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Controlling

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32 views11 pages

Controlling

Uploaded by

anmolsingh9322
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Control

Meaning & Definition: Controlling involves


comparison of actual performance with the planned
performance. If there is any difference or deviation,
then finding the reasons for such difference and
taking corrective measures or action to stop those
reasons so that they don‘t re-occur in future and
that organizational objectives are fulfilled
efficiently.

Importance of Controlling
1. Controlling helps in achieving organizational
goals: The controlling function measures progress
towards the organizational goals and brings to
light/indicates corrective action.

2. For Evaluating/Judging accuracy of


standards: A good control system enables
management to verify whether the standards set are
accurate or not by careful check on the changes
taking place in the organizational environment.

3. Making efficient use of resources: By the


process of control, a manager seeks to reduce
wastage of resources.

4. Improves employees motivation: A good


control system ensures that employees know well
in advance what they are expected to do & also the
standard of performance. It thus motivates & helps
them to give better performance.

5. Facilitating Coordination in action: In


controlling each department and employee is
governed by predetermined standards which are
well coordinated with one another. Control
provides unity of direction.

6. Ensuring order and discipline: Controlling


creates an atmosphere of order and discipline in the
organization by keeping a close check on the
activities of its employees.

Nature of Controlling/Features of Controlling

1. Goal oriented: Controlling is directed towards


accomplishment of organizational goals in the best
possible manner.
2. Pervasive: Controlling is an essential function of
every manager and exercised at all levels of
management.

3. Continuous: It is not an activity to be pursued in


the end only; it has to be done on a continous basis.

4. Controlling is looking back: Controlling involves


measurement of actual performance and its
comparison with the desired performance. It is the
process of checking and verification.
5. Controlling is forward looking: It is related to
future because it seeks to improve future results on
the basis of experience gained in the past.

6. Depends on planning: It pre supposes existence


of planning because without planning no control is
possible.
7. Action oriented*: Control has no meaning if no
corrective action is taken; So timely action should
be taken to prevent deviations.

8. Primary Function of Management* – controlling


is performed at all levels and in all types of
organizations.

9. Brings back management cycle back to


planning:* Control should not be viewed as the last
function. In fact it links back to planning.

Controlling involves

• Comparing actual performance with standards

• Finding out deviations

• Taking corrective action so that they don‘t repeat


in future These are the guidelines when future
planning is done. Thus controlling not only
completes one cycle of management process and
also helps to improve planning in the next cycle.

Relationship between Planning and Controlling

Planning and controlling are interrelated and in fact


reinforce each other in the sense that-

1. Planning is pre-requisite for controlling. Plans


provide the standard for controlling. Thus, without
planning, controlling is blind. If the standards are
not set in advance managers have nothing to
control.
2. Planning is meaningless without controlling. It is
fruitful when control is exercised. It discovers
deviations and initiates corrective measures.

3. Effectiveness of planning can be measured with


the help of controlling.

4. Planning is looking ahead and controlling is


looking back: Planning is a future oriented
function as it involves looking in advance and
making policies for the maximum utilization of
resources in future that is why it is considered as
forward looking function.

In controlling we look back to the performance


which is already achieved by the employees and
compare it with plans. If there are deviations in
actual and standard performance or output then
controlling functions makes sure that in future
actual performance matches with the planned
performances.

Therefore, controlling is also a forward looking


function. Thus, planning & controlling cannot be
separated. The two are supplementary function
which support each other for successful execution
of both the function. Planning makes controlling
effective whereas controlling improves future
planning.

Controlling Process

1. Setting Performance Standards: Standards are


the criteria against which actual performance
would be measured. Thus standards become basis
for comparison and the manager insists on
following of standards.
2. Measurement of Actual
Performance: Performance should be measured in
an objective and reliable manner which includes
personal observation, sample checking.
Performance should be measured in same terms in
which standards have been established, this will
facilitate comparison.

3. Comparing Actual Performance with


Standard: This step involves comparison of actual
performance with the standard. Such comparison
will reveal the deviation between actual and desired
performance. If the performance matches the
standards it may be assumed that everything is
under control.

4. Analysing Deviations: The deviations from the


standards are assessed and analysed to identify the
causes of deviations.

5. Taking Corrective Action: The final step in the


controlling process is taking corrective action. No
corrective action is required when the deviation are
within the acceptable limits. But where significant
deviations occur corrective action is taken.

Limitations of Controlling

1. Difficulty in setting quantitative standards:

Control system loses its effectiveness when


standards of performance cannot be defined in
quantitative terms. This makes comparison with
standards a difficult task.

e.g areas like human behaviour, employee morale,


job satisfaction cannot be measured quantitatively.

2. Little control on external factors:


An enterprise cannot control external factors like
government policies, technological changes,
competition. etc.
3. Resistance from employees:

Control is resisted by the employees as they feel


that their freedom is restricted. E.g employees may
resist and go against the use of cameras to observe
them minutely.

4. Costly:

Control involves a lot of expenditure, time and


effort. A small enterprise cannot afford to install an
expensive control system.
Managers must ensure that the cost of installing
and operating a control system should not exceed
the benefits derived from it.

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