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Understanding the Importance and Process of Controlling in Organizations, Summaries of Business Ethics

The concept of controlling in organizations, its importance, and the three-step process involved. Controlling is the final link in the functional chain of management, ensuring goals are met and providing critical feedback for effective delegation and asset protection. The control process includes measuring actual performance, comparing it to standards, and taking managerial action to correct deviations or revise standards.

Typology: Summaries

2020/2021

Uploaded on 01/06/2022

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Monitoring and Controlling
WHAT IS CONTROLLING, AND WHY IS IT IMPORTANT?
Control is the process of monitoring, comparing, and correcting work performance.
All managers should control even if their units are performing as planned because they can’t really
know that unless they’ve evaluated what activities have been done and compared actual
performance against the desired standard.
The Purpose of Control
Effective controls ensure that activities are completed in ways that lead to the attainment of goals.
Whether controls are effective, then, is determined by how well they help employees and managers
achieve their goals.
Why is control so important?
Control is important for three main reasons:
A. Control serves as the final link in the functional chain of management. Planning can be done,
an organizational structure created to facilitate efficient achievement of goals, and employees
motivated through effective leadership. But there’s no assurance that activities are going as
planned and that the goals employees and managers are working toward are, in fact, being
attained. Controlling provides a critical link back to planning. If managers didn’t control, they’d
have no way of knowing whether their goals and plans were being achieved and what future
actions to take. The Exhibit show the planning-controlling link.
B. Controlling is also important to delegation. The development of an effective control system
may decrease resistance to delegation. Control is important, therefore, because it’s the only way
that managers know whether organizational goals are being met and if not, the reasons why.
The value of the control function can be seen in three specific areas: planning, empowering
employees, and protecting the workplace. Many managers are reluctant to empower their
employees because they fear something will go wrong for which they would be held
responsible. But an effective control system can provide information and feedback on employee
performance and minimize the chance of potential problems.
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Monitoring and Controlling

WHAT IS CONTROLLING, AND WHY IS IT IMPORTANT?

Control is the process of monitoring, comparing, and correcting work performance. All managers should control even if their units are performing as planned because they can’t really know that unless they’ve evaluated what activities have been done and compared actual performance against the desired standard. ➢ The Purpose of Control Effective controls ensure that activities are completed in ways that lead to the attainment of goals. Whether controls are effective, then, is determined by how well they help employees and managers achieve their goals. ➢ Why is control so important? Control is important for three main reasons: A. Control serves as the final link in the functional chain of management. Planning can be done, an organizational structure created to facilitate efficient achievement of goals, and employees motivated through effective leadership. But there’s no assurance that activities are going as planned and that the goals employees and managers are working toward are, in fact, being attained. Controlling provides a critical link back to planning. If managers didn’t control, they’d have no way of knowing whether their goals and plans were being achieved and what future actions to take. The Exhibit show the planning-controlling link. B. Controlling is also important to delegation. The development of an effective control system may decrease resistance to delegation. Control is important, therefore, because it’s the only way that managers know whether organizational goals are being met and if not, the reasons why. The value of the control function can be seen in three specific areas: planning, empowering employees, and protecting the workplace. Many managers are reluctant to empower their employees because they fear something will go wrong for which they would be held responsible. But an effective control system can provide information and feedback on employee performance and minimize the chance of potential problems.

C. Finally, control serves to protect the company and its assets. Today’s environment brings heightened threats from natural disasters, financial scandals, workplace violence, global supply chain disruptions, security breaches, and even possible terrorist attacks. Managers must protect organizational assets in the event that any of these things should happen. THE CONTROL PROCESS The control process is a three-step process including measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards. The control process assumes that performance standards already exist, and they do. They’re the specific goals created during the planning process. (See Exhibit ) A. Measuring is the first step in the control process. To determine what actual performance is, a manager must first get information about it. Thus, the first step in control is measuring. 1 - What we measure is probably more critical than how we measure. Why? Because selecting the wrong criteria can create serious problems. Besides, what is measured often determines the area(s) in which employees will attempt to excel. Most work activities can be expressed in quantifiable terms. However, managers should use subjective measures when they can’t. Although such measures may have limitations, they’re better than having no standards at all and doing no controlling. 2 - How We Measure? Measurement is frequently achieved through four common sources of information: a. Personal observation b. Statistical reports c. Oral reports d. Written reports

CONTROLLING FOR ORGANIZATIONAL PERFORMANCE

A. What Is Organizational Performance? Performance is the end result of an activity. And whether that activity is hours of intense practice before a concert or race or whether it’s carrying out job responsibilities as efficiently and effectively as possible, performance is what results from that activity. Managers are concerned with organizational performance— the accumulated end results of all the organization’s work activities. It’s a multifaceted concept, but managers need to understand the factors that contribute to organizational performance. B. Measures of Organizational Performance Employees need to recognize the connection between what they do and the outcomes. The most frequently used organizational performance measures include organizational productivity, organizational effectiveness, and industry rankings.

  1. Productivity is the overall output of goods or services produced divided by the inputs needed to generate that output. The management of an organization seeks to increase this ratio. Organizations and individual work units want to be productive. They want to produce the most goods and services using the least amount of inputs. Output is measured by the sales revenue an organization receives when goods are sold (selling price × number sold). Input is measured by the costs of acquiring and transforming resources into outputs.
  2. Organizational effectiveness is a measure of how appropriate organizational goals are and how well an organization is achieving those goals. That’s the bottom line for managers, and it’s what guides managerial decisions in designing strategies and work activities and in coordinating the work of employees.
  3. Industry and company rankings are often used as a measure to describe organizational effectiveness. Rankings are determined by specific performance measures, which are different for each list.