chapter

13Fundamentals of

Controlling

Supervision:

Concepts and Practices

of Management,Second Canadian Edition

Hilgert, Leonard,

Shemko, and Docherty

© 2005 by Nelson, a division of Thomson Canada Limited

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Learning Objectives1. Describe the nature and

importance of the managerial controlling function.

2. Identify three types of control mechanisms based on time.

3. Explain the essential characteristics of effective controls.

4. Describe the essential steps in the control process.

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Learning Objectives5. Discuss the supervisor’s role in

controlling through budgets.6. Discuss the supervisor’s role in

maintaining cost consciousness and in responding to higher-level managers’ orders to reduce costs.

7. Identify additional control areas and explain how the controlling function is closely related to the other managerial functions.

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Controlling

1. Ensuring that actual performance is in line with intended performance and taking corrective action, if necessary.

2. Controls ensure that results match plans.

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Controlling

When 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.

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Employee Responses

When controls are well designed and properly implemented, they can positively influence employee motivation and behaviour.

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The Time Factor

• Feedforward controls—anticipatory

• Concurrent controls—in-process

• Feedback controls—after-the-process

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Types of Controls

1. Feedforward control — anticipatory action taken to ensure that problems do not occur

2. Concurrent control — corrective action taken during the production or delivery process to ensure that standards are being met

3. Feedback control — action taken after the activity, product, or service has been completed

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Closeness of Supervision

Supervisors must know how closely to monitor employees’ work based on the employees’

1. Experience

2. Initiative

3. Dependability

4. Resourcefulness

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Effective Controls

• Understandable

• Timely

• Suitable and economical

• Indicational

• Flexible

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Steps in the Control Process

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Do’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.

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Standards

• Tangible standards—standards for performance results that are identifiable and measurable

• Intangible standards—standards for performance results that are difficult to measure and often relate to human characteristics

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Motion and Time Studies

• Motion study—analysis of work activities to determine how to make a job easier and quicker to do

• Time study—technique for analyzing jobs to determine time standards for performing each job

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Employee Participation

Workers are more apt to accept standards as reasonable and fair when they help formulate those standards.

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Strategic Control Points

Performance criteria chosen for assessment because they are key indicators of overall performance

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Strategic Control Standards

• Number of voluntary resignations and requests for transfer

• Levels of absenteeism and tardiness• Accident frequency and severity rates• Number and types of employee

grievances• Number and types of customer

complaints• Amount of scrap and rejects

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Checking Performance Against Standards

• Personal observation

• Oral and written reports Exception principle - concept that

supervisors should concentrate their investigations on activities that deviate substantially from the standard

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Checking Performance Against Standards

• Spot checks

• Sampling TechniquesSampling - the technique of

evaluating some numbers from a large group to determine whether the group meets acceptable quality standards

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Taking 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.

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Budgetary Control

Budget—financial plan that projects expected revenues and expenditures during a set period

Budgetary control—the use of budgets to control operations so that they comply with organizational standards for making budgets

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Budget Making

• Incremental budgeting—technique for projecting revenues and expenses based on history

• Zero-base budgeting—process of assessing, on a benefit-and-cost basis, all activities to justify their existence

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Sharing 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.

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Specialized Controls

• Inventory control

• Quality control

• Production control

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Controlling 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.