The controlling function

Katie Moser, Marlee Jones, Corey Deskins, Kat Sorrell

Management as a continuous process

• Controlling is determining whether goals are being met and what actions to take if performance falls short of the goals.

Steps in controlling

• 1. Establishing standards for each of the company’s goals.

• 2. Measuring and comparing performance against the established standards to see if performance met the goals.

• 3. Taking corrective action when performance falls short of the standards.

Types of Standards• Quantity standard establishes the expected amount of

work to be completed.• Quality standards described expected consistency in

production or performance.• Time standards – the amount of time it takes complete

an activity has an effect on costs, the quantity of work completed and often on the quality of the work.

• Costs standards is an important measure of the success or failure of a firm is financial profit or loss.

• Profit equals sales income minus costs. • Managers can increase profits by either increasing

sales or decreasing cost

Measuring and comparing performance

• Variance is a difference between current performance and the standard.

• Can be positive (performance exceeds standard) or negative (performance falls short of standard)