nature and process of controlling

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NATURE AND PROCESS OF

CONTROLLING

Prepared By: Deepti Bindal


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Meaning of Controlling

Controlling is the basic managerialfunction. It is the process of ensuring theactual activities confined to plannedactivity. It is an essential function for alllevels of management. It ensures theright things are done in the right mannerat right time. Each and everyorganization set the goals. All activitiesare directed towards the goals.Controlling is defined as a measurementof Actual performance and expected

performance and taking correctiveaction.


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According to E.F.L. Brech Controlling is a

systematic exercise which is called as a

process of checking actual performanceagainst the standards or plans with a view to

ensuring adequate progress or satisfactory

performance.


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According to Koontz and ODonnellcontrolling is the measurement and

correction of the performance of

subordinates to make sure that theenterprise objectives and plans

devised to attain them are being

accomplished.


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Features of Controlling

Function

1. Controlling is an end function- A functionwhich comes once the performances

are made in conformities with plans.2. Controlling is a pervasive function-

which means it is performed bymanagers at

all levels and in all type of concerns.3. Controlling is forward looking- because

effective control is not possible withoutpast being controlled. Controlling always

looks to future so that follow-up can bemade whenever required.


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4. Controlling is a dynamic process- sincecontrolling requires taking reviewable

methods, changes have to be made whereverpossible.

5. Controlling is related with planning- Planningand Controlling are two inseparable functionsof management. Without planning, controllingis a

meaningless exercise and without controlling,planning is useless. Planning presupposescontrolling and controlling succeeds planning

6. Controlling is a continuous process: itinvolves continuous measurement and reviewof actual performance and results.correctiveaction is based on this review.it may lead to

changes in planning,organizing,staffing etc.


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Importance of controlling

1. Execution of plans- control helps in ensuringthe performance of plans through regularexamination and evaluation of performanceof work that results the performance ofactivities for accomplishment of goals.

2. Helps in supervision- control helps inreducing deviation between standardperformance and actual performance througheffective control system established by the

supervisor3. Effective delegation and decentralization ofauthority Controlling is that mechanismwhich monitor about authority issued that canhelp to delegate and decentralize the

authority


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4. Reduction of cost- when control is effectiveemployees will have better performance,proper utilization of resources and prevention

of leakage and wastage which helps inreduction of cost

5. Psychological pressure controlling affectsthe psychological pressure of employees.

When the employees know that theirperformance and activities done will beevaluated and just than they naturally workhard and their performance will be increased.

6. Optimum utilization of resources-controlling plays a vital role for properutilization of human, physical, and financialresources to ensure correct workperformance with respect to cost, quality and

time or not.


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7. Helps in fulfillment of goals- control provide

standard for approval of actual performance

it helps to accomplish the plan and achieve

goals.8. Helps in coordination- an organization

grows in size and diversity. They become

complex and also have to develop various

department and units. Therefore, controllinghelp to establish the coordination in

different department and units.


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Process of Controlling

1. Establishing or setting standards- the firststep of controlling is to set standard againstwhich results can be measured. Standards

are the plans or the targets which have to

be achieved in the course of business

function. They can also be called as the

criterions for judging the performance.

Standards can be e pressed in q alitati e as


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Standards can be expressed in qualitative aswell as qualitative terms. The quantitative are

physical standard, cost and revenue

standards, capital standards etc. the

qualitative standards are related to employees

morale, motivation, relations between superior

and subordinates and public etc. quantitative

standard should be flexible.


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2. Measuring actual performance- in this step,actual performance of employees, group or

units is measure. A manager should examineactual performance on the basis of givenstandard which is definite set of work assignedto definite employees different techniques can

be used to measure the actual performance. Inconvenience of manager, he develops betterinformation system to measure the actualperformance. Finding out deviations becomeseasy through measuring the actualperformance. Performance levels aresometimes easy to measure and sometimesdifficult. Actual performance measurementsystem should be a regular and constant basis

so that it can provide reliable and regular


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3. Comparing actual performance withstandard- Comparison of actual

performance with the planned targets isvery important. Deviation can be definedas the gap between actual performance

and the planned targets. The manager

hasto find out two things here- extent ofdeviation and cause of deviation. Extentof

deviation means that the manager has tofind out whether the deviation is positiveor negative or whether the actual

performance is in conformity with theplannederformance.


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4. Taking corrective actions- after comparingactual performance with the standard, if anydeviation is detected, and then correctiveactions should be taken and initiated. Ifperformance does not meet the standard, it isduty of manager to take corrective action andfurther help the organization to overcome anydifficulty. The corrective action may be relatedto

a. Revision of standard if they seem to beunattainable

b. Revision of strategies, policies and

proceduresc. Additional employees training

d. Greater motivation

e. Change in the existing technique of

direction


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Relation between Planning

and Controlling

Planning and controlling are two separatefunctions of management, yet they are

closely related. The scope of activities ifboth is overlapping to each other.Without the

basis of planning, controlling activitiesbecomes baseless and without

controlling,planning becomes a meaningless

exercise. In absence of controlling, nopurpose can be

served by. Therefore, planning and


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1. Planning precedes controlling and controlling succeedsplanning.

2. Planning and controlling are inseparable functions of

management.

3. Activities are put on rails by planning and they are kept at

right place through controlling.

4. The process of planning and controlling works on Systems

Approach which is as follows :

Planning Results Corrective Action


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5. Planning and controlling are integral

parts of an organization as both are

important for smooth running of anenterprise.

6. Planning and controlling reinforce

each other. Each drives the otherfunction of

management.


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Essentials of Effective Control

1. Suitability- the control system shouldbe appropriate to the nature and needsof various activities to serve the specificarea or department of the organization

2. Timely and forward looking- controlsystem in the management of theorganization should be used to evaluatethe deviations timely and take correctivemeasures in time.

3. Simplicity- effective control systemshould be very simple and easy tounderstand by the concerned managerand subordinates.


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4. Economy- the controlling system shouldbe very economic and less costly. The

benefits should be more than that ofactual expenditure related to thecommon goal

5. Objectives- the control system should

be objective in order to specify theexpected result in definite terms in termsof personal likes and dislikes ofmanager, subordinates and otherinformation users etc.

6. Flexibility- every organization operatesbusiness in a dynamic environment.Controlling system should ne flexible sothat it could be adjusted in every

environment

limitations of Managerial


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limitations of Managerial

Control:


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nature and process of controlling

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