Controlling means validating if the activities occurring are in confirmation with the actual plans prepared and accepted, instructions issued and principles established. The controlling function also helps in the effective and efficient application of enterprise resources in order to accomplish the planned goals. Controlling gauges the deviation of actual performance from the planned performance, establish the causes of such aberrations and helps in adopting 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. "
The two primary applications of controlling include facilitation of coordination and further helps in planning.
Following are the features of controlling function of management:
It is an end function - A function which occurs after the tasks have been performed and are verified to be in conformities with the initial plans.
It is a pervasive function - which means it is adopted by managers at all hierarchies and in all type of organizations and departments.
It is forward looking - since effective control is not possible without considering past events and their performance, controlling is always forward looking in order to follow-up whenever required.
It is a dynamic process - since controlling necessitates taking corrective measures, changes are made and accepted wherever required.
It is related to planning - Planning and Controlling are two integrated functions of management. Without one, other would be a meaningless exercise. Planning presupposes controlling and controlling succeeds planning.
Establishment of standards
Standards are the benchmarks or the targets which need to be accomplished in the course of operations and execution of the business. They are basically the criterions to judge the performance. Standards may be classified into following-
Measurable or tangible
Standards that be measured and subsequently expressed are called measurable standards. They could be in form of time, cost, output, expenditure, profit, appreciation, growth, market share, user base etc.
Non-measurable or intangible
There standards cannot be measured monetarily. For instance- deviation of workers attitudes, the performance of a manager, etc. These are called as intangible standards.
Controlling is facilitated through the formation of such standards because controlling is practiced only on the basis of such standards.
Measurement of performance
The second main step in controlling is the measurement of performance. Gauging deviations from the planned measures is easier for measurable standards of performance as they can be quantified in units, cost, money terms, etc. However, non-measurable or intangible standards of performance are difficult to gauge.
Qualitative assessment becomes a challenge, especially while the performance of manager needs to be measured. Following are the factors usually considered while measuring manager's performance: workers attitude, morale to work, the development in the attitudes regarding the physical environment, and communication with the superiors.
Comparison of actual and standard performance
Comparing actual performance with the planned standards is critical to any business. The deviation is measured as the identified gap between actual performance and the planned targets. The manager needs to find out both extent and cause of the deviation. The extent of deviation may be positive or negative, where positive means achievement of better results than planned and negative deviation is simply under-performance.
Sometimes managers exercise control by exception, they shortlist the critical deviations which are important for business and corrective measures need to be taken immediately to address them. Minor deviations should be ignored. It is also said, "If a manager controls everything, he ends up controlling nothing." For example, if stationery charges record negative deviation of 5 to 10%, it can be ignored. however, if monthly production declines 15% on a month on month basis, it is a critical deviation and should be addressed right away.
After identifying the deviation, the manager should think about various causes which actually lead to this deviation. The causes may include incorrect planning, coordination lapses, defective implementation, ineffective communication and inefficient supervision etc.
Taking remedial actions
After establishing the causes and extent of deviations, the manager should analyze those errors and undertake remedial measures. Following steps should be considered and practiced:
Take remedial measures for the deviations that have occurred; and post implementing the remedial measures, if the actual performance is still not in line with the planned targets, the manager should realize that targets were not feasible and should revise the targets downwards. This is the time when controlling process comes to an end.
