What is Controlling in Management?
Control simply refers to the process of assessing and modifying performance for ensuring that the company’s objectives and plans for attaining them are met. It is a process aimed at bringing conformity of performance with planned action. The process of control implies the measurement of accomplishments against pre-set standards and the correction of deviations for ensuring the attainment of objectives as per the plans. It cannot avoid deviations in planned and actual performance; however, the deviations can be minimized via taking corrective actions and decisions that can reduce their reoccurrence. Control is an important component of the management process, and the entire management will become obsolete in the absence of control process. This is because businesses won’t be able to know how their plans are working properly toward desired goals when they are fully implemented.
Every business organization carries out its activities for attaining some goals, and it is a must to ensure that all activities are performed in accordance with desired goals. It is the controlling function of management that helps organizations in ensuring the same. Overall, it can be said that the control process is the system that allows for setting, measuring, matching, and tweaking any business operations such as production, packaging, delivery, and many more to assuring that the right things are getting done in the right manner at right time.
Definition of Controlling in Management
Managerial Control implies the measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans.Koontz and O’ Donnel
Steps in Control Process in Management
The process of controlling comprises of 5 essential steps that are as follows:
- Setting performance standards
- Measuring actual performance against set standards
- Comparison of actual performance with standards
- Analyzing the deviations
- Taking corrective actions
Setting performance standards
The first step in the control process involves setting up performance standards. These standards serve as the basis for the measurement of actual performance. Performance standards are like the lighthouse that warns and guide ships at sea. These are benchmarks towards which the overall efforts of a business organization are directed. Such standards can be expressed in both quantitative as well as qualitative terms. Examples of quantitative standards are revenue to be earned, product units to be manufactured and sold, cost to be spent, etc., and examples of qualitative standards are enhancing goodwill, improving product quality, improving labor relations, etc.
Every business organization should clearly explain its standards to employees and must set attainable, understandable, and realistic standards that can be achieved. Besides this, the organizations operate in a business environment that is dynamic in nature and keeps on changing. Therefore, the established standards should be flexible in nature such that they carry a scope of change whenever there are changes in a business environment.
Measurement of actual performance against set standards
The second step after the establishment of standards is a measurement of actual performance. The actual performance of a business organization can be measured via distinct techniques such as sample checking, personal observation, performance reports, etc. However, for making the comparison easy, the performance should be measured in the same units in which the standards are fixed. The comparison of performance helps in identifying if plans are actually working as they were supposed to be.
Generally, the actual performance is measured at the end of the performance. However, in some scenarios, organizations do measure actual performance throughout the performance. For example, a company dealing with electric appliances can check the parts prior to assembling them together for making sure that the final product is not defective. Also, while doing the measurement, both quantitative and qualitative aspects should be taken into the consideration. Sometimes organizations pay more attention to quantitative aspects as compared to qualitative aspects which can be much more harmful to them. Like for example, a quantitative standard of lowering the cost of the product can be achieved by degrading its quality. This can surely bring down the product cost but can lose the customers of the organization due to quality issues.
Comparison of actual performance with standards
The third step in the control process involves a comparison of the organization’s actual performance with the established standards. It is an important step as helps in the easy identification of deviations via doing a comparison of actual performance with performance standards. When the standards are expressed in quantitative terms, it becomes quite easy for businesses to perform comparisons as there is no involvement of subjective evaluation. For example, an organization can easily do a comparison of the number of units sold in a month against the set standard. However, the comparison in between the set standard for employee motivation with its actual performance is difficult.
Analyzing the deviations
The actual performance and set standards of business organizations rarely match with one another. Generally, there is always some variations in actual and expected performance. Therefore, the fourth step involves analysis of deviations. For doing so, the organizations must set an acceptable range of deviations in performance. In addition to this, more focus should be made by business towards the significant deviations as compared to minor deviations. For this, the business managers usually employ two approaches: Critical point control and Management by exception. Once the major deviations are identified by organizations, it need to analyse its causes that can be due to unrealistic standards, faulty processes, business environment, etc. Therefore, it is must for organizations to know the exact cause of deviation so that right corrective measures can be taken for the same.
Taking corrective actions
The last and final step of the control process involves taking corrective actions. If deviations are within acceptable limits set by managers, then there is no requirement of taking corrective actions. However, in case, if deviations go beyond the set acceptable limit in key areas, then immediate managerial actions are needed. The defects in actual performance can easily be rectified by the organization by taking corrective steps.
For example, if deviations in performance are due to a lack of resources, then managers will try to procure resources for meeting the standards. But if deviations arise due to the lack of employee skills, then managers might provide proper training and guidance to employees. This means that every deviation does not require the same corrective action. The rule, process, or method of corrective action varies with the requirement of deviation.
Importance of Controlling
Accomplishing Organisational Goals
Controlling helps the company to achieve the goals of the organisation and brings to light the deviations. Controlling guides the organization and keeps it on the right track so that organizational goals might be achieved.
Improve Employees Motivation
Controlling ensures predetermined tasks what work should be done when should be done and by whom it should be done. it does not create any chaos. It motivates them and helps them to give better performance.
Controlling helps to reduce the risk of the business. Controlling has predecided tasks for everyone. So, everyone knows there duties. it reduces the risk of losing anything in business.
Identify Managerial Weakness
Planning is future and Controlling is present. When the managers make plans, they consider future. But when controlling starts it gives real feedback to the managers about how planning is existing.