CHAPTER VII

CONTROLLING

7.1. MEANING AND NEED FOR CONTROL

In the series of managerial functions, planning is the first function and controlling is the last.
Success in business is very often proportionate to the astuteness of its planning and the skill with
which it is controlled. Plans can be effectively achieved in most organizations only with good
controls, and planning is always pre-requisite for controlling. Planning seeks to set goals and
programs and control seek to secure performance in accordance with plans.

Definition
a) According to Koontze and O'donnell,, "The managerial function of control is the
measurement and correction of the performance of activities of subordinates in order to make
sure that enterprise objectives and the plans devised to attain them are being accomplished.
It's thus the function of every manager, from the chief executive to the Forman."
b) "Controlling is the process by which management sees if what did happen was what was
supposed to happen. If not, necessary adjustments are made." Moore.

An analysis of the foregoing statements regarding control brings out the controlling function of
management.

i) Planning is the foundation of control:

Planning sets the course, control observes deviations from the course, and takes corrective action.

ii) Action's the essence of control:

Control terminates in taking corrective action where there is a deviation in performance from the
desired goals.
iii) Delegation is the key to control:
Control is exercised by taking action, and action can be taken within the authority delegated.
Accountability must be within the authority given to the manager.

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iv) Information is the guide to control:
Control exercised by a manager on the basis of the information and reports from those actively
doing the job. Such reports and information may be described as "feed-back" from subordinates.
Feedback enables the manager to determine how far the operations.
7.2 THE CONTROL PROCESS
In controlling process there are three steps,

1. Setting standards
2. Measurement of performance
3. Taking corrective action
1) Setting Standards:
Standards may be tangible or intangible. Greater emphasis should be laid on tangible standards.
The standards in tangible terms may be in terms of output, costs, profit, time persons available
for training etc. intangible terms standards may be for the results to be expected from a training
program, employee morale, advertising campaign, etc.

Organizations create standards to help measure and monitor both productivity and quality efforts.
People and processes are governed by qualitative and quantitative standards. An organization
uses these standards to teach, train, and evaluate organizational performance.

2) Measurement of Performance and comparing it against standards

An organization measures actual performance of people and processes to ascertain if they are
functioning according to plans and expectations. After it has been measured it will be compared
against the established standards.
3) Taking Corrective Actions
As soon as the deviations are reported, it is the duty of the manager concerned to take steps to
correct the past action or at least to bring similar action closer to the standards in future. When
significant deviations from established standards occur, the organization must determine the
cause by identifying the nature and scope of the problem

7.3 TYPES OF CONTROLLING

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Controlling can be feed forward, concurrent or feedback controls.

1. Feed forward controls are preventive in nature. They are created to screen out possible
causes of problems. Procedures and training can be preventive as well as remedial.
2. Concurrent controls monitor ongoing operations as they occur in real time, allowing for
instant reactions and the spotting of trends.
3. Feedback controls are after action controls. Inspecting output after an operation has been
performed and soliciting customer feedback are examples of after-action control.
All the three types of controls are important to managers and their organizations. When designed
and used properly, they can prevent, identify, and correct deviations from established standards.

7.4 CONTROL CHARACTERISTICS

Control may have many different characteristics, but the most important are these:

1. Acceptance by members of the organization: acceptance by the organization’s members

is crucial to a controls effectiveness and efficiency. Controls will not work unless people
want them to
2. Focus on critical points: critical control points for the total enterprise would include
such as sales, revenue, expense, inventory levels, personnel turnover, safety for people
and other assets, and more
3. Economic feasibility: the cost of the control or a control system must be weighed against
the benefits it can return
4. Accuracy: information must be accurate if it is to be useful. Controls that offer inaccurate
assessments feed decision makers the wrong input which then results in incorrect
responses.
5. Timeliness: timely information must be given to those in charge if meaningful responses
are to follow.
6. Ease of understanding; the simpler the control, the easier it will be to understand and
apply.

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7.5 MAKING CONTROL SYSTEM EFFECTIVE

Controls are effective as long as they

1. Do what they are intended for- prevent deviations, diagnose deviations, treat deviations,
or provide information for future planning, and
2. Do not create organizational problems that result in costs greater than the benefits of the
control devices.