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Thursday, 28 August 2025

9. Controlling in Management: Meaning, Principles, Process, and Control Techniques

9. Controlling in Management

Definition, Process, Principles, and Techniques of Control

Introduction

Controlling is one of the fundamental functions of management. It ensures that all organizational activities are executed as per the predefined plans and standards. Through control, a manager monitors and evaluates performance, compares it with the established benchmarks, and takes corrective action whenever deviations occur. It acts as a guiding and corrective mechanism that helps the organization stay on the path toward achieving its objectives.

In essence, controlling can be described as:

"The function of ensuring that actual performance matches planned performance, despite constraints and uncertainties in the environment."

Control is not merely about supervision or inspection—it is about maintaining balance and direction in the execution of plans. It creates a vital link between planning and actual implementation by ensuring that the resources are used efficiently and objectives are met effectively.

Meaning and Importance of Controlling

Controlling refers to the systematic process through which an organization ensures that all its activities are aligned with the established goals. It identifies deviations from the set targets and takes appropriate measures to correct them. This function is crucial because even the best plans can fail if their implementation is not continuously monitored and adjusted as needed.

Key objectives of controlling include:

  • Ensuring compliance with standards
  • Enhancing efficiency and effectiveness
  • Minimizing wastage and errors
  • Supporting decision-making
  • Facilitating coordination between departments

Controlling is applicable at all levels of management and in all areas—production, finance, human resources, and marketing.

Process of Controlling

The control process is systematic and continuous. It consists of the following main steps:

  1. Setting Performance Standards

Standards act as benchmarks against which actual performance is measured. These may be expressed in quantitative terms (e.g., output units, costs, deadlines) or qualitative terms (e.g., service quality, customer satisfaction).
Example: A target of producing 10,000 units per month.

  1. Execution of Activities

The planned operations are carried out as per the defined procedures. Execution must follow the guidelines and standards that have been set during the planning phase.

  1. Measurement of Actual Performance

Actual results are collected through observation, records, reports, feedback, or audits. This measurement must be accurate and timely to ensure relevance.
Example: Monthly production reports, sales figures, attendance records.

  1. Comparison with Standards

The actual performance is compared with the set standards to find any variations or gaps. The deviation could be positive (performance exceeds standards) or negative (performance falls short).

  1. Analysis of Deviations

All deviations are analyzed to find their root causes. This may involve studying procedures, systems, or even personnel-related factors. Some deviations may be acceptable (due to external factors), while others may require intervention.

  1. Taking Corrective Action

If performance is not up to the mark, corrective actions are initiated to bring it back on track. These actions may involve modifying processes, providing training, improving supervision, or updating the standards.

Principles of Effective Control

An effective control system is based on the following principles:

  • Alignment with Objectives: Control must be directly linked to organizational goals and objectives.
  • Focus on Key Areas: Control should target critical areas that influence overall performance (Key Result Areas).
  • Clarity in Standards: Standards should be clear, measurable, and understandable by those who must meet them.
  • Timeliness: Control systems must provide timely information to facilitate prompt corrective action.
  • Flexibility: Controls should be adaptable to changes in the internal and external environment.
  • Responsibility Assignment: Each manager and employee should know what they are responsible for.
  • Cost-effectiveness: The benefits of control should outweigh the cost of implementing it.
  • Corrective Orientation: Control is meaningful only when it leads to improvement.
  • Motivational Impact: Good control systems promote accountability and self-discipline among employees.
  • Forward-looking: Controls should help anticipate and prevent future problems.

Techniques and Methods of Control

Managers employ a variety of techniques depending on the nature of the activity and the level of control required:

  1. Daily or Routine Reports:

Track daily tasks and operations to ensure continuous supervision.

  1. Budgetary Control:

This involves comparing actual financial performance with the budgeted figures. It helps manage expenses and allocate resources wisely.

  1. Operating Ratios:

Performance efficiency is evaluated using ratios.
Example:
Operating Ratio = (Operating Expenses × 100) / Gross Profit

  1. Cost Audit:

This is a specialized technique to verify cost accounts and examine expenditure trends. It helps in identifying and eliminating wastage.

  1. Periodic Review Reports:

Evaluations conducted on a monthly, quarterly, or annual basis to assess long-term goals and strategy implementation.

  1. Occasional or Special Control:

Used during emergencies or special circumstances, such as quality breakdowns or labor disputes.

  1. Policy Control:

Ensures that work is done in accordance with established organizational policies and rules.

  1. Bureaucratic Control:

Relies on strict rules, procedures, and a clear hierarchy of authority.

  1. Output or Result-Based Control:

Instead of monitoring activities, the focus is on outcomes and results. Widely used in sales and production.

  1. Statistical Quality Control (SQC):

A technique used in manufacturing to ensure quality through statistical sampling.

Conclusion

Controlling is much more than just supervision or checking errors. It is the steering function of management, guiding the organization through complexity and uncertainty toward its destination. A sound control system helps transform theoretical plans into real, measurable outcomes.

"Control is the steering wheel of management—it ensures that the organization stays on course and reaches its intended destination."

An effective control mechanism enhances the performance of individuals and teams, ensures optimal resource use, boosts motivation, and lays the foundation for sustained organizational success.

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