Process of Controlling

Controlling as a management function involves following steps:

1. Establishment of standards- Standards are the plans or the targets which have to be achieved
in the course of business function. They can also be called as the criterions for judging the
performance. Standards generally are classified into two-
a. Measurable or tangible - Those standards which can be measured and expressed are
called as measurable standards. They can be in form of cost, output, expenditure, time,
profit, etc.
b. Non-measurable or intangible- There are standards which cannot be measured
monetarily. For example- performance of a manager, deviation of workers, their attitudes
towards a concern. These are called as intangible standards.

Controlling becomes easy through establishment of these standards because controlling is

exercised on the basis of these standards.

2. Measurement of performance- The second major step in controlling is to measure the

performance. Finding out deviations becomes easy through measuring the actual performance.
Performance levels are sometimes easy to measure and sometimes difficult. Measurement of
tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative
measurement becomes difficult when performance of manager has to be measured. Performance
of a manager cannot be measured in quantities. It can be measured only by-
a. Attitude of the workers,
b. Their morale to work,
c. The development in the attitudes regarding the physical environment, and
d. Their communication with the superiors.

It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.

3. Comparison of actual and standard performance- Comparison of actual performance with the

planned targets is very important. Deviation can be defined as the gap between actual
performance and the planned targets. The manager has to find out two things here- extent of
deviation and cause of deviation. Extent of deviation means that the manager has to find out
whether the deviation is positive or negative or whether the actual performance is in conformity
with the planned performance. The managers have to exercise control by exception. He has to
find out those deviations which are critical and important for business. Minor deviations have to
be ignored. Major deviations like replacement of machinery, appointment of workers, quality of
raw material, rate of profits, etc. should be looked upon consciously. Therefore it is said, “ If a
manager controls everything, he ends up controlling nothing.” For example, if stationery charges
increase by a minor 5 to 10%, it can be called as a minor deviation. On the other hand, if monthly
production decreases continuously, it is called as major deviation.

Once the deviation is identified, a manager has to think about various cause which has led to
deviation. The causes can be-

a. Erroneous planning,
b. Co-ordination loosens,
c. Implementation of plans is defective, and
d. Supervision and communication is ineffective, etc.
4. Taking remedial actions- Once the causes and extent of deviations are known, the manager
has to detect those errors and take remedial measures for it. There are two alternatives here-
a. Taking corrective measures for deviations which have occurred; and
b. After taking the corrective measures, if the actual performance is not in conformity with
plans, the manager can revise the targets. It is here the controlling process comes to an
end. Follow up is an important step because it is only through taking corrective
measures, a manager can exercise controlling.
 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 viz.,
1. Feedback Control: This process involves collecting information about a
finished task, assessing that information and improvising the same type of
tasks in the future.
2. 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.
3. 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.
Control Process
Controlling is one of the most important functions of management. Its
main objective is to ensure that an organization’s activities are
advancing as planned. The control process that all managers have to
implement consists of several steps. Each one of these is equally
important and plays a big role in effective management.

Control Process
The control process of management ensures that every activity of
a business is furthering its goals. This process basically helps managers
in evaluating their organization’s performance. By using it effectively,
they can decide whether to change their plans or continue with them as
they are.
The control process consists of the following basic elements and steps:

1. Establishing goals and standards

The task of fixing goals and standards takes place while planning but it
plays a big role in controlling also. This is because the main aim of
controlling is to direct a business’s actions towards its goals. If the
members of an organization know their goals clearly, they will invest
their entire focus in achieving them.

It is very important for managers to communicate their organization’s

goals, standards and objectives as clearly as possible. There must never
be ambiguities amongst employees in this regard. If everybody works
towards common goals, it becomes easier for an organization to
flourish.

The goals that managers have to set and work towards may be either
tangible/specific or intangible/abstract. Tangible goals are those which
are easy to quantify in numerical terms. For example, achievement of
sales worth Rs. 100 crores within one year is a tangible goal.
On the other hand, intangible goals are those which are not quantifiable
numerically. For example, a company may aim to win some prestigious
award for its corporate social responsibility activities.

2. Measuring actual performance against goals and standards

Once managers know what their goals are, they should next measure
their actual performance and compare. This step basically helps them in
knowing whether their plans are working as intended.

After implementing a plan, managers have to constantly monitor and

evaluate them. They must always be ready to take corrective measures
if things are not working properly. In order to do this, they should keep
comparing their actual performance with their ultimate goals.

Apart from taking corrective action, this step of process control also
helps managers in predicting future problems. This way they can take
measures immediately and save their business from losses.

In order to compare their actual performance, managers first have to

measure it. They can do so by measuring results in monetary terms,
seeking customer feedback, appointing financial experts, etc. This can
often become difficult if managers want to measure intangible standards
like industrial relations, market reputation, etc.
 (source – utah ATV trails)

3. Taking corrective action

In case there are discrepancies between actual performances and goals,
managers need to take corrective actions immediately. Timely
corrective actions can reduce losses as well as prevent them from
arising in the future again.

Sometimes, business organizations formulate default corrective actions

in the form of policies. This, however, can be difficult to do when it
comes to complicated problems.

In such cases, managers need to first quantify the defect and prepare a
course of action to remedy it. Sometimes, they may have to take
extraordinary measures for unpredictable problems.

4. Following up on corrective action

Just taking corrective measures is not enough; managers must also take
them to their logical conclusion. Even this step requires thorough
evaluations and comparisons.
Managers should stick to the problem until they solve it. If they refer it
to a subordinate, they must stay around and see to it that he completes
the task. They may even mentor him personally so that he may be able
to solve such problems by himself later.