Controlling

Controlling

 Controlling consists of verifying whether

everything occurs in conformities with the plans
adopted, instructions issued and principles
established.
 Controlling ensures that there is effective and
efficient utilization of organizational resources
so as to achieve the planned goals.
 Controlling measures the deviation of actual
performance from the standard performance,
discovers the causes of such deviations and
helps in taking corrective actions
Definitions of Controlling

 According to Brech, “Controlling is a systematic

exercise which is called as a process of checking
actual performance against the standards or
plans with a view to ensure adequate progress
and also recording such experience as is gained
as a contribution to possible future needs.”
 According to Donnell, “Just as a navigator
continually takes reading to ensure whether he is
relative to a planned action, so should a business
manager continually take reading to assure
himself that his enterprise is on right course.”
Features of Controlling Function

 Controlling is an end function

 Controlling is a pervasive function
 Controlling is forward looking-
 Controlling is a dynamic process
 Controlling is related with planning
Importance of Control

 Adjustments in Operations.
 Policy Verification.
 Managerial Responsibility.
 Psychological Pressure.
 Coordination in action.
  Organizational Efficiency and Effectiveness.
Stages of Control
 Depending on the stages at which control is exercised,
it may be of three types :
 feed forward control;
 concurrent, real-time, or steering control; and
 feedback control
 (1) control of inputs that are required in an action,
known as feed forward control;
 (2) control at different stages of action process,
known as concurrent, real-time, or steering control;
and
 (3) post-action control based on feedback from the
completed action, known as feedback control
Feed forward Control.
 involves evaluation of inputs and taking corrective action
before a particular sequence of operation is completed.
 to remove the limitations of time lag in taking corrective
action.
 monitors inputs into a process to determine whether the
inputs are as planned. If inputs are not as planned,
corrective action is taken to adjust the inputs according
to the plan so that the desired result are achieved within
the planned inputs.
 It is just like hunting a duck. A hunter will always aim
ahead of a duck’s flight to compensate for the time lag
between a shot and a hoped-for hit.
Feed forward Control.
 To be effective, feed forward control should meet the following
requirements:
 Thorough and careful analysis of the planning and control system
must be made and the more important input variables identified.
 A model of the system should be developed.
 The model should be reviewed regularly to see whether the input
variables identified and their relationship still represent realities.
 Data on input variables must be regularly collected and put into the
system.
 The variations of actual input data from planned inputs must be
regularly assessed, and their impact on expected results is
evaluated.
 Action must be taken to show people problems and the measures
required to solve them.
Concurrent Control:
 is exercised during the operation of a programmed.
 It provides measures for taking corrective action or
making adjustments while the programmed is still
in operation and before any major damage is done.
 In the organizational context, many control
activities are based on this type of control, for
example, quality control during the operation, or
safety check in a factory.
 Here, the focus is on the process itself. Data
provided by this control system is used to adjust
the process.
Feedback Control:
 on the measurement of the results of an action.
 Based on this measurement, if any deviation is found between
performance standard and actual performance, the corrective
action is undertaken.
 The control aims at future action of the similar nature so that
there is conformity between standards and actual.
 This is required because, sometimes, feed forward or concurrent
control is not possible to apply, for example, many personal
characteristics of an individual which go into behavioral process
are not measurable, and hence feed forward control is difficult to
apply.
 In the business organizations, top management control is mostly
based on feedback. To make feedback control effective, it is
essential that corrective action is taken as soon as possible.
Controlling Process

Setting up of (target) standards:

 A standard means target or the yardstick against

which the actual performance is measured. The

standards become basis for comparisons and the
manager insists on following of standards
 Standards must be set up keeping in mind the

resources of the organization and as far as possible

standards must be set up in numerical or measurable
terms.
For example,
i. Standard sale — Rs 20 lakh per annum
ii. Standard profit —Rs 4 lakh
iii. Reduction in cost by 5%.
Measuring of performance:

 After setting up of standards the performance

of the employees is measured by evaluating
the actual work done by the employees. When
the performance can be measured
numerically then it is very convenient to
measure the performance.
Compare performance against standard:

 After measuring the performance the

manager compares the actual performance
with the planned performance and standard.
If there is match in both then the controlling
function ends there only. But if there is
mismatch or deviation then the manager tries
to find out the extent of deviation. If the
deviation is minor then it should be ignored.
But if the deviation is more, then timely
actions must be taken.
Analysing Deviations
All deviations need not be brought to the notice of
top management. A range of deviations should be
established and only cases beyond this range
should be brought to the knowledge of top level
management. They must divide the deviations in
two categories deviations which need to be
attended urgently in one category and minor or
insignificant decisions in other category. These two
categories must be controlled by following ways:
 Critical point control
 Management by exception
Taking corrective measures:

 On comparing the actual performance with

the planned performance, the manager will
come to know about the deviations between
the plan and actual performance. Then the
next step is to know the reasons for such
deviations and trying to remove deviations in
future. The manager takes measures to bring
back everything on the track, i.e., according
to plan.
Feedback in Controlling
The controlling function does not end by taking
corrective action as it is a continuous process.
After suggesting the corrective measure a
feedback report is prepared. Feedback refers to
list of reasons for deviations of plans or for
inefficiency in overall working of organisation;
along with reasons the corrective measures are
also specified in the feedback report and
feedback acts as a base to establish the
standard for next year and controlling process
again starts from 1st step.
Essentials of Effective Control System
 Control by Objectives
 Organization Suitability
 Efficiency
 Flexibility
 Forward Looking
 Human Factor
 Economy
 Simplicity
 Self-control
 Promptness in Reporting Deviations
 Pointing out Exceptions at Critical Points
CAUSES OF RESISTANCE TO CONTROL

 Curb on Freedom.
 Curb on Creativity and Innovation.
 Rigid Control Standards.
 Faulty Evaluation System.
 Fear of Discrimination.
  Against Self-control