What is Controlling?
The controlling function of management includes verifying adherence to plans, instructions, and established principles, and ensuring efficient resource utilization to achieve goals. It involves measuring deviations from standards, identifying causes, and implementing corrective actions.
Controlling is integral to organizational success, serving as an end function post-task completion. It operates at all management levels and relies on past performance for future adjustments.
Controlling is closely interlinked with planning, reinforcing planning efforts and facilitating continuous improvement. In dynamic environments, controlling is crucial in addressing deviations and informing future planning decisions.
Objectives of Controlling
The following are the five key objectives of controlling in business:
Ensuring Goal Achievement
Controlling aims to verify whether actual performance aligns with planned objectives. By comparing actual outcomes with predetermined goals, managers ensure progress toward organizational targets.
Optimal Resource Utilization
Controlling seeks to ensure the effective and efficient utilization of organizational resources. Through monitoring and evaluation, managers ensure resources such as finances, materials, and manpower are utilized optimally to maximize productivity and minimize waste.
Performance Improvement
It involves identifying deviations from standards and taking corrective actions to improve performance. By analyzing discrepancies, managers can identify areas for improvement and implement strategies to enhance efficiency and effectiveness.
Risk Management
Controlling aims to identify and mitigate risks that may affect organizational objectives. Through monitoring and analysis, managers can anticipate potential risks and implement measures to minimize their impact on operations.
Facilitating Decision-making
Controlling provides managers with reliable data and feedback to support decision-making processes. By evaluating performance against standards, managers can make informed decisions to address issues, allocate resources effectively, and steer the organization toward its goals.
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Features of Controlling
Let’s explore the six key characteristics of controlling:
Dynamic Process
Controlling is a dynamic process that requires ongoing monitoring and adjustments. Managers must adapt their control mechanisms to changing circumstances and take timely corrective actions as necessary.
End Function
It occurs after tasks are completed, allowing managers to assess performance against established standards. It serves as a means of evaluating outcomes and taking corrective measures for future improvement.
Pervasive Function
It is pervasive, occurring at all levels of management and across all functional areas of an organization. It ensures accountability and performance evaluation throughout the organization’s hierarchy.
Forward-looking
It is future-oriented, focusing on anticipating and preventing deviations before they occur. By analyzing past performance and current trends, managers can proactively address potential issues and guide the organization toward its goals.
Read More: Directing in Management
Interconnected with Planning
Controlling and planning are closely interconnected functions of management. Effective planning provides the basis for setting standards while controlling ensures that plans are implemented and deviations are corrected.
Multifaceted Function
It encompasses various types of control mechanisms, including feedback control, feedforward control, and concurrent control. It involves a combination of monitoring, evaluation, and corrective actions tailored to the specific needs and objectives of the organization.
Process of Controlling
The effective controlling process includes the following five steps:
- Establishment of Standards: Standards are benchmarks or targets set to guide performance evaluation. They can be tangible (measurable) or intangible (non-measurable).
- Measurement of Performance: Performance is measured against established standards to assess deviations. Measurement may involve quantitative data (e.g., output, costs) or qualitative factors (e.g., employee attitudes).
- Comparison of Actual vs. Standard Performance: Actual performance is compared to the predetermined standards to determine deviations. Deviations can be positive (better than expected), negative (below standard), or within acceptable limits.
- Identification of Causes: Managers analyze the reasons behind performance deviations. Understanding the root causes helps in formulating effective corrective actions.
- Taking Corrective Actions: Based on the analysis of deviations and their causes, managers implement corrective measures. Actions may involve revising plans, reallocating resources, providing training, or improving processes.
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Importance of Controlling
Controlling holds significant importance in the management process for several reasons:
Motivating Employees
Controlling ensures that employees are guided and supported throughout their tasks, fostering a sense of responsibility and dedication. Clear goals and performance standards motivate employees to work towards achieving organizational objectives.
Efficient Resource Utilization
Effective control ensures optimal utilization of resources such as finances, materials, and manpower. By monitoring resource usage, management can identify inefficiencies and take corrective actions to minimize waste and maximize productivity.
Discipline Establishment
It instills discipline within the organization by enforcing adherence to established procedures and standards. It creates accountability among employees and prevents deviations from organizational goals, maintaining order and consistency in operations.
Read More: Staffing in Management
Coordination of Actions
In complex organizational structures, controlling facilitates coordination among different departments and individuals. By aligning actions towards common objectives, controlling ensures synergy and minimizes conflicts, leading to smoother workflow and improved efficiency.
Setting Standards
It aids in setting realistic performance standards based on past experiences, market conditions, and organizational capabilities. These standards serve as benchmarks for evaluating performance and guiding future actions, enabling the organization to strive for continuous improvement.
Goal Achievement
Ultimately, controlling contributes to the achievement of organizational goals by monitoring progress and taking corrective measures as necessary. By keeping performance aligned with objectives, controlling ensures that the organization stays on track toward success and sustains competitive advantage in the long run.
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Frequently Asked Questions (FAQs)
What is the purpose of controlling in management?
Controlling ensures that organizational activities are aligned with plans and standards, allowing managers to monitor performance, identify deviations, and take corrective actions to achieve desired goals effectively.
How does controlling differ from other management functions?
Controlling focuses on evaluating performance against predetermined standards and taking corrective actions, while other functions like planning, organizing, and leading involve setting objectives, allocating resources, and guiding employees.
What are the types of control used in organizations?
Organizations employ various types of control, including feedback control, concurrent control, feedforward control, steering control, yes/no control, budgetary control, operational control, strategic control, and objectives control, depending on the nature of the tasks and objectives.
Why is controlling considered a dynamic process?
Controlling is dynamic because it involves continuous monitoring, analysis, and adjustment of activities based on changing circumstances and deviations from standards, ensuring that the organization remains adaptable and responsive to evolving conditions.
How does controlling contribute to organizational success?
Controlling helps in optimizing resource utilization, maintaining discipline, fostering coordination, setting standards, and ultimately, achieving organizational goals by ensuring that performance remains aligned with objectives and deviations are addressed promptly.
What are the challenges of implementing effective controlling?
Challenges in controlling may include resistance to change, inadequate performance metrics, lack of timely and accurate data, managerial biases, and the need to balance control with employee empowerment and innovation to foster a positive organizational culture.
Sujan Chaudhary holds a Bachelor in Business Administration (BBA) degree and is currently pursuing an MBA degree. He loves to share his business knowledge with the rest of the world.