Controlling

Definition, Nature & Features

By: Rajat Jhingan

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By: Rajat Jhingan

Controlling
Control is the process of comparing actual performance with established standards, for the purpose of taking actions to correct deviations. The basic purpose of a well designed control system is to ensure that results are achieved according to plan.

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It is making something happen the way it was planned to happen. It involves keeping the organizational activities and functions on the right track and aligned with plans and goals.

It is said that like a ships rudder, controlling keeps the organization moving in the proper direction.

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Features of Control
Positive force The primary objective of control is to find where failures are occurring, who is responsible for them and what should be done about them. It is, thus, a positive force, aimed at securing performance.

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Continuous Just as the navigator continually takes readings to ascertain where he is, relative to a planned course, so should the business manager continually take readings to assure himself that his enterprise or department is on course.

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Controlling
Forward looking Control involves a post mortem examination of past events with a view to improve performance in future. Control does not wait till the train gets derailed, it seeks to prevent the train going off the track.

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Universal Control is a primary function of every manager. It has to be undertaken at every level. Dynamic Control is a dynamic process in the sense that it is amenable to change, and hence, highly flexible.

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Controlling
Goal oriented Control guides activities (along desired lines) towards predetermined goals. The primary focus of control is on achieving results, checking deviations, if any, and initiating timely remedial steps.

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Planning based Control is based on planning. A system of control presupposes the existence of certain standards, which are determined in the process of planning. Planning is useful only when there is effective control. Planning without control is meaningless.

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Controlling
Controlling, however, has its own limitations. An enterprise has very little control over external influences. Employees, too, do not like to be watched from close quarters and offer resistance when the control system is too tight and rigid.

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Further, its easy to control certain functions but not so easy to control other functions. Many areas defy measurement in quantitative terms.

Controlling
The Control Process

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By: Rajat Jhingan

Controlling
The Control Process

Step 1: Establishment of standards

The first step in the control process is establishing standards. Standards are the targets against which subsequent performance will be compared.

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Controlling
They are, by definition, simply criteria of performance. They serve as the benchmarks because they specify acceptable levels of performance. Standards could be either quantitative or qualitative.

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Controlling
Quantitative standards are generally expressed in physical or monetary terms. Such standards are typically set up in respect of production, finance, sales etc. Quantitative standards could be based on time, cost, productivity, or revenue.

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By: Rajat Jhingan

Controlling
Qualitative standards, on the other hand, are based on the level of perfection desired in respect of certain intangible items such as goodwill, employee morale, industrial relations, customer satisfaction etc.

Such standards are difficult to be measured directly and precisely.

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Controlling
Step 2: Measurement performance of actual
The second step in control process is the measurement of actual performance. Here, the actual performance of employee is measured against the standard fixed for his job.

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Where standards are expressed in numerical terms, measurement does not create problems. E.g.; in production, finance or sales. However, where standards are expressed in qualitative terms, measurement becomes difficult. E.g.; in HR, Customer Care etc.

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Controlling
Generally speaking, the measurement of performance is more difficult at the higher levels of management. Measurement can be done directly through personal observation or indirectly through regular reports (oral or written).

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Controlling
Step 3: Comparison of actual performance with standard
In the third step of controlling process, actual performance is compared with the standard.
It helps to determine the degree of variation between actual performance and the standard.

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By: Rajat Jhingan

Controlling
Some variation in the performance can be expected in all the activities. It is important at this stage to determine the acceptable range of variation. Deviations in excess of this range become significant and receive managers attention.

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By: Rajat Jhingan

Controlling
Step 4: Taking corrective action
The last and final step in the control process is taking corrective action, when required. Corrective steps are initiated by managers with a view to rectify the defects in actual performance.

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Controlling
Corrective action may include a whole range of activities, such as, changing the strategy, methodology, rules, compensation practices, redesign of jobs, replacement of personnel, reestablishment of budgets and even redefining the standard itself.

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Types of Control

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Types of Control
Feedback Control It is the process of gathering information about a completed activity, evaluating that information and taking steps to improve similar activities in the future.

It is a post mortem examination of events, the purpose of which is to improve performance in future.

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Controlling
Concurrent Control Concurrent control consists of monitoring ongoing activities to ensure they are consistent with standards. It is also known as real time control. The navigator of an aircraft who adjusts the aircrafts movements is an example of concurrent control.

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Feed forward Control Here, the control system anticipates problems that the management encounters in future. Cash budget is an example of this type where the finance manager is in a position to estimate the next years flow of cash.

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Controlling
It is, thus, a more aggressive, proactive approach to control, allowing corrective action to be taken ahead of the occurrence of the problem. This type of control is also known as predictive control since it attempts to anticipate problems in advance of their occurrence.

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Controlling
In a large, multi-product, multi-plant and multilocation organization, it is not possible to check everything and initiate timely, remedial steps wherever things go off the track.

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By: Rajat Jhingan

Controlling
Managers, therefore, focus attention on key or critical areas which have a significant bearing on the performance of the various departments in an organization.

Exercising control in the above said manner is known as critical or strategic point control.

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It puts emphasis on measuring the performance and checking deviations in respect of key result areas which are highly critical to the success of a firm.

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By: Rajat Jhingan

Controlling
Another, modern way to exercise control is by controlling only those things which are unusual or exceptional. This type of control is known as management by exception and it tries to focus attention on exceptionally serious deviations from the plans and standards.

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By: Rajat Jhingan

Controlling
In management by exception, the managers intervene only when asked by the subordinates for their intervention or when they find a serious deviation from the plans and standards.

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By: Rajat Jhingan

Controlling
The intensity and type of control depends on a variety of factors, such as, the nature of the task, the competence of the personnel, the level of management, and the management philosophy etc.