Jomo Kenyatta University of Agriculture and Technology

MASTERS OF BUSINESS ADMINISTRATION

COURSE UNIT: CONTEMPORARY MANAGEMENT

ASSIGNMENT: I

The Management Cycle

GROUP: IV

Acheng Doris Odit

Jesca Ndosi
Jude Thaddaeus Muyoma

November, 2015

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Qn: Describe Control as a Function of Management

1.1 Control as a Component of the Management Process

Controlling is one of the five components of the management process which includes a four
phased process of:- planning, entailing setting organizational objectives; organizing, which
involves delegating resources and coordinating tasks; leading, which involves influencing
employees to work towards achieving the organizational goals; and finally controlling (Lussier,
2008).

Figure 1 below illustrates the management cycle

Figure 1 The Management Process

Planning

Controlling Organising

Leading

Source: JKUAT MBA Group IV, 2015

1.2 Defining Control as a Component of Management

Several definitions have been fronted for the term control as a component of management.

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In establishing a broad definition of the term control The Oxford dictionary defines it as:-
to determine the behaviour or supervise the running of, to maintain influence
or authority over...to regulate...

Within the context of management science, the technical definitions for control as a function
of the management cycle do not deviate from the broad definition of control.

Lussier, (2008) defines control as :-

the process of establishing and implementing mechanisms to ensure that
objectives are achieved. An important part of controlling is monitoring and
measuring progress toward the achievement of objectives and taking corrective
action when necessary.

Giraud, et al., (2011) further define control as:

an approach that enables a company to produce desired results (generally
expressed in terms of performance) by taking action to achieve those results
and by dealing with the dangers brought on by external difficulties (particularly
those related to the market, competitors and the economic or political context)
and the internal difficulties of the organisation. (Hence), management control
can be defined as the process whereby a company sets itself performance
objectives and strives to achieve them as best it can over time. It is a method for
managing the performance of the company.

Mockler (1970) provides a comprehensive perspective of the control function of the

management process by defining it as :
a systematic effort by business management to compare performance to
predetermined standards, plans, or objectives in order to determine whether
performance is in line with these standards and presumably in order to take any
remedial action required to see that human and other corporate resources are
being used in the most effective and efficient way possible in achieving
corporate objectives.

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Hence, on the basis of the above definitions, controlling as a component of the management
process can be construed to refer to all and any activities that monitor, compare and correct
work performance in alignment with organisational goals. As further elobarated by Giraud, et
al., (2011) Management control as an approach, is pursued over time: It takes place both before
the action, at the planning phase, during the planning phase, and after the action in the
monitoring and analysis of results phase. The approach is therefore progressive, and is hence
reffered to as a process.

1.3 Control as Process

Control as a function of management involves four phased sequential process. These include:-
first, establishing standards to measure performance; second, measuring actual performance;
third, comparing performance with the pre defined standards; and lasrly taking corrective
action (Lussier, 2008). Figure 2 below provides an illustration of the control process.

Figure 1.2 Controlling as a Process

Estabishing
standards to
measure
performance

Measuring actual
performance

Comparing
Performance with the
pre-defined
standards

Taking Corrective
Action

Source: JKUAT MBA Group IV, 2015

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1.3.1 Phase I: Establishing standards to measure performance
In the control process, the first phase, being establishing standards to measure performance ,
involves developing a framework through which performance geared towards achieving
organisatinal goals shall be monitored (Lussier, 2008). Goals that can be be monitored through
the established framework may include, financial, operational and strategic goals as illustrated
in Figure 3 below.

Figure 3: Different Planning Horizons

Source: (Giraud, et al., 2011)

1.3.2 Phase II: Measuring Actual performance

The second phase involves the process of developing tools for tracking progress towards
achieving the pre-defined organisational goals. These may include financial statements such as
the balance sheet and income statement, customer satisfaction survey reports, employee
performance appraisal. Actual measurements may be based on pre-defined performance
indicators or measures or scales as illustrated in Figure 4 below.

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Figure 4: Performance Measurement Tools

(Giraud, et al., 2011)

1.3.3 Phase III: Comparing Performance with the Standard

The third phase involves comparing actual performance as collected through performance
tools, at the second phase of the control cycle, with the pre-defined performance benchmarks
as developed at the planning phase of the management cycle. For instance, comparing projected
and planned revenue targets with actual sales as reported through the income statement and
finding variances in performance either below, meeting or exceeding set targets (Giraud, et al.,
2011). This concept is illustrated in Figure 5 below.

Figure 5: Progressive Comparison of Actual and Planned Performance

(Giraud, et al., 2011)

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1.3.4 Phase IV: Taking Corrective Action
The last phase of the control process is done subsequently after the performance has been
compared to the predefined standards. Where actual performance is below the pre-defined
standards, management devises strategies to improve performance and mitigate the effects of
poor performance on long term organisational goals. An example of this would be dismissing
non performing staff and replacing them with competent staff (Giraud, et al., 2011).

1.4 Why Control is Essential?

Control as a function of the management process is important as it helps an organisation:-
a) To Accomplish organisational goals through identifying deviations from
an organisations strategic intent and taking relevant correctve actions so as
to minimise the difference between the expected and actual results.

b) To Judge accruacy of standards through benchmarking actual standards

with expected standards and redefining standards where necessary.

c) To make efficient use of resources through constantly checking that there

is no wastage of financial, human or any other organisational resources.

d) To improve employee motivation as employees are aware their work will be

evaluated and rewarded where satisfactory progress is identified.

e) To synchronise all organisational activities with organisational goals

REFERENCES
Giraud, F. et al., 2011. The Fundamentals of Management Control. s.l.:Pearson Education
France.
Lussier, R. N., 2008. Management Fundamentals. Ohio: South-Western .
Mockler, R. J., 1970. Readings in Management Control. New York: Appleton-Century-Crofts.