Controlling

In Management
 What is Controlling?
• Control is a primary goal-oriented function
of management in an organization. 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.
What is Controlling?
• 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.
What is Controlling?
• 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.
 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.
• Con-current 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.
TYPES OF CONTROL

• Predictive / feedforward control: This

type of control helps to foresee
problem ahead of occurrence.
Therefore, action can be taken before
such a circumstance arises.
WHY CONTROLLING IS IMPORTANT?
• Accomplishing Organizational Goals:
The controlling process is implemented to take
care of the plans. With the help of controlling,
deviations are immediately detected and
corrective action is taken. Therefore, the difference
between the expected results and the actual
results is reduced to the minimum. In this way,
controlling is helpful in achieving the goals of the
organization.
 WHY CONTROLLING IS IMPORTANT?
• Judging Accuracy of Standards:
While performing the function of controlling, a
manager compares the actual work performance with
the standards. He tries to find out whether the laid
down standards are not more or less than the general
standards. In case of need, they are redefined
 WHY CONTROLLING IS IMPORTANT?

• Making Efficient Use of Resources:

Controlling makes it possible to use human and
physical resources efficiently. Under controlling, it
is ensured that no employee deliberately delays his
work performance. In the same way, wastage in all
the physical resources is checked.
 Improving Employee Motivation:

• Through the medium of controlling, an effort is

made to motivate the employees. The
implementation of controlling makes all the
employees to work with complete dedication
because they know that their work performance will
be evaluated and if the progress report is
satisfactory, they will have their identity established
in the organization.
• Ensuring Order and Discipline:
• Controlling ensures order and discipline.
With its implementation, all the
undesirable activities like theft,
corruption, delay in work and
uncooperative attitude are checked.
• Facilitating Coordination in Action:
Coordination among all the departments of the
organization is necessary in order to achieve the
organizational objectives successfully. All the
departments of the organization are interdependent.
For example, the supply of orders by the sales
department depends on the production of goods by the
production department.
4 Steps of Control Process are:
• Establishing standards and methods for
measuring performance.
• Measuring the performance.
• Determining whether performance matches
the standard.
• Taking corrective action.
4 Steps of Control Process
Establishing Standards and Methods for Measuring
Performance

• Standards are, by definition, simply the

criteria of performance.
• They are the selected points in an entire
planning program at which performance
is measured so that managers can receive
signals about how things are going and
thus do not have to watch every step in
the execution of plans.
• Standard elements form precisely worded
Determining whether Performance Matches the
Standard

• It is an easy but important step in the control

process. It involves comparing the measured
results with the standards already set.
• If performance matches the standard,
managers may assume that “everything is
under control”. In such a case the managers
do not have to intervene in the
organization’s operations.
  
Taking Corrective Action

• This step becomes essential if performance falls

short of standards and the analysis indicates that
corrective action is required. The corrective action
could involve a change in one or more activities
of the organization’s
• If performance matches the standard,
managers may assume that “everything
is under control”. In such a case the
managers do not have to intervene in
the organization’s operations.
Determining whether Performance
Matches the Standard

• It is an easy but important step in the control

process. It involves comparing the measured
results with the standards already set.
Taking Corrective Action
• This step becomes essential if performance falls
short of standards and the analysis indicates that
corrective action is required. The corrective action
could involve a change in one or more activities of
the organization’s operations
 CHARACTERISTIC OF AN EFFECTIVE
CONTROL SYSTEM
• Accuracy: Effective controls generate
accurate data and information. Accurate
information is essential for effective
managerial decisions. Inaccurate controls
would divert management efforts and energies
on problems that do not exist or have a low
priority and would fail to alert managers to
serious problems that do require attention.
 Timeliness:

• There are many problems that require

immediate attention. If information
about such problems does not reach
management in a timely manner, then
such information may become useless
and damage may occur. Accordingly,
controls must ensure that
 Flexibility:

• The business and economic environment is

highly dynamic in nature. Technological changes
occur very fast. A rigid control system would not
be suitable for a changing environment. These
changes highlight the need for flexibility in
planning as well as in control.
 Flexibility:
• Strategic planning must allow for
adjustments for unanticipated threats
and opportunities. Similarly, managers
must make modifications in controlling
methods, techniques and systems as
they become necessary. An effective
control system is one that can be
updated quickly as the need arises.
Acceptability:
• Controls should be such that all people
who are affected by it are able to
understand them fully and accept
them. A control system that is difficult
to understand can cause unnecessary
mistakes and frustration and may be
resented by workers.
 Economic feasibility:
• The cost of a control system must be balanced
against its benefits. The system must be
economically feasible and reasonable to operate.
For example, a high security system to safeguard
nuclear secrets may be justified but the same
system to safeguard office supplies in a store
would not be economically justified. Accordingly
the benefits received must outweigh the cost of
implementing a control system.
Strategic placement:

• Effective controls should be placed and

emphasized at such critical and strategic
control points where failures cannot be
tolerated and where time and money costs of
failures are greatest.
 Corrective action:
• An effective control system not only checks for
and identifies deviation but also is programmed
to suggest solutions to correct such a deviation.
For example, a computer keeping a record of
inventories can be programmed to establish “if-
then” guidelines. For example, if inventory of a
particular item drops below five percent of
maximum inventory at hand, then the computer
will signal for replenishment for such items.
 Emphasis on exception:

• A good system of control should work on the

exception principle, so that only important deviations
are brought to the attention of management, In
other words, management does not have to bother
with activities that are running smoothly. This will
ensure that managerial attention is directed towards
error and not towards conformity. This would
eliminate unnecessary and uneconomic supervision,
marginally beneficial reporting and a waste of
managerial time.
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