You are on page 1of 14

Controlling

• Controlling is a main function of management.


• Actual performance is compared with
standard with a purpose to find deviation
and thereafter corrective action are taken to
fix such deviation.
• For example : For the month of Dec
Sales target=10 lakh
Actual sale achieved =8 lakh
Deviation= 2lakh
• The top level management makes plan and
policies and implements them to achieve the
organization goals.
• The control function is the process of evaluating
the actual performance comparing with the
planned targets and take corrective actions
whenever it is necessary.
• Proper monitoring and control are necessary for
the effective performance.
• If the performance is not in accordance with
planned ones.
Nature /Characteristic of Controlling
1. Controlling is a Fundamental Management
Function-
There are many functions of management like
planning, organizing, staffing, directing and
controlling. Out of all these functions, controlling
is the most important. If controlling is excluded,
all other functions of management are rendered
meaningless.
2. Goal oriented activity-
All the controlling activities aim at achieving
the predetermined objectives. So, it is goal
oriented activity
3. Continuous process- Controlling is a continuous
process. It continues till the organization exits.
4. Persuasive process-
• every organization (Profit ,non profit organization
,govt or non govt org, small organization and larger
organization etc)
• every level of management
Control is exercised at all level of management ,so it
is persuasive process.
5. Both Backward and Forward looking-
In control, the past event are reviewed and the
corrective measures are taken with respect to future
activities.
6.Dynamic activity- A change in the controlling
activities takes place with the change in business
environment. so, controlling is an dynamic process.
Both
Backward
and
Forward
looking
Goal
Persuasive
oriented
process
activity

Nature of
Controlling
Controlling
is a
Fundament Dynamic
al activity
Manageme
nt Function
Continuous
process
Steps/Elements or Process of
controlling
• The Controlling process is a five step process
of establishment of standards, measurement
of performance, comparison of actual and
standard performance ,Analysis of deviation
& taking remedial actions.

• Controlling process is a continuous and


ongoing dynamic process in management of
the organization.
Steps/Elements or Process of
controlling

Taking
Remedial
Analysis of /corrective
deviation Actions.
Comparison
of Actual and
Measurement Standard
of Performance
Establishment Performance
of Standards
Establishing Standards
• Standards are the targets against with actual performance
is compare.
• It is first step of controlling process.
• These standard are establish on the basis of objectives
,policies and programs laid down in planning.
• These standard should xbe simple ,precise and easy to
understand.
Standards are two types:
Quantitative standard Qualitative standard
eg- Sales targets customer satisfaction
production targets employee satisfaction
Measurement of performance
• In this step of process of control, actual performance of
various department are measured.
• Every department prepare performance report.
• Measurements should be related to standards set
in the first step of control process

• For example- Sale department prepare the


performance report for the month of October. Where
the evaluate the actual sales performance of the first
week of october than 2 week and so on.
Comparison of actual and standard
performance
• After measuring the performance next step is to
compare the actual performance with the standard
performance.
• This help in finding the deviation.

Deviation can be positive and negative.


Positive deviation means when the actual
performance is better than standard .
Negative deviation means when the actual
performance is less than the standard.
Analysis of deviation
• In case any deviation is found while comparing
the actual performance with the preset
standards, it is thoroughly analyzed.
• Not every type of deviation is analyzed by
organization.
• Minor deviation or deviation which are in
acceptable limited can be ignored.
• For eg-
Sales target=50 lakh
Actual sale=49.8lakh
Deviation =20,000(Minor Deviation)
• Those deviation which are of critical nature
should be immediately focused.

• Only those deviation should be communicated


to higher level of Mgt which are of exceptional
nature.
• This is also known as “Management by
Exception “or “Control by Exception”
Taking Corrective action
• Last step of control process is taking corrective
action.
• In this step, new plans are made and
implemented for future. So that deviation can
be fix/remove and organizational objective
can be achieved.