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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