Introduction to Controlling

to Controlling
Chapter 17
Management


Stephen P. Robbins Mary Coulter


tenth edition

Outcomes Follow this Learning Outline as you read and study this

17.1 What Is Control and Why Is It Important?
Define controlling.
Discuss the reasons why control is important.
Explain the planning-controlling link.
17.2 The Control Process
Describe the three steps in the control process.
Explain why what is measured is more critical than how it’s measured.
Explain the three courses of action managers can take in controlling.

Outcomes
17.3 Controlling Organizational Performance
Define organizational performance.
Describe three most frequently used

Outcomes
17.5 Contemporary Issues in Control
Describe how managers may have to

Is Control?
Controlling
The process of monitoring activities to ensure that they

Is Control Important?
As the final link in management functions:
Planning
Controls let

17–1 The Planning–Controlling Link

Control Process
The Process of Control
Measuring actual performance.
Comparing actual performance against

17–2 The Control Process

How and What We Measure
Sources of Information (How)
Personal observation
Statistical reports
Oral

Control Criteria (What)
Employees
Satisfaction
Turnover
Absenteeism
Budgets
Costs
Output
Sales

17–3 Common Sources of Information for Measuring Performance

the degree of variation between actual performance and the standard.
Significance

17–4 Defining the Acceptable Range of

17–5 Example of Determining Significant Variation

Managerial Action
Courses of Action
“Doing nothing”
Only if deviation is judged to

Managerial Action
Courses of Action (cont’d)
Revising the standard
Examining the standard to

17–6 Managerial Decisions in the Control Process

for Organizational Performance
What Is Performance?
The end result of an activity
What

Performance Measures
Organizational Productivity
Productivity: the overall output of goods and/or

Performance Measures (cont’d)
Organizational Effectiveness
Measuring how appropriate organizational goals are and

and Company Rankings
Industry rankings on:
Profits
Return on revenue
Return on shareholders’ equity
Growth

Corporate Culture Audits
Compensation and benefits surveys
Customer satisfaction surveys

17–7 Popular Industry and Company Rankings

for Measuring Organizational Performance
Feedforward Control
A control that prevents anticipated problems

for Measuring Organizational Performance (cont’d)
Feedback Control
A control that takes place

17–8 Types of Control

Controls
Traditional Controls
Ratio analysis
Liquidity
Leverage
Activity
Profitability
Budget Analysis
Quantitative standards
Deviations

17–9 Popular Financial Ratios
Objective Ratio Calculation Meaning

17–9 Popular Financial Ratios (cont’d)
Objective Ratio Calculation Meaning

Controls
Managing Earnings
“Timing” income and expenses to enhance current financial results,

for Measuring Organizational Performance (cont’d.)
Balanced Scorecard
Is a measurement tool that

Controls
Purposes of Information Controls
As a tool to help managers control

Controls (cont’d)
Management Information Systems (MIS)
A system used to provide management

of Best Practices
Benchmark
The standard of excellence against which to measure

Issues in Control
Cross-Cultural Issues
The use of technology to increase direct

Issues in Control (cont’d)
Workplace Concerns
Workplace privacy versus workplace monitoring:
E-mail, telephone,

17–11 Top Internet Video Sites Viewed

Source: Bobby White, “The New
Workplace Rules: No Video
Watching,” Wall Street Journal,
March 4, 2008, p. B3.

17–12 Controlling Employee Theft
Sources: Based on A.H. Bell and

17–13 Workplace Violence
Witnessed yelling or other verbal abuse 42%
Yelled at co-workers themselves 29%
Cried

Source: Integra Realty Resources, October-November Survey of Adults 18 and Over, in “Desk Rage.” BusinessWeek, November 20, 2000, p. 12.

17–14 Controlling Workplace Violence
Sources: Based on M. Gorkin, “Five

Issues in Control (cont’d)
Customer Interactions
Service profit chain
Is the service sequence

Issues in Control (cont’d)
Corporate Governance
The system used to govern a

to Know
controlling
market control
bureaucratic control
clan control
control process
range of variation
immediate corrective action
basic

productivity
organizational effectiveness
feedforward control
concurrent control
management by walking around
feedback control
economic value added (EVA)
market value added (MVA)

to Know (cont’d)
management information system (MIS)
data
information
balanced scorecard
benchmarking
employee theft
service profit chain
corporate

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