CONTROLLING

• definition and nature of management

• the link between planning and controlling
•control methods and system
•application of management control in accounting
 controlling
• Management function of controlling is the process whereby
organization sets itself performance objectives and strives to
achieve them as best it can over time. It is a method for
managing the performance of the organization. It is the process
oriented to verify the advancement status of the planned
objectives as well as the efficacy and efficiency of the
organization through the analysis of the resources, costs and
proceeds.
• Controlling is one of the important functions of management. It
pinpoints the deviations on the basis of which management can
take corrective actions. Without the function of controlling,
work done in the organization is not systematic and as per
plans, since the inefficiencies remain undetected.
Definition and nature of management control

• The ability of managers to make an

organization work as they want it to, and the
methods that they use the power that
someone has to manage a company as they
wish, for example because they own more
shares in it than anyone else.
• A management control system is a set of administrative procedures
through which one group of people in an organisation intentionally
influence or affect the behaviour of another group. If it is effective, it
will ensure that the top management policy decisions are put into
practice at the level of operations. The design of such a system is a
complicated affair— much more so than the systems of operational
control which we have already examined. This is because a
management control system seeks to control the behaviour of people,
and these people are in turn attempting to control the behaviour of
others. The word ‘control’ should not be taken to imply a negative kind
of control, an oppressive kind. In many cases, the goal of the control
system is to help a manager do his own planning and thinking more
effectively, so that he becomes able to do things he could not
previously do at all, which is not only useful to the organisation but a
source of great satisfaction to the man or woman involved.
 Link between planning and controlling
• Planning and controlling are two separate fuctions of
management, yet they are closely related. The scope
of activities if both are overlapping to each other.
Without the basis of planning, controlling activities
becomes baseless and without controlling, planning
becomes a meaningless exercise. In absense of
controlling, no purpose can be served by. Therefore,
planning and controlling reinforce each other.
According to Billy Goetz, " Relationship between the
two can be summarized in the following points
• Planning preceeds controlling and controlling succeeds
planning.
• Planning and controlling are inseperable functions of
management.
• Activities are put on rails by planning and they are kept at
right place through controlling.
• The process of planning and controlling works on Systems
Approach which is as follows
:Planning    →    Results    →    Corrective Action
• Planning and controlling are integral parts of an organization
as both are important for smooth running of an enterprise.
• Planning and controlling reinforce each other. Each drives the
other function of management
 Control methods and system
• Type # 1. Non-Quantitative Methods of Control:
• Non-quantitative methods of control are those
which are used by managers in performing other
managerial functions, viz., planning, organising,
staffing and leading (directing). In general, these
lead to control of overall performance of an
organisation. Most of these techniques are
directed towards controlling employees’
attitudes and performance.
• Type # 2. Quantitative Control Techniques:
• These techniques are based on specific data
and quantitative methods to measure and
correct the quantity and quality of output.
• Type # 3. Using Budgets and Budgetary Control:

• The primary financial control for every organisation is the budget. The budget is
the most widely used technique of control in both business and government. A
budget is both a plan and a control inasmuch as the preparation of budgets is an
integral part of the planning process and the budget itself is the end point of the
planning process, that is, the statement of plans.
• In fact, some managers even refer to their budgetary controls as profit plans.
• A budget is an estimate of income or expenses for a specific time period (say, a
year, a quarter, or a month); and the particular estimates it contains become the
standards against which future performances will be measured and evaluated.
• If revenues (income) drop, expenditures should probably be curtailed. On the
contrary, if actual expenditures exceed the expected figures, either additional
revenue must be generated or expenditures have to be reduced.
• Budgets usually require input from those whose activities will be funded and
they, in turn, will control the budgets. Grassroots budgeting asks each manager
to project his(her) unit’s need for funds in specific categories — such as wages, 
 Application of management control in
accounting and marketing
• Accounting is the process of record keeping
for all financial transactions conducted by a
business or organization. The kind of
accounting a company employs in its financial
reporting depends on the kind of company it is
as well as its financial needs.