Introduction to management (Controlling)

Definition: Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Features of Controlling

An effective control system has the following features:

• It helps in achieving organizational goals.
• Facilitates optimum utilization of resources.
• It evaluates the accuracy of the standard.
• It also sets discipline and order.
• Motivates the employees and boosts employee morale.
• Ensures future planning by revising standards.
• Improves overall performance of an organization.
• It also minimises errors.

Controlling and planning are interrelated for controlling gives an important input into the next planning cycle. Controlling is a backwards-looking function which brings the management cycle back to the planning function. Planning is a forward-looking process as it deals with the forecasts about the future conditions.

Process of Controlling

Control process involves the following steps as shown in the figure:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Control standards are categorized as quantitative and qualitative standards. Quantitative standards are expressed in terms of money. Qualitative standards, on the other hand, includes intangible items.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.

Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.

Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to the standard plan. An effective control system enables managers to avoid circumstances which cause the company’s loss.

Types of control

There are three types of control

Feedback Control: This process involves collecting information about a finished task, assessing that information and improvising the same type of tasks in the future.

Concurrent control: It is also called real-time control. It checks any problem and examines it to take action before any loss is incurred. Example: control chart.

Predictive/ feedforward control: This type of control helps to foresee problem ahead of occurrence. Therefore action can be taken before such a circumstance arises.

In an ever-changing and complex environment, controlling forms an integral part of the organization.

Advantages of controlling

Saves time and energy

Allows managers to concentrate on important tasks. This allows better utilization of the managerial resource.

Helps in timely corrective action to be taken by the manager.

Managers can delegate tasks so routinely chores can be completed by subordinates.

On the contrary, controlling suffers from the constraint that the organization has no control over external factors. It can turn out to be a costly affair, especially for small companies.