What are the steps in the control process?
a) Establishment of Standards of Performance.
Standards have to be established, in terms of profits, costs, turnover etc. In addition, this step also entails establishing how such performance will be measured. Emphasis here is on quantitative measures, albeit without disregard for qualitative considerations.
b) Measuring Actual Performance
The reporting should be reliable and reasonably accurate. The Management by Exception Principle (MBE) should be applied i.e. reporting should emphasise exceptional factors.
c) Comparing Actual and Standard Performance
Determine variances, both favourable and unfavourable. For instance, if set standards have been surpassed, it should be established why and how that standard has been exceeded.
d) Taking corrective action>
Differences in the actual performance may be either due to unsatisfactory performance or unrealistic standards. Therefore, taking corrective action entails correcting the performance (if unsatisfactory) or adjusting the plans if they are unrealistic.
