Definition: Controlling is a primary goal-oriented function of management in an organisation. It is a process of comparing actual performance with the organisation’s established standards to ensure that activities are being carried out according to plans and, when they are not, taking corrective action.
Each manager must monitor and evaluate the activities of their subordinates. This helps the manager to take corrective action within the specified time frame to avoid unforeseen events or losses to the company.
Control is performed at the lower, middle and upper levels of management.
Features of Controlling
- An effective controlling system has the following characteristics:
- It helps in achieving the company’s goals.
- It enables optimal use of resources.
- It evaluates the accuracy of the standard.
- It also ensures discipline and order.
- It motivates employees and boosts morale.
- Ensures future planning by revising standards.
- Improves the overall performance of an organization.
- It also minimizes errors.
Controlling and planning are interrelated because controlling provides important input for the next planning cycle. Controlling is a backwards-looking function that returns the management cycle to planning. Planning is a forward-looking process because it deals with forecasts of future conditions.
Process of Controlling
The control process includes the following steps,
- Setting standards: This means setting a goal that must be achieved in order to meet the organisation’s objectives.
Standards specify the criteria for performance. Control standards are divided into quantitative and qualitative standards. Quantitative standards are expressed in terms of money. Qualitative standards, on the other hand, include intangible things.
- Measurement of actual performance: the actual performance of the employee is measured against the targets. As management levels increase, measuring performance becomes difficult.
- Comparing actual performance to standard: This involves comparing the degree of variance between actual performance and the standard.
- Taking corrective action: They are initiated by the manager who corrects any deficiencies in the actual performance.
The controlling process thus regulates the company’s activities to ensure that actual performance is in line with the standard plan. An effective controlling system enables managers to avoid circumstances that cause damage to the company.
Types of Controlling
There are three types of control, namely,
- Feedback control: this process involves gathering information about a completed task, evaluating that information, and improving the same type of task in the future.
- Concurrent control: it is also called real-time control. It examines each problem and investigates it to take action before a loss occurs. Example: control chart.
- Predictive/forward control: this type of control helps to anticipate problems before they occur. Therefore, action can be taken before such a circumstance occurs.
In a constantly changing and complex environment, controlling is an integral part of the organization.
Also, Read Top 10 Stock Market Movies Everyone Should Watch
Advantages of Controlling
- Saves time and energy
- Allows managers to focus on important tasks.
- Allows for better use of management resources.
- Helps managers take timely corrective action.
- Managers can delegate tasks so that routine tasks can be completed by subordinates.
Control suffers from the limitation that the organization has no control over external factors. It can prove to be a costly affair, especially for small companies.