Managers must carefully select the number of standards and what is measured. Discuss how strategic control points should be selected.

1.Describe the controlling function and its relationship to the other managerial functions.

2. Controlling without the ability to take fast and effective corrective actions makes no sense. Explain why this is the case.

3. To a large degree, controlling is a forward-looking function. Do you agree? Explain why or why not.

4. What are the basic requirements of a control system?

5. Compare and contrast the three types of control systems?

6. In performing the control function, the supervisor must follow three basic steps. What are they?

7. Managers must carefully select the number of standards and what is measured. Discuss how strategic control points should be selected.

8. What is benchmarking? What is its relationship to the controlling function?

9. What are the basic approaches to budgeting?

10. What are the basic types of budgets?

study. Then, the selected process is
documented. Finally, performance
measures for the process are defined.
2. Find: This involves identifying information
sources that will be used to
collect benchmarking information.
This phase often is made difficult
by the lack of standard performance
measures that can be used to facilitate
an initial comparison to determine
which companies have the better
3. Collect: During this stage of the
process, specific informationcollection
methods are selected.
4. Analyze: Benchmarking information
collected in the previous phase is
analyzed in accordance with the
original customer requirements.
Recommendations for actions are
5. Improve/action: In this last stage,
generated from the previous stage
are implemented. The action taken
may range from producing a report
to changing the organization’s
products or services.
Benchmarking and quality
Organizations are driven to
benchmark by the market competition
in order to improve product and
service quality, or by their mission or
by their management. But in order
for benchmarking to be successful, an
organization needs to have a mandate
to improve and a commitment to
follow through.
In every company, multiple things
can be benchmarked and improved. The
key lies in understanding what “quality”
means for each aspect of the organization.
In corporate benchmarking,
quality is defined as how well the
company meets its customers’ expectations.
As technology and customer
requirements evolve over time, defining
quality measures becomes a moving
target. Benchmarking is used as one
of the tools in a relentless pursuit to
achieve excellence in products and
services. The application of benchmarking
produces two results —
measures that indicate process excellence
and process enablers that have
produced the excellent results.
According to W. Edwards Deming,
the major cause of poor quality is
variation. Thus, Deming’s approach
is to reduce variability in the process.
Figure 1 shows benchmarking as the
continuous process of finding and
applying adaptable best practices.
As variation decreases, quality and
customer satisfaction increases proportionally.
Therefore, benchmarking is
a means of implementing Deming’s
model of quality. Planning the benchmarking
study requires companies to
identify critical variables or characteristics
that have a direct influence on
quality of the product or service, thus
affecting customer satisfaction. Once
identified, companies must determine
the appropriate type of benchmark
study, establish the benchmark targets
and identify the appropriate benchmark
partners. These are external/internal
organizations that have best-in-class
practices or standards.
As a part of the quality improvement
process, the organization provides
benchmarking tools for analysis and
problem solving. How appropriate
benchmarking is to the problem being
solved should be considered. One way
is to make benchmarking a part of the
formally defined process. It becomes
one of the steps. Another way is to
require benchmarking as a part of a
quality improvement project investigation.
During the audit of a quality
improvement project, the need for
benchmarking can be reinforced.
Case study: Benchmarking
at a paint company
One of North America’s leading architectural
coatings companies adopted
the benchmarking tool to improve
the quality of its products and gain a
competitive advantage.
The paint industry in North
America largely is dominated by a few
companies competing in the big box
retailers, such as Home Depot and
Wal-Mart Inc., alongside small regional
companies owning franchisee stores.


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