• Controlling might be defined as that managerial function

which seeks to ensure an absolute conformity (i.e. agreement)

of actual performance of organizational personnel with the
planned standards to facilitate the most effective and efficient
attainment of the enterprise objectives.
• Controlling as a function of management, is always a
process; involving the following sequential steps:
• (i) Determination of standards of performance, for all phases
of organizational activity.
• (ii) Measurement of actual performance.
• (iii) Comparison of actual performance against standards; and
locating deviations.
• (iv) Analyzing the causes of deviations.
• Undertaking suitable remedial/corrective / feedback action –
to bring performance on the right track.
• Controlling consists of sequential steps:
 • NATURE OF CONTROLLING:
• PERVASIVE FUNCTION.
• CONTINUOUS PROCESS.
• BACKWARD AND FORWARD LOOKING
PROCESS.
• ACTION ORIENTED PROCESS.
 • 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.
 • 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.
 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. Analyzing Deviations: The deviations from the standards are assessed and
analyzed 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.