Controlling involves comparison of actual performance with the planned performance.

If there is
any difference or deviation, then finding the reasons for such difference and taking corrective
measures or action to stop those reasons so that they don‘t re-occur in future and that
organizational objectives are fulfilled efficiently.

Importance of Controlling
1. Controlling helps in achieving organizational goals: The controlling function
measures progress towards the organizational goals and brings to light/indicates
corrective action.
2. For Evaluating/Judging accuracy of standards: A good control system enables
management to verify whether the standards set are accurate or not by careful check on
the changes taking place in the organizational environment.
3. Making efficient use of resources: By the process of control, a manager seeks to reduce
wastage of resources.
4. Improves employees motivation: A good control system ensures that employees know
well in advance what they are expected to do & also the standard of performance. It thus
motivates & helps them to give better performance.
5. Facilitating Coordination in action: In controlling each department and employee is
governed by predetermined standards which are well coordinated with one another.
Control provides unity of direction.
6. Ensuring order and discipline: Controlling creates an atmosphere of order and
discipline in the organization by keeping a close check on the activities of its employees.

Nature of Controlling/Features of
Controlling
1. Goal oriented: Controlling is directed towards accomplishment of organizational goals
in the best possible manner.

2. Pervasive: Controlling is an essential function of every manager and exercised at all

levels of management.

3. Continuous: It is not an activity to be pursued in the end only; it has to be done on a

continous basis.

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4. Controlling is looking back: Controlling involves measurement of actual performance
and its comparison with the desired performance. It is the process of checking and
verification.

5. Controlling is forward looking: It is related to future because it seeks to improve

future results on the basis of experience gained in the past.

6. Depends on planning: It pre supposes existence of planning because without planning

no control is possible.

7. Action oriented*: Control has no meaning if no corrective action is taken; So timely

action should be taken to prevent deviations.

8. Primary Function of Management* – controlling is performed at all levels and in all

types of organizations.

9. Brings back management cycle back to planning:* Control should not be viewed as
the last function. In fact it links back to planning. Controlling involves

• Comparing actual performance with standards • Finding out deviations •

Taking corrective action so that they don‘t repeat in future These are the
guidelines when future planning is done. Thus controlling not only completes
one cycle of management process and also helps to improve planning in the
next cycle.

Relationship between Planning and

Controlling
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Planning and controlling are inter-related to each other. Planning sets the goals for the organization
and controlling ensures their accomplishment. Planning decides the control process and controlling
provides sound basis for planning. In reality planning and controlling are both dependent on each
other. In the words of M.C. Niles, “Control is an aspect and projection of planning, where as planning
sets the course, control observes deviations from the course, and initiates action to return to the
chosen course or to an appropriately changed one.”

The relationship between planning and control can be explained as follows:

1. Planning Originates Controlling:

In planning the objectives or targets are set in order to achieve these targets control process is
needed. So planning precedes control.

2. Controlling Sustains Planning:

Controlling directs the course of planning. Controlling spots the areas where planning is required.

3. Controlling Provides Information for Planning:

In controlling the actual performance is compared to the standards set and records the deviations,
if any. The information collected for exercising control is used for planning also.

4. Planning and Controlling are Interrelated:

Planning is the first function of management. The other functions like organizing, staffing, directing
etc. are organized for implementing plans. Control records the actual performance and compares it
with standards set. In case the performance is less than that of standards set then deviations are
ascertained. Proper corrective measures are taken to improve the performance in future. Planning
is the first function and control is the last one. Both are dependent upon each other.

5. Planning and Control are Forward Looking:

Planning and control are concerned with the future activities of the business. Planning is always for
future and control is also forward looking. No one can control the past, it is the future which can be
controlled. Planning and controlling are concerned with the achievement of business goals. Their
combined efforts are to reach maximum output with minimum of cost. Both systematic planning
and organized controls are essential to achieve the organizational goals.

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

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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 system of comparison between performance and standard should be
maintained. This 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

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LIMITATIONS OF CONTROLLING
1. Difficulty in setting quantitative standards: Control system loses some of its
effectiveness

when standards cannot be quantified.

2. Little control on external factors: An organisation cannot control external factors such
as

government policies, technological changes, competition etc.

3. Resistance from employees: Mostly employees resist controlling by managers.

4. Costly affair: Control is a costly process as it involves a lot of expenditure, time and effort

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