Module VI

Module IX
• Controlling (a) Meaning
• (b) Importance of Controlling
• (c) Control Process
• (d) Types of Control
 Learning outcome

Successful organizations have appropriate control

processes in place and students would learn to design

such process to continuously assess the performance of

the business
Controlling

Control is the process of checking to determine whether or

not, proper progress is being made towards the objectives
and goals and acting if necessary to correct the deviations.
Haimann
Controlling is a primary goal-oriented function of
management in an organization. It is a process of comparing
the actual performance with the set standards of the
company to ensure that activities are performed according to
the plans and if not then taking corrective action.
Characteristics of Controlling :

1.Important Management Function:

• It is very essential function of management.
• Control is effected by other functions and in
turn it affects the other functions of
management.
• Every manager has to exercise control
irrespective of the level of his authority and
the nature of job.
2. Continuous Process:
• Control is continuous or regular process.
• Management has to be continuously alert to ensure that
the enterprise is following a right path.
• Management must continuously review and improve upon
the actual performance in order to achieve the
predetermined objectives.
3. Mechanism:
• It is a mechanism according to which something or
somebody is directed to follow the predetermined course.
• In a business enterprise it is the job of a manager to
control performance of work and workers placed under his
charge.
4. Dynamic Process:
• Control is not static but flexible.
• A control system can be effective only when it goes on changing
according to the needs and conditions of the enterprise.
• It includes not only a review of the performance but adjustment
of plans too.
5. Forward-looking:
• Control is forward looking because one can control further
happenings and not the past.
• It seeks to improve future events through past experience.
• A control system is formulated to minimize wastage, losses and
undesirable deviations from the fixed standards.
• Control also helps in innovations and improvements in the set
standards.
6. Action-oriented:
• Control is the corrective action that brings plans and
performance close to each other.
• The whole exercise of managerial process is taken to
arrive at organisational objectives set by the
planning process.
• For the above purpose, actions and further actions
are necessary, each time there may be correction
and change in the actions depending upon the
information provided by control procedure.
 Control
Process

• The control process is a three- step process of

measuring actual performance, comparing actual
performance against a standard, and taking
managerial action to correct deviations or to address
inadequate standards.
• The control process assumes that performance
standards already exist, and they do. They’re the
specific goals created during the planning process.
 Sources of Information for Measuring Performance

• Step 1: Measuring Actual Performance

• To determine what actual performance is, a
manager must first get information about it.
Thus, the first step in control is measuring.
• HOW WE MEASURE Four approaches used by
managers to measure and report actual
performance are personal observations,
statistical reports, oral reports, and written
reports
• Step Comparing Actual
Performance
2: Against the
The comparing step determinesStandard
the
variation between actual performance
and the standard.
• Although variation in
performance
some can be expected in all
activities, it’s critical to determine an
acceptable range of
Deviations outside
attention. variation. this
• Let’s work through anrange example.
need
• Step 3: Taking Managerial Action
• Managers can choose among three possible courses of action: do nothing, correct the
actual performance, or revise the standards. Because “do nothing” is self- explanatory,
let’s look at the other two
• CORRECT ACTUAL PERFORMANCE Sports coaches understand the importance of
correcting actual performance. During a game, they’ll often correct a player’s
actions. But if the problem is recurring or encompasses more than one player,
they’ll devote time during practice before the next game to correcting the actions.
That’s what managers need to do as well.
• One decision a manager must make is whether to take immediate corrective
action, which corrects problems at once to get performance back on track, or to
use basic corrective action, which looks at how and why performance deviated
before correcting the source of deviation.
• REVISE THE STANDARD It’s possible that the variance was a result of an unrealistic
standard—too low or too high a goal. In that situation, the standard needs the
corrective action, not the performance. If performance consistently exceeds the
goal, then a manager should look at whether the goal is too easy and needs to be
raised. On the other hand, managers must be cautious about revising a standard
downward. It’s natural to blame the goal when an employee or a team falls short.
Types
of
Contro
l
 Types of Control

• Feedforward Controls
• Used to anticipate problems before they arise so that
problems do not occur later during the conversion
process

• Giving stringent product specifications to suppliers in

advance
• IT can be used to keep in contact with suppliers and
to monitor their progress 11-
14
 Types of Control
• Concurrent Controls
• Give managers immediate feedback on how
efficiently inputs are being transformed into outputs
• Allows managers to correct problems as they arise

This control can also be referred to as

steering or real-time control. Thus, this
control is associated with adjusting a
performance before any high damage is
done. 11-
15
 Types of Control

• Feedback Controls
• Feedback permits the manager to use the information
about the past performance by bringing the future
performance in line with the objective that is
planned.
• Used to provide information at the output stage
about customers’ reactions to goods and services so
that corrective action can be taken if necessary

11-
16
 Importance of Controlling

Planning
-
Controlli
ng Link
Importance of Control:

1. Efficient Execution of pre-determined plans:

• Control is an important pre-requirement for an

effective and efficient implementation of the pre-
determined plans.
• It assists in determining variations, pinpointing the
factors responsible for them and taking corrective
actions.
2.Helps in Delegation:
• Control can be meaningful only when proper delegation of
authority and duties is done.
• Thus, it promotes delegation of authority to the employees at
lower levels.
• In this way they develop a sense of involvement in the working
of an organisation.
3. Aid to Decentralisation:
• Modern business organisations are inclined towards
decentralisation (disperding decision making authority
throughout the organisation).
• For this management has to keep control in its hand to know
whether the authority is being used properly.
• So, there is a requirement of effective control system.
4. Assists Co-ordination:
• Modern business are organisations are increasing in size. A huge
amount of capital and large number of people are employed in
them.
• These organisations are having many divisions producing and
distributing different products.
• In order to coordinate their activities, an efficient and effective
control system is required.
5. Boosts Morale:
• Control techniques help in finding the deviations and identifying
the factors responsible for that deviation.
• This boosts the morale of the employees because they known the
work for which they are to be held responsible.
6. Simplifies Supervision:
• Control simplifies supervision by pinpointing significant
deviations.
• It keeps the employees under check and brings discipline
among them.
• A good control system detects the weak points very quickly.
This helps the expansion of span of control (wider span of
management) at all levels.
7. Aids to efficiency:
• Control is concerned with ensuring that all the important
factors in the organisation move along the right path with
right speed.
• This increases the efficiency in every aspect of the
organisaion.