The first step in control process is the setting up of
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 the 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 are the 3 steps in the control process?The first step in the control process is to establish standards against which results can be measured.. Establishing standards.. Measuring and comparing actual results against standards.. Taking corrective action.. What are the 4 major steps of control?The four-step process of control helps you to ensure that appropriate goals are set, evaluated and modified when there is a discrepancy.. Establishing Performance Standards.. Measuring the Actual Performance.. Comparing Actual Performance to the Standards.. Taking Corrective Action.. |