What is Controlling in Management Meaning and Process

characteristics of Controlling

Table of Contents:

What is Controlling in Management?

Controlling in management is a function that ensures efficient and effective use of all the available resources. It refers to the systematic process that an organization implements to evaluate its progress in achieving its predetermined goals. Controlling in management process involves monitoring the execution of the plan and correcting any deviations that may arise. The controlling process entails monitoring the execution of the plan and correcting any deviations that may arise. The purpose of control is to ensure that the organization stays on track and achieves its objectives. By controlling function, people can be managed and motivated efficiently and effectively and by leveraging technology and data analytics, managers can achieve optimal results and drive organizational success.

Meaning of Controlling in Management 

Controlling is one of the essential functions of management in every organisation. The controlling function ensures that activities in an organization are performed as per the plans. The management process is incomplete and many times useless without the control function. The control function is concerned with ensuring that planning, organising, staffing, and leading functions result in the attainment of organisational objectives. Controlling refers to the evaluation of performance and the implementation of corrective actions to accomplish organisational objectives. In other words, control is a tool that helps organisation measure and compares their actual progress with their established plan.

According to Henry Fayol, “Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified sit prevented from recurring”

According to EFL Breach, “Control is checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance” 

According to Reeves and Woodward, “Control refers to the task of ensuring that activities are producing the desired results. Controls in this sense are limited to monitoring the outcome of activities, reviewing feedback information about this outcome, and if necessary, taking corrective answers”

Controlling Definition in Management

According to Robert N. Anthony, “Management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of an organisation’s objectives”.

According to H. Koontz and O’Donnell, “Controlling is the measuring and correcting of activities of subordinates to ensure that events conform to plans”.

Effective controls ensure that all work conforms to plans adopted, instructions issued and principles established. It ensures that organisational resources are utilised effectively and efficiently to achieve the planned goals. It measures the deviation of actual performance from the standard performance discovers the causes of such deviations and helps in taking corrective actions.

Process of Controlling in Management

As the figure shows, a typical control system has four major steps:

  1. Set Performance Standards
  2. Measure Performance
  3. Compare
  4. Determine Deviation
  5. Standards
  6. Meets Standards
  7. Take Corrective Action
  8. No
  9. Yes
  10. Reinforce and Continue Work

Figure: Control Process

Step 1: Setting Performance Standards

Every organisation has goals-profitability, innovation, the satisfaction of customers and employees, and so on. A standard refers to the level of expected performance for a given objective.  It is a benchmark that outlines the expected level of efficiency, quality, and effectiveness that must be met to achieve success. Standards are goals that establish desired levels, motivate individuals to achieve their best, and are important in providing benchmarks to assess actual performance. Standards can be set for any activity – operating activities, financial activities, legal compliance, charitable contributions, and so on.

For example, employee goal setting for motivation is built around the concept of specific, measurable performance standards. Such standards should be challenging and should aim for improvement over past performance. Typically, performance standards are derived from job requirements, such as increasing market share by 10 per cent, reducing costs by 20 per cent, and answering customer complaints within 24 hours. But performance standards do not apply just to people in isolation, they frequently reflect the integration of both human and system performance.

Performance standards can be set concerning the following: 

1) Quantity

2) Quality, 

3) Time used, and

4) Cost

Step 2: Measuring Performance –

The second step in the process of controlling is to measure performance levels. For example, managers can count units produced, papers filed, days absent, samples distributed, and dollars earned. Performance data commonly are obtained from three sources: 

1) Written Reports: These include computer printouts and on-screen reports. Thanks to computers’ data-gathering and analysis capabilities and decreasing costs. Both large and small companies can gather huge amounts of performance data.

2) Oral Reports: One common example of oral reports occurs when a salesperson contacts his immediate manager at the close of each business day to report problems, accomplishments, or customers’ reactions during the day.

3) Observation: It is a method of data collection that involves physically visiting the locations where activities are taking place and closely monitoring all the events as they unfold.  The manager can directly observe work methods, employees’ non-verbal signals, and the general operation. Personal observation gives a detailed picture of what is going on, but it also has some disadvantages. It does not provide accurate quantitative data, the information usually is subjective and general.

Step 3: Comparing Performance with the Standard –

The third step in the control process is useful in comparing performance with the standard. In this process, managers assess employee performance. It’s important to note that different activities have varying tolerance levels for deviations from standards. For instance, in many manufacturing processes, significant deviations, like drilling holes that are either too small or too large, are considered unacceptable. On the flip side, in areas like sales and customer satisfaction, falling below target levels is problematic, while exceeding sales targets or surpassing customer expectations signals that employees are delivering better-than-expected results. As a result, managers who perform the oversight must analyse and evaluate the results carefully

The managerial principle of exception states that control is optimized by focusing on significant exceptions or deviations from the expected standard or result.  In essence, when comparing performance with the standard, managers need to direct their attention to the exception. For example, controlling the quality of components produced on an assembly line might show that only 5 pieces per 1,000 fall out of line. To exercise effective control, the manager should investigate these five components – the exceptions – further.

Step 4: Taking Action to Correct Problems and Reinforce Successes

This step ensures that operations are adjusted to achieve desired results or to continue to exceed expectations if the manager deems it possible. An organization by implementing corrective measures, can maintain its course towards success and uphold its commitment to excellence.  In cases in which significant variances are discovered, the manager usually takes vigorous and immediate action.

The selection of corrective action depends on the specific nature of the problem and the issues at hand. The corrective action may involve a shift in marketing strategy (if say, the problem is lower than expected sales), a disciplinary action, a new way to check the accuracy of manufactured parts or a major modification to a process system.

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Characteristics of Controlling in Management 

The following are the main characteristics of control:

  1. Pervasive Function
  2. Control is a Continuous Process
  3. Controlling is an Exercise at all Levels in the Management Hierarchy
  4. Leads to Post-Monem of Past Events
  5. The purpose of Control is positive
  6. Control Guides Behaviour of People and Use of Resources and Facilities
  7. Control Measures and Evaluates Performances
  8. Control Facilitates Coping with the Environment
  9. Control is mainly Forwarding Looking
  10. Control Closely Related to Planning

1) Pervasive Function

Control is a pervasive function of management. It is a follow-up action to the other functions of management. This function is performed by all the managers in the organisation to cool the activities assigned to them.

2) Leads to Post-Mortem of Past Events

Control leads to the appraisal of past activities. Thus, it is looking back. The control process serves to reveal any shortfall in the performance of various individuals and departments. This is known as feedback information. It will help in knowing and understanding the reasons for poor performance. Corrective actions can be initiated based on feedback information.

3) Control is a Continuous Process

Control is not a single-step activity. Rather, it is a dynamic process that involves constant analysis of actual and planned performance and the resultant deviations as well as the revision of plans, objectives, policies, procedures, positions, incentives, etc., in the light of such deviations. 

4) Purpose of Control is Positive

According to George Terry, “The function of controlling is positive – is to make things happen, i.e., to achieve the goal within stated constraints or using the planned activities” Control should never be perceived as negative or as a hindrance to achieving objectives. Rather, controlling is an important and necessary managerial function that is a help instead of a hindrance.

5) Controlling is an Exercise at all Levels in the Management Hierarchy

Control is a function of every manager from the chairman and managing director to a supervisor, though it may vary in scope among managers. For example, the top managers are concerned with administrative control, which is exercised through broad plans, policies, and other directives. The middle-level managers are concerned with the executor control to get the plans, policies, and programmes executed. At the lower level. supervisors exercise operational control to ensure the successful performing of actual operations or production activities through their close monitoring.

6) Control Guides the Behaviour of People and Use of Resources and Facilities

Control guides the action and the behaviour of the people who are responsible for carrying out different activities or operation, and also guide the use of them by different organisational resource and facilities to effectively and efficiently contribute towards the accomplishment of objectives.

7) Control Measures and Evaluate Performances

Controlling in management involves measurements of the actual results to facilitate other evaluations or comparisons against the planned results. It also suggests guidelines for future courses of action.

8) Control Facilitates Coping with Environment

An effective controlling system foresees the likely changes in consumer preferences and demands and therefore guides the members of the organisation to modify the products or services to meet the anticipated needs and requirements of the consumers in the future market.

9) Control is mainly Forwarding Looking

Control mainly aims at the future because the future is ahead and the past is gone. However, the experience about the criterion for future standards, it may be noted that control may also be passed control and current control. Thus, it is not fully correct to say that control is looking back.

10) Control Closely Related to Planning

Planning is the basis of controlling. Control implies the existence of certain standards or yardsticks against which actual results are to be evaluated. Planning provides such standards, if there is no plan; it means that there is no basis for control. It sets the course of action and controlling in management monitors the operation or activities to follow such course of action. Planning to initiate the process of management and control completes this process. Without a plan, control is blind because it does not know where to go and whether it is going on the right path or not.

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