ControllingControlling involves ensuring that performance does not deviate from standards. Controlling consists of five steps: (1) set standards, (2) measure performance, (3) compare performance to standards, (4) determine the reasons for deviations and then (5) take corrective action as needed (see Figure 1, below). Corrective action can include changes made to the performance standards—setting them higher or lower or identifying new or additional standards. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service. Show The measurement of performance can
be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree. CostsFinancial costs—direct
(i.e., paying for an accountant for an audit) and indirect (i.e., people employed by the organization whose primary function is related to control—internal quality control, for instance). BenefitsCost and productivity control—ensures that the firm functions effectively and efficiently. KEY TAKEAWAYS The control function can be viewed as a five-step process: (1) Establish standards, (2) Measure performance, (3) Compare actual performance with standards and identify any deviations, (4) Determine the reason for deviations, and (5) Take corrective action, if needed. Check Your Understanding Answer the question(s) below to see how well
you understand the topics covered in this section. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times. Licenses and AttributionsWhat are the steps in control process?Steps involved in Control Process. Establishing standards and methods or ways to measure performance.. Measuring actual performance.. Determining if the performance matches with the standard.. Taking corrective action and re-evaluating the standard.. What is the first step in the control process quizlet?The first step in the control process is to establish performance objectives and standards that create targets against which later performance can be evaluated. The second step in the control process is to measure actual performance and specifically identify what re- sults are being achieved.
What is the 5 step control process?The control function can be viewed as a five-step process: (1) establish standards, (2) measure performance, (3) compare actual performance with standards and identify any deviations, (4) determine the reason for deviations, and (5) take corrective action if needed.
What are the 3 steps in the control process?Basically the process of control involves three steps i.e.- (i) setting up standards (ii) performance appraisal and (iii) corrective measures.
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