Controlling as a

Management Function

ARUN KUMAR
Assistant Professor
Department of commerce
Dyal Singh Evening College
University of Delhi
• Controlling
• A process of monitoring performance and taking action to ensure
desired results.
• It sees to it that the right things happen, in the right ways, and at the
right time.
• Done well, it ensures that the overall directions of individuals and
groups are consistent with short and long range plans.
• It helps ensure that objectives and accomplishments are consistent
with one another throughout an organization.
• It helps maintain compliance with essential organizational rules and
policies.
The Control Process

• Establish objectives and standards.

• Measure actual performance.
• Compare results with objectives and standards.
• Take necessary action.
Establish objectives and standards

• First step in establishing control system is setting standards.

Standards serve as a basic for measuring performance. They may be
expressed in quantitative or qualitative terms. A standard is a
criterion against which results can be measured. In quantitative
terms they are expressed in numbers.
• For example, number of units to be 4 produced by workers, the cost
of production, cost of distribution per unit, etc. Therefore, the
planner has to set the standards which must be valid, understandable
and acceptable and state clearly to workers from whom the results
are expected.
Measuring Actual Performance

• The second important element in the process of control is the

measurement of the actual performance. It is not only knowing what
has happened but also what is likely to happen. It means that
deviations are to be predicted in advance to take corrective action in
advance for the achievement as soon as the operations are
completed. Concurrent control, i.e., it should also be measured while
the activity is in the course of operation which makes the appraisal
possible in time.
Comparing Results with Objectives and
Standards

• Comparing the actual performance with the standards is known as

appraisal. If the standards are properly determined and methods are
clearly communicated measurement of performance becomes easier.
The manager should concentrate on major deviations while making
the appraisal of performance and should not waste his time and
energy on small deviations. This approach will give the correct, quick
and favourable results.
Finding out Deviations

While comparing the actual with standard, it is necessary to find out

the extent, nature and the basic causes for deviations. To find out the
cause of deviations one has to depend on proper, accurate and timely
information. A manager after getting the information from various
departments can easily find out the causes of deviations and the
persons who are responsible for such errors.
Remedial Measures:

• The last but riot the least element in the process of control is
Remedial actions. Correction of deviations involve improvement in
technology, direction, supervision, setting new goals, restructuring
the organization and revision of targets, set in advance. If corrective
action is not taken properly in time against the major deviations then
it will lead to heavy losses.
Features of Controlling
in management
1) Controlling is a dynamic process

• Controlling is a dynamic process. A manager is required to take a

different course of actions when an employee fails to match the
standards of performance. A manager should have the skills to decide
how to react to a certain situation.
• For example, if an employee is absent frequently, then the manger
first should talk with him and ask for the reason of his absenteeism
and try to do something about the problem, and if the problem
persists then, he should take some strict actio
2) Controlling is an end function

• Controlling is an end function because it comes into action once the

task is completed. The performance standards are decided before the
work is assigned to the employees and once the work is complete the
performance of employees is compared with the standard
performance, and if the performance of the employees is same as
that of the standard performance then no actions are required to be
taken but in case the performance doesn’t match then the manager
is required to take the corrective actions.
3) Planning and controlling go hand in hand

• It is not wrong to say that planning and controlling works together. A

manager is required to plan so that he can control the actions of
employees in order to achieve the desired outcome.
• For example, if a sales manager makes a target to make the sales of 5
million in one quarter with five salespersons working in his team,
then he will give the target of 1 million to every salesperson and will
control their actions to achieve the desired results.
4) Controlling is a pervasive function

• Controlling is a pervasive function because it can’t be escaped at any

level of the management. All management is required to control at all
levels.
• For example, a top-level manager will control the actions of a middle-
level manager and supervise the performance of the manager and
similarly, a low-level manager is answerable to a middle-level
manager.
5) Controlling is looking forward

• A manager can control the performance of an employee by

controlling the past actions. A manager keeps track of the
performance of the employee, so that follow up can be made when
the time comes to compare the performance.
Importance of
controlling
1) Controlling Motivates Employees

• Controlling doesn’t mean just giving orders to the employees. It

means that the manager guides his employees throughout the
process and provide help to them where they need.
2) Controlling Makes the efficient use of
resources

• Controlling in management helps in the proper use of resources

available in the organization.
• Under controlled environment, employees make the proper use of
resources and are careful while using them. With control,
management can make sure that the employees get maximum
output out of the available resources to them.
3) Controlling creates discipline
in the organization

• Another importance of controlling in management is the discipline in

the organization. Discipline is necessary to attain the goal in the
desired time and with available resources. People tend to become
careless if their actions are not controlled, and if they know that
there is nobody to questions them.
• By controlling management not only control the actions of
employees but also makes sure that they do that maximum output
can be obtained.
4) Controlling ensures coordination
of action
• In a large organization, there are hundreds of employees who work
together. Different work is going on different departments at the
same time. If there is no coordination between the employees of the
organization, then they might end up losing a lot of resources which
may cause loss to the organization then causing profit.
• Therefore, it is the role of the management to coordinate the actions
of employees who work in a different department, and there is little
communication between them.
5) Controlling helps in deciding
the right judgment about the
standards
• Standards cannot be decided over a hunch. It is management that
makes sure that standards are decided with proper analyses of the
performance of past projects, the market condition, the available
resources, and the capacity of the organization.
• This can all be possible if control the work in the organization, and
with their expertise and skills can make the right judgment of
standards.
6) Controlling aids in the
accomplishment of
organizational goals
• And last but not least important of controlling in management is the
accomplishment of a goal. The owner of the business or top
management has put their money in the business with the intentions
to make more money out of it.
• Therefore, their primary goal in every project is to make more profit,
and a manager at a low level is answerable for the performance of his
team’s performance.
Elements of an Effective
Control System
• 1. Direct Control:
• Modern system of control is employee-oriented rather than work-
oriented. Control should be exercised on people who had machine
and materials. People generally oppose the control measures, so
their attitude should be made to change by proper education about
control and its significance.
• 2. Control by Objectives:
• The control must be goal oriented and by objectives. As objectives
clarify the expected results in meaningful and realistic terms, they
provide the control standards with which actual performance can be
measured. The control system should be according to the nature and
needs of organisations.
• 3. Control should be Forward Looking:
• Control must be forward looking in character. It should bring out the
deviation in light at an earliest. It must focus on strategic points with
exceptions.
• 4. Control should be Simple and Balanced:
• Control must be simple and balanced in nature. A control device that
is not intelligible cannot be practiced by the manager. So control tools
must be simple and intelligible to both – controller and controlled.
• 5. Managerial Self-Control:
• Control is effected through managerial positions in the organisation
structure. So each managerial position must be vested with adequate
authority for exercising control. Allocation of fixed duties and
responsibilities goes a long way towards securing effective control in
the organisation.
• 6. There should be Flexibility in Control:
• Control system should provide for some change but its basic
structure must be retained. It has been seen that even the best plans
and other pre-determined criteria need to the changed from time to
time.
• 7. Economy in Control:
• Economy is an important requirement of any control system. It is a
truism to state the control must be worth its results. A simple control
procedure proves too economical.
• 8. Feedback System:
• Feedback is the process of adjusting future actions based upon
information about past performance. Recently the concept has
received attention very much. It shows the worth and utility of
control process.
• 9. Control should not be Negative:
• It must be positive and constructive. It must be helpful. Control is not
a command. It is a guidance. The management should recognise the
importance of human beings in control systems.
 Major Qualities of an
Effective Control System
• Quality # 1. Suitable:
• The control system must be suitable to the needs of an organi­zation.
It must conform to the nature and needs of the job and the area to
be controlled.
• For example, the control system used in production department will
be different from that used in sales department.
• Quality # 2. Simple:
• The control system should be easy to understand and operate. A
complicated control system will cause unnecessary mistakes,
confusion and frustration among employees. When the control
system is understood properly, employees can interpret the same in a
right way and ensure its implementation.
• Quality # 3. Selective:
• To be useful, the control system must focus attention on key, strategic
and important factors which are critical to performance. Insig­nificant
deviations need not be looked into. By concentrating attention on
important aspects, managers can save their time and meet problems
head-on in an effective manner.
• Quality # 4. Sound and Economical:
• The system of control should be economical and easy to maintain.
Any system of control has to justify the benefits that it gives in
relation to the costs it incurs. To minimize costs, management should
try to impose the least amount of control that is necessary to
produce the desired results.
• Quality # 5. Flexible:
• We live in a world of supersonic changes. Competitive, techno­logical
and other environmental changes force organizations to change their
plans. As a result, control should be necessarily flexible. It must be
flexible enough to adjust to adverse changes or to take advantage of
new opportunities.
• Quality # 6. Forward Looking:
• An effective control system should be forward looking. It must
provide timely information on deviations. Any departure from the
standard should be caught as soon as possible. This helps managers
to take remedial steps immediately before things go out of gear.
• Quality # 7. Reasonable:
• According to Robbins, controls must be reasonable. They must be
attainable. If they are too high or unreasonable, they no longer motivate
employees. On the other hand, when controls are set at low levels, they
do not pose any challenge to employees. They do not stretch their
talents. Therefore, control standards should be reasonable — they
should challenge and stretch people to reach higher performance
without being de-motivating.
• Quality # 8. Objective:
• A control system would be effective only when it is objective and
impersonal. It should not be subjective and arbitrary. When stan­dards
are set in clear terms, it is easy to evaluate performance. Vague
standards are not easily understood and hence not achieved in a right
way. Control should be accurate and unbiased. If they are unreliable and
subjective, people will resent them.
• Quality # 9. Responsibility for Failures:
• An effective control system must indicate responsibility for failures.
Detecting deviations would be meaningless unless one knows where
in the organization they are occurring and who is responsible for
them. The control system should also point out what corrective
actions are needed to keep actual performance in line with planned
performance.
• Quality # 10. Acceptable:
• Controls will not work unless people want them. They should be
acceptable to those to whom they apply. Controls will be acceptable
when they are- (i) quantified, (ii) objective (iii) attainable and (iv)
under­stood by one and all.
Tools of Controlling
Available to Modern
Management
• The tools of control available to modern management are as
follows:
• 1. Budgetary Control.
• 2. Cost Control.
• 3. Statistical Control.
• 4. Work Measurement and Production Control.
• 5. Quality Control.
• 6. Financial Control, and
• 7. Documentation.
• 1. Budgetary control supplies quantitative data for various sections.
• 2. Cost control will permit you to determine the limits of expenditure
and to see that they are not exceeded.
• 3. Statistical control ensures that the figures are supplied at the right
time.
• 4. Work measurement and Production control enables you to check
work values.
• 5. Quality control ensures that standards will be maintained.
• 6. Financial control will keep tight grip on money.
• 7. Documentation makes sure that you have the information as and
when you want it and in usable form.
Principles according to
Lyndall Urwick
• Principle # 1. Uniformity:
• The main aim of control is to get the best work performance. This can
be achieved with the principle of uniformity. It requires the
presentation of information, figures and reports for control purposes
in terms of organization structure. The principle of parity between
authority and responsibility should also be followed.
• Principle # 2. Comparison:
• This implies that all information and reports used for control should
be in terms of standard of performance. The aim of comparison is not
only to check the deviation but to make a manager to predict future
results. An efficient control system should provide quick comparison
so that the manager of control can attend to possible trouble while
the operation is in control.
• Principle # 3. Utility:
• It implies the importance of reports for control changes directly with
the suitability of the period covered by report keeping in view of the
purpose of control. A manager can be successful in controlling by
uniting the ideas of men around him.
• Principle # 4. Exception:
• The exception principle holds that the manager should devote
greater time to the strategic points of unusual time. Maximum
control can be obtain if critical points are identify and a close
attention is paid to them. Good control does not necessarily mean
maximum control which is often expensive. So, principle of exception
is important.
 Timings for
Implementing Control
1. Feed Forward Control (Pre-Action Controls):
• It is an approach to control the performance of an organisation that
attempts to forecast the future state of affairs and to take the
necessary action before problems arise. It is called feed forward
control because it takes place in advance of the actual activity.

• Scheduled preventive maintenance programs for aircraft that major

airlines are required to have are a form of feed forward control.
They’re designed to detect and hopefully prevent structural damage
that might lead to a tragic crash. Another example of pre-action control
is budget. It ensures that before an action is undertaken the necessary
human, material, and financial resources have been estimated so that
when the time for action occurs, the requisite resources will be
available in the types, quality, quantities, and locations needed.
• 2. Concurrent Control:
• Concurrent control, as its name implies, takes place while an activity
is in progress. The best-known form of concurrent control is direct
supervi­sion. When a manager directly oversees the actions of a
subordinate, the manager can concurrently monitor the employee’s
actions and correct problems as they occur.
• When control is enacted while the work is being performed,
management can correct problems before they become too costly.
Although there’s obviously some delay between the activity and the
manager’s corrective response, the delay is minimal.
• 3. Feedback Control (Post Action Controls):
• The most popular type of control relies on feedback. As the term
suggests, post-action controls measure the results after the activity is
done. The focus is on results of operations. Examples of feedback
controls include periodical (weekly, monthly, quarterly, annual)
reports.
• They guide future planning, inputs and process designs. Post-action
controls are also used as a basis for rewarding or encouraging
employees, For example- meeting a standard may result in a bonus.
The major drawback of this type of control is that by the time the
manager has the information, the damage is already done.
 How a Manager
Exercises Controllin
1. The purpose of a control mechanism is to assure the completion of
all tasks:
(a) In the order planned,
(b) In the time schedule,
(c) In the precise manner specified,
(d) By the person or persons to whom assigned.
2. The manager must see that:
(a) Flow of work is uninterrupted,
(b) Each duty is performed in proper sequence,
(c) Work is finished according to schedule.
3. The manager must know:
(a) How each activity is to be accounted for?
(b) Who is accountable for each activity?
(c) Available means to accomplish desired results,
(d) If any department or part of the work is running behind schedule,
in time to correct the situation.
4. Work running behind schedule may be due to:
(a) Sudden and unexpected increase in volume of work,
(b) Absence of employees assigned to that work,
(c) Ineffective work,
(d) Ineffective supervision.
5. The manager should know daily for each department:
(a) Volume of work received,
(b) Quantity of work completed,
(c) Amount of work left over, if any,
(d) Reasons for work being left over.
Limitations of
Controlling
• Limitation # 1. Lack of Satisfactory Standards:
• It is quite difficult to fix satisfactory standards for many intangible
activities such as results of management, developments, human
relations and public relations. Activities of the workers for service of
advisory nature and other activities relating to the behavior of the
workers do not indicate quantitative output and identify their level of
attainment. Therefore, controlling becomes difficult.
• Limitation # 2. Effects of External Factors:
• Internal factors could be checked and put in the right perspective in
time, but it is impossible to check and control the external factors.
For example, change in the Government policy, new inventions or
discoveries, changes in the fashions and liking of the consumers etc.,
cannot be checked by the control system.
• Limitation # 3. Imperfections in Management:
• Economic consideration is not possible if we measure everything and
everybody’s work. Intangible performance always brings difficulties
and responsible for making the task complicated for the
measurement of results. If one fails to measure the performance in
quantitative and qualitative terms, the results of behavioural
activities have to be evaluated by managers on their own thinking
and judgment.
• Limitation # 4. Problem in Setting of Individual Responsibilities:
• Assignment of individual responsibilities becomes difficult. The
effective impact of control in most of the cases depends on how
responsible are the workers in the organization.
• Limitation # 5. Limitation of Corrective Actions:
• To some extent it is true that there are certain organizations which
have taken corrective actions quickly and were successful in avoiding
errors. But problems arise where management does not take
corrective action in time to avoid deviations.
• Limitation # 6. More Expansive Devise:
• To make the control more systematic and effective. It requires careful
and timely investigation of different business activities. It requires
appointment of more skilled people, which requires more money to
reward the workers for their work. Thus, it becomes a costly affair in
terms of money and time.
Measures to Address
the Opposition to
Control Measures
• 1. Involvement of Employees in Control Design:
• Employees concerned with translating the goal into reality should be
involved in setting standards. This will add more acceptability to the
standards.
• 2. Appraisal of Facilities before Installing Control:
• Managers should thoroughly examine the facilities available in the
organization to accomplish the standards set. The standards set
should be realistic and attainable. Since unattainable standards leads
to employee frustration, managers should examine the possibility of
goal attainment from different angles before setting realisable target.
• 3. Employee Education about Control:
• Employees should be educated that control measure is not tailored
to penalise them but to improve their skills and competencies
thereby increasing their value in the job market.
• 4. Non-Existence of Bias:
• There should not be any room for bias, prejudice or discrimination in
administering control system. Employees themselves may be involved
in evaluation process so that they know the reality about their
performance standard.
• 5. Selective Control:
• Managers should not bring in control system to generally control the
employees. Where a section of employees is not conforming to the
control measures, they should be selectively enforced on such errant
employees. Institution of a control system to control all the
employees in terms of the negative behaviour of a few is likely to
brew trouble in relationship climate.
• 6. Enlightening the Need for Control:
• Egoistic employees should be enlightened on the need for assuming
responsibility. They should be imparted on the need to learn in ever
changing business environment. They should be taught to handle
crisis, thereby building a positive attitude in them.
• 7. Mechanism to Reward Desirable Behavior:
• A reward mechanism should be integrated with control system so
that acceptable performance or positive performance is recognized
and rewarded.
• 8. Free Flow of Communication:
• There should not be any block in the free flow of communication
between employees and management. The communication from
employee expressing their heart burns, ill feeling, grievances,
complaints, dissatisfaction etc., should be allowed to be transmitted
without any hindrance. The managers too should not miss any
opportunity to persuade the employees to impress on them the need
for control for their healthy career growth.