Controlling

  • Post last modified:3 March 2022
  • Reading time:27 mins read

What is Controlling?

Controlling is the process of comparing actual performance with standards and taking necessary corrective action. The focus of the control system may include feed forward-control to prevent problems; concurrent control to monitor on-going activities and feedback control to evaluate last-performance. While incorporating controls at various levels, employee reactions must, also kept in mind.

Raghuveer’s Dilemma

Raghuveer Desai is the supervisor of an engineering firm in Pune. The morale in his office was quite low, recently. The workers went back to a 9- 5 work schedule after being on flexi time for nearly two years. When the directive came down allowing Raghuveer to place his office on flexi time, he spelled out the rules carefully to his people.

All the employees were to work during the core period from 10 a.m. to 2 p.m. However, they could workthe rest of the eight-hour day at any time between 6a.m. and 6p.m. Raghuveer believed his workers were honest and well-motivated, so he did not bother to setup any system of control.

Everything went along well for a long time. The morale was high and all the work seemed to be done.

In November, 2010 the chief factory manager found that Raghuveer?s workers were averaging seven hours a day. Two employees had been working only during the core period for more than two months. When Raghuveer?s departmental head received the factory manager?s report, he told Raghuveer to return-the office to regular working hours.

Raghuveer was upset and disappointed with his people. He had trusted them and felt they had let him down.

What did Raghuveer fail to understand about the controlling process?

Control is the process of comparing actual performance with established standards for taking action to correct deviations. Planning organizing, coordinating and directing are only preparatory steps for getting the work done; it is only through the process of control that management is able to maintain the “equilibrium between ends and means, output an effort.”

It is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organization?s objectives (Robin Anthony), a properly designed system of control alerts managers of the existence of potential problems and allows them to take corrective actions, when necessary.

The basic purpose of a well-designed control system ensures that results are achieved according to plan. Control is not just score keeping. It is not just plotting the course and getting locations report. It is, rather, steering the ship.


Meaning of Controlling

Controlling means implementation of a decision method and the use of feedback so that the goals and specific strategic plans of the firm are optimally obtained. To do this, managers study accounting and other reports and compare them to the plans set earlier.

These comparisons may show where operations are not proceeding as planned and who is responsible for what. The feedback that management receives may suggest the need to re-plan, to set new strategies or to reshape the organizational structure.

Fig 2.1 Controlling

Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance discovers the causes of such deviations and helps in taking corrective actions.

According to Brech, “Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs.”

According to Donnell, “Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course”.

Controlling has got two basic purposes:

  • It facilitates Co-ordination
  • It helps in planning

Features of Controlling

A careful exam of the above definitions reveals the following features of controlling

Control is a Positive Force

The primary object of control is to find where failures are occurring, who is responsible for them and what should be done about them. It is thus a positive force, aimed at securing performance. Just like a thermostat in a refrigerator control automatically begins to operate whenever deviations occur. It is a constructive activity designed to check deviations and improve performance.

Controls Continuous Process

It is not a one-step action plan. As pointed by the navigator continually takes readings to ascertain where he is, relative to a planned course, so should the business manager continually take readings to assure him that his enterprise or department is on course.”

Control is Forward Looking

Control involves a postmortem examination of past events; it is often viewed negatively, as a policing or watchdog kind of job. The whole exercised of looking back is meant to improve performance in future, as past cannot be controlled.

Control Process is Universal

Control is a primary function of every manager. It has to be undertaken at every level. Managers at every level have to check deviations from standards; set things right quickly and keep the business on course. The, process of management is incomplete without controlling.

Control Process is Dynamic

Control is not static; it is dynamic in the sense, it is amenable to change and hence, highly flexible. Between the times a goal is established and the time it is reached, many things can happen in the organization and its environment to disrupt movement toward the goal or even to change goal itself. “A properly designed control system can help managers anticipate, monitor and respond to changing circumstances.”

Control is Goal-Oriented

Control guides activities (along desired lines) towards predetermined goals. The primary focus is on achieving results, checking deviations, if any and initiating timely remedial steps. Control, thus, is not an end in itself but only a means to achieve predetermined goals.

Delegation is the Key to Control

A manager gets authority to use resources and achieve results through delegation. Without such authority, a manager may not be in a position to take effective rectification steps in time. In addition, it should be remembered here, to put activities along right paths; a manager requires enough authority so that he can control anything and everything under his jurisdiction.

Control is based on Planning

A system or control presupposes the existence of certain standards. The plans provide the standards of performance, which serve as the basis of control. Thus, planning and control are closely related to each other. Once plans are made, control is unnecessary to measure the progress of work. Planning is useful only when there is effective control. Planning without control is meaningless.


Importance of Control

Control is an essential part of every organization. The management process is incomplete and sometimes, meaningless without control function. Targets remain on paper, people tend to use resources recklessly and managers find everything chaotic.

The absence of control could be very costly and unproductive. A good system of control, however, puts an end to all of these and offers the following advantages:

Achievement of Goals

Controlling is a goal-oriented process. It keeps activities on the right track. Whenever things go off the rails, remedial steps are undertaken immediately. Every attempt is made to confirm events, to set targets and thereby achieve results efficiently and effectively.

Execution and Revision of Plans

It is through controlling that appropriate steps are taken to ensure that each plan is implemented in a predetermined way. Controlling measures progress, uncovers deviations, indicates corrective steps and thus, keeps everything on track.

Of course, when conditions change dramatically, controlling helps to review, revise and update the plan. It offers valuable feedback information, reveals shortcomings in plans and thereby helps in preparing other plans for future use.

Brings Order and Discipline

In an organization, while pursuing goals managers and their subordinates often commit mistakes. For example, problems are diagnosed incorrectly, lesser quality inputs are ordered, wrong products are introduced, and poor designs are followed.

A control system helps check such tendencies before they turn into serious problems. It has a healthy impact on the behavior of subordinates. They become cautious while discharging their duties since they are aware (that their actions are observed at every stage).

Facilitates Decentralization of Authority

When managers delegate work to lower levels, they must also ensure that the subordinates do not deviate from a predetermined course of action. A system of control ensures this by forcing subordinates to conform to plans.

The feedback information helps managers check whether actions taken at lower levels are in line with what has been planned or not. It helps to measure progress, check deviations and adjust operations from time to time.

Promotes Co-ordination

Control facilitates Co-ordination between different departments and divisions by providing them unity of direction. Individuals and their activities are tied to a set of common objectives. Such a unified focus ensures accomplishment of results, efficiently and effectively.

Cope with Uncertainty and Change

The environment in which organizations operate is complex and ever changing. New products emerge, innovations come up and new regulations are passed and so on. The organization needs to keep a watchful eye on such developments and respond intelligently.

A control system helps in checking whether the diversified product lines are giving healthy margins, the sales from each region are improving, the products are accepted in the market place or not.

Constant monitoring of key areas helps management encase opportunities that are thrown open from time to time. Timely actions can also be initiated to prevent mistakes from becoming serious threats.


The Control Process

The process of control involves the following steps:

Fig 2.2 Control Process

Establishment of Standards

The first step in the control process is establishing standards. Standards are the targets against which subsequent performances will be compared. They are, by definition, simply criteria of performance. They serve as the benchmarks because they specify acceptable levels of performance.

It is found that laying of standards for every operation is an unpreventable work which is performed by the management such as:

  • In the initial phase of setting standards, it is the work of an executive to study about various characteristics related to work.
  • It is the work of executive to consider simple flexible and normally accepting levels of good performance in case of work characteristics.
  • On differing with amount of work related to operations, it is seen that the characteristics differs along with standards.
  • It is found that there are set standards that depends on characteristics of particular task.

Measurement of actual performance

Another step in control process is measurement of actual performance where actual performance of employees is measured in terms of fixed standards as per his job. Also, measuring performance of a personnel manager at the same time is difficult. To make the checking process effective, the manager has to concentrate on three key aspects of measurement, viz., completeness, objectivity and responsiveness.

Completeness Complete measures provide an opportunity for the manager to concentrate on all aspects of the job instead of neglecting unmeasured tasks in favor of measured ones.

Objectivity

Objective measures avoid bias that is essentially found in subjective assessment of task and people.

Responsiveness

Responsive measures support the belief that effort and performance lead to improvement in the systems of control.

These three types of measurement are equally important for all jobs in organizations.

Fig 2.3 Measurement, Feedback and Adjustment during Performance

Comparison of actual performance with standard

The comparing step determines the degree of variation between actual performance and the standard. Some variation in performance can be expected in all activities. It is, therefore, important to determine the acceptable range of variation. Deviations in excess of this range become significant and receive manager?s attention.

All such deviations may be due to errors in planning, defective implementation or careless performance of the operatives. As a matter of fact, only major or exceptional deviations should be communicated to top management in the form of reports. This is known as,management by exception.

Taking corrective action

The last and final step in the control process is taking corrective action, when required. Corrective steps are initiated by managers with a view to rectify the defects in actual performance. If actual performance for example- falls short of standards due to non-availability of materials, managers try to procure these materials and thus set things in order.

If it is due to poor results shown by employees, it could be rectified through the introduction of attractive incentive plans. Thus, a corrective action may involve a change in methods, rules, procedures, etc. Sometimes, variations might occur due to unrealistic standards. That is, the goal may be too high or too low. In such cases, managers try to set things in order by revising the standards altogether.

Corrective action, as mentioned above, includes the change in strategy, structure, compensation practices, training program mes, redesign of jobs, replacement of personnel, re-establishment of budgets or standards, etc.


Characteristics of an Effective Control System

Effective control systems have certain characteristics. For a control system to be effective, it must be:

Accurate

Information on performance must be accurate. Evaluating the accuracy of the information they receive is one of the most important control tasks that managers face.

Timely

Information must be collected, routed and evaluated quickly if action is to be taken in time to produce improvements.

Objective and Comprehensible

The information in a control system should be understandable and be seen as objective by the individuals who use it. A difficult-to understand control system will cause unnecessary mistakes and confusion or frustration among employees.

Focused on Strategic Control Points

The control system should be focused on those areas where deviations from the standards are most likely to take place or where deviations would lead to the greatest harm.

Economically Realistic

The cost of implementing a control system should be less than or at most equal to, the benefits derived from the control system.

Organizational Realistic

The control system has to be compatible with organizational realities and all standards for performance must be realistic.

Coordinated with the Organizations Work Flow

Control information needs to be coordinated with the flow of work through the organization for two reasons: (1) each step in the work process may affect the success or failure of the entire operation,
(2) the control information must get to all the people who need to receive it.

Flexible

Controls must have flexibility built into them so that the organizations can react quickly to overcome adverse changes or to take advantage of new opportunities.

Prescriptive and Operational

Control systems ought to indicate, upon the detection of the deviation from standards, what corrective action should be taken.

Accepted by Organization Members: For a control system to be accepted by organization members, the controls must be related to meaningful and accepted goals.

These characteristics can be applied to controls at all levels of the organization


Types of Control

Management can implement controls before an activity commences, while the activity is going on or after the activity has been completed. The three respective types of control based on timing are feed forward, concurrent and feedback.

Feed forward Control

Feed forward control focuses on the regulation of inputs (human, material and financial resources that flow into the organization) to ensure that they meet the standards necessary for the transformation process. Feed forward controls are desirable because they allow management to prevent problems rather than having to cure them later. Unfortunately,

these controls require timely and accurate information that is often difficult to develop. Feed forward control also is sometimes called preliminary control, precontrol, preventive control or steering control However,

some authors use term “steering control” to separate the types of control. These types of controls are designed to detect deviation some standard or goal to allow correction to be made before a particular sequence of actions is completed.

Concurrent Control

Concurrent control takes place while an activity is in progress. It involves the regulation of on-going activities that are part of transformation process to ensure that they conform to organizational standards. Concurrent control is designed to ensure that employee work activities produce the correct results.

Since concurrent control involves regulating on-going tasks, it requires a thorough understanding of the specific tasks involved and their relationship to the desired product. Concurrent control sometimes is called screening or yes-no control, because it often involves checkpoints at which determinations are made about whether to continue progress, take corrective action or stop work altogether on products or services.

Feedback Control

This type of control focuses on the outputs of the organization after transformation is complete. Sometimes called post action or output control, fulfills a number of important functions. For one thing, it often` is used when feed forward and concurrent controls are not feasible or are too costly. Sometimes, feedback is the only viable type of control available.

Moreover, feedback has two advantages over feed forward and concurrent control. First, feedback provides managers with meaningful information on how effective its planning effort was.

If feedback indicates little variance between standard and actual performance, this is evidence that planning was generally on target. If the deviation is great, a manager can use this information when formulating new plans to make them more effective. Second, feedback control can enhance employee?s motivation.

The major drawback of this type of control is that, the time the manager has the information and if there is significant problem the damage is already done. But for many activities, feedback control fulfills a number of important functions.


What Is Controlling?

Controlling is the process of comparing actual performance with standards and taking necessary corrective action. The focus of the control system may include feed forward-control to prevent problems; concurrent control to monitor on-going activities and feedback control to evaluate last-performance. While incorporating controls at various levels, employee reactions must, also kept in mind.

Meaning of Controlling?

Controlling means implementation of a decision method and the use of feedback so that the goals and specific strategic plans of the firm are optimally obtained. To do this, managers study accounting and other reports and compare them to the plans set earlier.

What Is Features of Controlling?

The primary object of control is to find where failures are occurring, who is responsible for them and what should be done about them. It is thus a positive force, aimed at securing performance. Just like a thermostat in a refrigerator control automatically begins to operate whenever deviations occur. It is a constructive activity designed to check deviations and improve perform

Types of Control?

Management can implement controls before an activity commences, while the activity is going on or after the activity has been completed. The three respective types of control based on timing are feed forward, concurrent and feedback.

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