Chapter 6 » Controlling

1st Semester


Controlling is the basic managerial function. It is the process of ensuring the actual activities confined to planned activity. It is an essential function for all levels of management. It ensures the right things are done in the right manner at right time. Each and every organization set the goals. All activities are directed towards the goals. Controlling is defined as a measurement of Actual performance and expected performance and taking corrective action. Its purpose is to make sure that actual performance is consistent with plans. In fact control helps managers to monitor the effectiveness of their planning, their organizing and their directing activities.
Importance of controlling
1. Execution of plans– control helps in ensuring the performance of plans through regular examination and evaluation of performance of work that results the performance of activities for accomplishment of goals.
2. Helps in supervision– control helps in reducing deviation between standard performance and actual performance through effective control system established by the supervisor
3. Effective delegation and decentralization of authority – Controlling is that mechanism which monitor about authority issued that can help to delegate and decentralize the authority
4. Reduction of cost– when control is effective employees will have better performance, proper utilization of resources and prevention of leakage and wastage which helps in reduction of cost
5. Psychological pressure controlling affects the psychological pressure of employees. When the employees know that their performance and activities done will be evaluated and just than they naturally work hard and their performance will be increased.
6. Optimum utilization of resources– controlling plays a vital role for proper utilization of human, physical, and financial resources to ensure correct work performance with respect to cost, quality and time or not.
7. Helps in fulfillment of goals– control provide standard for approval of actual performance it helps to accomplish the plan and achieve goals.
8. Helps in coordination– an organization grows in size and diversity. They become complex and also have to develop various department and units. Therefore, controlling help to establish the coordination in different department and units.

Process of controlling

1. Establishing or setting standards– the first step of controlling is to set standard against which results can be measured. For setting standard, targeted results must be identified and it should be quantitative as far as possible. Quantitative term can make controlling effective. Standards are expressed in general term as
a.       Cost should be reduced
b.      Orders should be executed
c.       Overhead must be reduced
d.      All orders must be executed in 2 days or so on.
Standards can be expressed in qualitative as well as qualitative terms. The quantitative are physical standard, cost and revenue standards, capital standards etc. the qualitative standards are related to employees morale, motivation, relations between superior and subordinates and public etc. quantitative standard should be flexible.
2. Measuring actual performance– in this step, actual performance of employees, group or units is measure. A manager should examine actual performance on the basis of given standard which id definite set of work assigned to definite employees different techniques can be used to measure the actual performance. In convenience of manager, he develops better information system to measure the actual performance. Actual performance measurement system should be a regular and constant basis so that it can provide reliable and regular feedback to the management.
3. Comparing actual performance with standard– after measuring actual performance, those results should be compared with standard set in the first step to know if the exp results are achieved or not . For that, good sys of comparison between performance and standard should be maintained. These comparison should reveal it the actual performance is equal, lower or higher than that of predetermined standards. If lower standards are achieved the manager should find out the deviation and take corrective action.
4.  Taking corrective actions– after comparing actual performance with the standard, if any deviation is detected, and then corrective actions should be taken and initiated. If performance does not meet the standard, it is duty of manager to take corrective action and further help the organization to overcome any difficulty. The corrective action may be related to
a.       Revision of standard if they seem to be unattainable
b.      Revision of strategies, policies and procedures
c.       Additional employees training
d.      Greater motivation
e.      Change in the existing technique of direction
f.        Product design improvement
Essentials of effective control
1. Suitability– the control system should be appropriate to the nature and needs of various activities to serve the specific area or department of the organization
2. Timely and forward looking– control system in the management of the organization should be used to evaluate the deviations timely and take corrective measures in time.
3. Simplicity– effective control system should be very simple and easy to understand by the concerned manager and subordinates.
4. Economy– the controlling system should be very economic and less costly. The benefits should be more than that of actual expenditure related to the common goal
5. Objectives– the control system should be objective in order to specify the expected result in definite terms in terms of personal likes and dislikes of manager, subordinates and other information users etc.
6. Flexibility– every organization operates business in a dynamic environment. Controlling system should ne flexible so that it could be adjusted in every environment
7. Focus on strategic plans– controlling system should focus on critical areas where deviations from standards are most likely to occur and they cause loss and damage. So controlling system should concentrate on those areas where corrective action can be applied effectively
8. Coordinates with organizational workflow– the information to be used for the control must be coordinated with the organizational work flow for two main reason:
a.       Each step in the workflow may affect the entire authority
b.      Control information must reach every one who needs it.
9. Prescriptive and operational– control system should be prescriptive and operational. And if it does not prescribe remedies and help for smooth operation, it is not useful.