Do you know how much important controlling? it is the last function and also the most important function because in this step we measure our planned performance with actual performance.
so, lets start a detailed blog on controlling in brief.
Whats in it for me?
- Meaning of controlling
- Importance of controlling
- Process of controlling
- Frequently asked questions
Meaining of controlling
This is the last and very important managerial function of managers. In this function, managers try to match the actual performance with the planned performance and if there is no math between both then managers find out the reasons for the deviation and suggest corrective measures to come on the path of plan.
It is concerned with taking necessary corrective measures or preventive actions to ensure the achievement of organizational objectives. So, the Controlling function refers to all performance measurements and follows up actions that keep the actual performance on the path of plan.
It is described as a comparison of actual performance with planned performance to find out the deviations so that necessary corrective action can be taken timely and objectives of the organization can be achieved effectively and efficiently.
Controlling is determining what is being accomplished that means evaluating the performance. It has a very wide scope as it is not confined with end results but also finding reasons for the deviation between actual and planned performance.
Controlling function leads to the achievement of goals and without controlling an organization is not likely to accomplish its goals.
Mr. X targeted the turnover of the current year Rs. 500000 but he could only achieve Rs 300000, i.e. the actual performance is not as same as planned performance so here the manager will find out the deviations caused and reasons behind it.
Importance of controlling
1. Helps in achieving organisational goal
When the plans are made in the organization they always directed towards the achievement of organizational goals.
controlling confirms all the actions done during the time and according to plan and if there is any difference timely action is taken to bring back the activities on the way of planning. When everything is going according to the assumptions and plan organizational goals will automatically achieve.
2. Accuracy of standards
Through controlling we can easily differentiate whether the standard and quality of the product are accurate according to plan or not. An accurate control system revises standards from time to time to match them with environmental changes
3. Efficient use of resources.
This feature is very similar to traffic signal control guides the organization always to keep in mind to be on the right track. But every product is to be produced according to the planned standard. As a result there is the most effective use of resources.
4. Improves Employees Motivation
An effective control system presets the goals in the mind of employees and standards of appraisal for employees to subordinates well in advance. This helps to keeps themselves motivated and they continuously strive for the best performance so that organizational as well as personal objectives are achieved.
Good control can also guide employees to come out of their problems. Free communication and care motivate the employees to give better performance.
5. Maintains order and discipline in the organization
Effective control in the organization creates an atmosphere of order and discipline in the organization. But, It keeps the subordinates under check and makes sure they perform their functions effectively and efficiently.
Sharp control can have a check over dishonesty and fraud of employees. As a result, Strict control monitors, employees work on the computer monitors which brings more order and discipline in the work environment.
6. Facilitates Co-ordination in action
Effective control helps to maintain equilibrium between means and ends.so, Controlling makes sure that proper direction is taken and that various factors are maintained properly.
All the departments are controlled accordingly to predetermined standards which are well coordinated with one another. It provides a unity of direction i.e. all the efforts of the organisation are directed towards the achievement of the same objective.
Process of Controlling
1. Setting up of standard.
Setting up of standards means targets against which actual performance is measured. The standards become a basis for comparisons and the manager insists on following standards.
The standards must be achievable, high, or very high standards which can not be achieved are of no use. Standards must be set up keeping in mind the resources of the organization, skills, and abilities of the human resources as well as the standards must be set up in measurable terms.
Company XYZ set the standard for sales of Rs. 20 lakhs per annum, standard profit Rs. 5 Lakhs and reproduction in cost by 5%.
Sometimes it becomes difficult to express the standards in numerical or measurable terms. for instance, setting up standards for managerial work.
The standards must specify the time limit within which they have to be achieved and as far as possible standards must be set up for the short term. If long term standards are set up they must be divided into short term.
2. Measuring of performance.
After the standards are set work done by employees is measured by evaluating the actual work done by the employees.
If performance is measure on the basis of numbers it becomes easy to measure the performance.
Qualitative and quantitative aspect kept in mind while comparing. Sometimes employees achieve qualitative standards by ignoring qualitative standards.
Generally, the performance of managers is measure by looking at the overall efficiency level of the organisation.
3. Compare performance against standard.
After the performance measuring managers compare the planned performance with the actual performance and standard. If the results come the same then the controlling function ends and if there is no match or any deviation then the manager will try to find out the reason for the deviation.
If the deviation is minor then it can be ignored and if there is major deviation then timely actions can be taken.
4. Analyzing deviations.
All the deviation must be presented to the top management.
A limit of deviations should be set up and only when the limit is crossing it should be presented to the top-level management.
There must be two categories of deviations one which is to be attended urgently and one category of minor deviation which is either ignored or attended at that level.
if production cost increased by rs2, then it can be ignored and if it increased more than rs2, then the manager must need to find out the reasons for such deviations and reason must be presented in top-level management for critical management whereas the increase less than rs2 can be handle at supervisory level or can be ignored also for the same time.
5. Taking corrective measures.
When an organization compares actual performance with planned performance, then managers will get to know about the deviations between planned performance and actual performance.
The next step of every manager is to find out the reason behind such deviations and trying to ignore such deviation in the future. The managers take measures to bring back everything on track, i.e., according to plan.
Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates, a manager needs to exercise effective control over the activities of the subordinates.
In other words, the meaning of controlling function can be defined as ensuring that activities in an organization are performers as per the plans. Controlling also ensures that an organization’s resources are being used effectively & efficiently for the achievement of predetermined goals.
Frequently asked questions
Controlling is important because it seeks to get planned results from the subordinates. A manager needs to exercise effective control over the activities of the subordinates to ensure the resources of the organization are utilized effectively and efficiently against the pre-determined objectives.
Deviations are the shortfalls or gap between the planned and actual performance. In other words, it can be calculated by difference between the actual and the planned performance.
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