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:
- 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.
- 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.
- 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.
- 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).
- 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.
- 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:
- Daily or Routine Reports:
Track
daily tasks and operations to ensure continuous supervision.
- Budgetary Control:
This
involves comparing actual financial performance with the budgeted figures. It
helps manage expenses and allocate resources wisely.
- Operating Ratios:
Performance
efficiency is evaluated using ratios.
Example:
Operating Ratio = (Operating Expenses × 100) / Gross Profit
- Cost Audit:
This
is a specialized technique to verify cost accounts and examine expenditure
trends. It helps in identifying and eliminating wastage.
- Periodic Review Reports:
Evaluations
conducted on a monthly, quarterly, or annual basis to assess long-term goals
and strategy implementation.
- Occasional or Special Control:
Used
during emergencies or special circumstances, such as quality breakdowns or
labor disputes.
- Policy Control:
Ensures
that work is done in accordance with established organizational policies and
rules.
- Bureaucratic Control:
Relies
on strict rules, procedures, and a clear hierarchy of authority.
- Output or Result-Based Control:
Instead
of monitoring activities, the focus is on outcomes and results. Widely used in
sales and production.
- 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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