose function is to maintain a process variable at a desired value or within a desired range of values. The following process control terms: a. Control system b. Control system input c. Control system output d. Open-loop system e. Closed-loop system f. Feedback g. Controlled variable h. Manipulated variable Instrumentation provides the various indications used to operate a nuclear facility. In some cases, operators record these indications for use in day-to-day operation of the facility. The information recorded helps the operator evaluate the current condition of the system and take actions if the conditions are not as expected. Requiring the operator to take all of the required corrective actions is impractical, or sometimes impossible, especially if a large number of indications must be monitored. For this reason, most systems are controlled automatically once they are operating under normal conditions. Automatic controls greatly reduce the burden on the operator and make his or her job manageable. Process variables requiring control in a system include, but are not limited to, flow, level, temperature, and pressure. Some systems do not require all of their process variables to be

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controlled. Think of a central heating system. A basic heating system operates on temperature and disregards the other atmospheric parameters of the house. The thermostat monitors the temperature of the house. When the temperature drops to the value selected by the occupants of the house, the system activates to raise the temperature of the house. When the temperature reaches the desired value, the system turns off. Automatic control systems neither replace nor relieve the Operator of the responsibility for maintaining the facility. The operation of the control systems is periodically checked to verify proper operation. If a control system fails, the operator must be able to take over and control the process manually. In most Cases, understanding how the control system works aids the Operator in determining if the system is operating properly And which actions are required to maintain the system in a safe condition.

8. Barriers of control?
Answer: Barriers of control: Deadlines missed frequently. Poor quality of goods and services. Declining or stagnant sales or profits. Loss of leadership position or market share within the industry. Inability to obtain data necessary to evaluate employee or developmental performance. Low employee moral and high absenteeism. Insufficient employee involvement and managementemployee communications.

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 Excessive company debts or unpredictable borrowing requirements. Inefficient use of human and material resources, equipment, and facilities. Properly used, control help management respond to unforeseen developments are achieve strategic plan. Improperly designed and used, management control system can lead a company into bankruptcy.

9. How to overcome the barriers of control?

Answer: Over coming the barriers or resistance of control: Perhaps the best way to overcome resistance to control is to create effective control to being with. There are many ways to overcome the resistance of controls. Two of them are followings: Encourage Employee Participation: When employees are involved with planning and implementing the control system, they are less likely to resist it. By participating in planning, decision making, and quality control has resulted in increased employee concern for quality and a grater commitment to meeting standards. Develop Verification Producer: Multiple standards and information systems provide checks and balance in control and allow the organization to verify the accuracy of performance indicator. These two ways can helps to overcome the barriers of control.

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10.
Answer:

Types of control?

Types of control:
Feedforward Control: Feedforward control focuses on the regulation of inputs (human, material, and financial resources that flow into the organization) to ensure that meet the standards necessary for the transformation process. Concurrent control: Concurrent control takes place an activity is in progress. It involves the regulation of ongoing activates that are part of transaction process to ensure that they confirm to organizational standards. Concurrent control is designed to ensure that employee work activities produce the correct results. Feedback control: This type of control focuses on the outputs of the organization after transaction is complete. Called post action or output control, fulfils a number of important functions. For one thing, it often is used when feedforward and concurrent controls are not feasible or are to costly. Multiple control: Feedforward, concurrent, and feedback control methods are not mutually exclusive. Rather, they usually are combined into an multiple control systems. Managers design control systems to define standards of performance and acquire information feedback at strategic control points.

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Market control: Market control involves the use of price competition to evaluate output. Managers compare profits and price to determine the efficiency of their organization. In order to use market control, there must be a reasonable level of competition in the goods or service area it must be possible to specify requirements clearly. Bureaucratic control: Bureaucratic control is the use of rules, policies, and hierarchy of authority, written documentation, reward systems, and other formal mechanisms to influence employee behavior and assess performance. Bureaucratic control can be used when behavior can be controlled with market or price mechanisms. Clan control: Clan control represents cultural values almost the opposite of bureaucratic control. Clan control relies on values, beliefs, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate the reaching of organizational goals. These are the types of control.

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11.

Requirement of effective control?

For a control system to be effective, it must be:

Answer: Accurate: Information on performance must be accurate. Evaluating the accuracy of the information they receive is one of the most important control tasks that managers face. Timely: Information must be collected, routed, and evaluated quickly if action is to be taken in time to produce improvements. Objective and Comprehensible: The information in a control system should be understandable and be seen as objective by the individual who use it. A difficulty is to frustration among employees. Focused on Strategic control points: The control system should be focused on those areas where deviations from the standards are most likely to take place or where deviations would lead to the greatest harm. Economically realistic: The cost of implementing a control system should be less than, or at most equal to, the benefits derived from the control system. Organizational realistic: The control system has to be compatible with organizational realities and all standards for performance must be realistic.

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Coordinated with the Organizations work flow: Control information needs to be coordinated with the flow of work through the organization for two reasons: Each step in the work process may affect the success or failure of the entire operation, The control information must get to all the people who need to receive it. Flexible: Control must have flexibility built into them so that the organizations can react quickly to overcome adverse changes or to take advantage of new opportunities. Prescriptive and Operational: Control systems ought to indicate, upon the detection of the deviation from standards, what corrective action should be taken. Accepted by Organization members: For a control system to be accepted by organization members, the controls must be related to meaningful and accepted goals. These requirements can be applied to controls at all levels of the organization.

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12.

Operation vs. financial control?

Operation Control VS. Financial Control:

Answer: Operation Control 1. Operation control focuses on the processes the organization products of service. 2. Operation control is the control of product supply process the organization. 3. There are 3 types of Operation control1. Preliminary control 2. Screening control 3. Post action control 4. Operation control needs for 4. Financial Control needs for Financial Control 1. Financial Control concerned with the organizations financial

uses to transform resources in to resources. 2. Financial Control is the control of financial resources as they flow into the organization. 3. One item of financial controlling is budgetary control.

develop multiple control system. return a profit to the firms owner. 5. Operation control is a process 5. Financial Control has of preliminary screening & post action control promoted decision get information following by marketing sectors.

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13.

Control vs. feedback?

Answer: Control as a Feed-back System: Though feedback information helps find out the extent of departure of the performance from the stander separate programs are required to correct the departure. In other words feedback information helps compare performance with a standard and to initiate corrective action. Information feedback, which shows deviations from standards and initiates changes. We can also say that systems use some of their energy to feedback information that compares performance with a standard and initiates corrective action. A simple feedback system was shows in Figure:
New plans Controlling comparing plans with results No undesirable deviation from plans

Planning

Implementation Of plans

Undesirable Deviation Corrective action

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In controlling, managers do measure actual performance, compare this measurement against standards and identify and analyze deviations.

14.

Information system & control?

Answer: Information System & control: A management control system facilitates management with commanding control over all information regarding both internal and external environment as well as other managerial operations. Information as a means of getting real-time control in areas of importance to manager - in other words, control effected at the very time information shows a deviation from plans. The Information should be qualitative as well as quantitative. The computer plus operation research, has led to an enormous expansion of available managerial information regarding production and distribution, labor productivity, product cost etc. In fact, data do not become information until they are processed into a useable form that informs.

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15.

Feed Fowward control?

Answer:

Feed forward Control: It is now increasingly recognized that control must be directed towards the future in order to be effective. Knowing about deviations long after they occur is useless. What managers need for effective control is a system that will tell them well in time for corrective action and that problems will occur if they do not do something about them now? Feedback from the output of a system is not good enough for control. It is little more than a post-mortem, and no manager can ever change the past. ..Information ----Corrective Action
inputs process Desired values of outputs(standards)

Outputs

Feed forward

Simple feedback

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16.

Critical control points and standards?

Answer: Critical control points and standards: Standards are yardsticks against which actual or expected performance is measured. In a simple operation a manager might control through careful personal observation of the work being done. However, in most operations this is not possible because of the complexity of the operations and the fact that a manager has far more to do than personally observe performance for a whole day. A manager must choose points for special attention and then watch them to be sure that the whole operation is proceeding as planned. The points selected for control should be critical, in the sense either of being limiting factors in the operation or of showing better than other factors whether plans are working out. With such standards, managers can handle a larger group of subordinates and thereby increase their span of management, with resulting cost savings and improvement of communication. The principle of critical-point control, one of the more important control principles states: Effective control requires attention to those factors critical to evaluating performance against plans.

References
Fundamentals of Management - Dr. Md. Mainul Islam & Dr. Abdul Awal Khan (3rd Edition) Management - Ricky W. Griffin (9th Edition) Introduction to Management Stonner Management a global perspective Heinz Weihrich and Harold Koontz (10th Edition) www.thefreedictionary.com www.wikipedia.org

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