Controlling: A Vital Management Function

Controlling is a crucial aspect of management, ensuring that organizational activities align with plans and goals. It involves monitoring
performance, identifying deviations, and taking corrective actions to maintain efficiency and effectiveness.

by Aniket Chauhan
Understanding the Essence of Controlling
Goal Alignment Pervasive Function
Controlling ensures that activities are performed as per plans, Controlling is a fundamental function of every manager at all levels,
guaranteeing that resources are used effectively and efficiently to from top to bottom, across various organizations, including
achieve predetermined goals. businesses, educational institutions, hospitals, and clubs.
The Importance of
Controlling
1 Goal Achievement 2 Standard Accuracy
Controlling measures progress A robust control system verifies
towards organizational goals, the accuracy and objectivity of
identifies deviations, and guides set standards, ensuring they
corrective actions, ensuring the remain relevant and effective in
organization stays on track. a changing environment.

3 Resource 4 Improving employee

Optimization motivation
Controlling minimizes wastage Effective control systems can
and spoilage of resources by create a sense of purpose and
ensuring activities are accomplishment, boosting
performed according to employee morale and
predetermined standards and productivity.
norms.

5 Ensuring order and 6 Facilitating

discipline coordination in action
Clear guidelines and Controlling mechanisms help
performance monitoring align individual and team
promote a structured work efforts, ensuring everyone
environment, reducing chaos works towards common
and improving efficiency. objectives.
Limitations of Controlling
Quantitative Standards External Factors
Control systems can be less Organizations often have limited
effective when standards cannot be control over external factors like
defined quantitatively, making government policies, technological
performance measurement and changes, and competition.
comparison challenging.

Employee Resistance Cost Considerations

Employees may resist control Implementing and maintaining a
measures, perceiving them as control system can be costly,
restrictions on their freedom, requiring careful consideration of
leading to potential conflicts. the benefits versus the expenses
involved.
The Intertwined
Relationship of Planning
and Controlling
Planning and controlling are inseparable functions of management, each
complementing and supporting the other in a dynamic, cyclical relationship.
Planning sets the stage by defining goals, strategies, and action plans. These plans,
in turn, establish the benchmarks against which controlling measures progress. For
example, a company's strategic plan might target a 15% increase in market share
within the next year. Controlling would then involve monitoring sales figures,
market research data, and competitor activity to track progress toward this goal
and identify any deviations early on. If a deviation is detected, controlling triggers
corrective action, potentially adjusting the marketing strategy or production
processes. This adjustment could then further influence future planning cycles,
demonstrating the constant feedback loop between these two critical functions.
The success of any organization hinges on this continuous interplay, ensuring that
resources are allocated strategically and the organization remains agile and
adaptable in response to changing internal and external circumstances.
The Controlling Process: A Systematic Approach

1 Setting Performance Standards

This crucial initial step involves establishing clear, measurable, and achievable standards against which actual performance
will be rigorously compared. These standards should be derived from the organization's overall strategic goals and objectives,
as outlined in the planning phase. For example, if the strategic plan targets a 15% increase in market share, individual
performance standards might include sales targets for each salesperson or specific marketing metrics.

2 Measuring Actual Performance

Objective and reliable performance measurement is paramount. This step involves utilizing diverse techniques such as
personal observation, statistical sampling of outputs, regular performance reports, and automated data collection systems.
The selection of methods will depend on the nature of the performance being evaluated (e.g., sales figures, production output,
customer satisfaction scores). Accurate and consistent measurement is critical to ensure a fair comparison against the
standards set in the previous step.

3 Comparing Performance with Standards

Once actual performance data is gathered, a thorough comparison with the predefined standards must be conducted. This
often involves calculating variances – the difference between expected and actual results. This comparison provides a
quantitative measure of how well the organization is progressing towards its objectives. Significant variances warrant further
investigation and may highlight areas requiring corrective action.

4 Analyzing Deviations
Analyzing deviations is crucial for identifying root causes. This involves delving deeper than simply noting the variance. A
systematic approach may involve examining various factors including unrealistic standards (were the targets too ambitious?),
defective processes (were there internal inefficiencies?), external factors (were market conditions beyond our control?), or a
lack of employee engagement (was there resistance to the control measures?). A thorough investigation ensures the corrective
actions are properly targeted.

5 Taking Corrective Action

Corrective actions are crucial for realigning performance with the established standards. Based on the analysis of deviations,
these actions could involve adjustments to processes, reallocation of resources, improvements in employee training, or
changes to marketing strategies. It is important to document these corrective actions and to monitor their effectiveness. In
some cases, it may also be necessary to revisit and revise the initial performance standards if they are consistently found to be
unrealistic or inappropriate.
Critical Point Control and Management by
Exception

Critical Point Control Management by Exception

Focuses on key result areas that are critical to the success of the Emphasizes attention on significant deviations that exceed
organization, ensuring that deviations in these areas are addressed acceptable limits, allowing managers to prioritize their efforts and
promptly. resources.
Corrective Action: Restoring Alignment

Re-train Sales Team

1 Address inconsistent product knowledge identified through sales performance analysis.

Allocate Additional Resources to Marketing

2
Boost underperforming campaigns based on the observed gap in lead generation.

Streamline Production Process

3 Improve efficiency in manufacturing based on bottlenecks discovered in the
production timeline analysis.

Revise Sales Targets

4 Adjust ambitious targets based on an external market analysis
showing reduced demand.

Effective corrective action requires a precise diagnosis of the root cause. Addressing deviations might involve targeted employee training (e.g.,
retraining underperforming sales teams), reallocating resources (e.g., shifting funds to more successful marketing initiatives), improving
processes (e.g., optimizing production efficiency), or even revising standards (e.g., adjusting unrealistic sales targets). The choice depends
entirely on the context of the deviation and the data analyzed.
Key Takeaways and Next Steps
Controlling is an essential management function that ensures organizational success by aligning activities with plans and goals. By
implementing a systematic controlling process, organizations can monitor performance, identify deviations, and take corrective actions to
achieve desired outcomes. It is crucial to understand the importance of controlling, its limitations, and its relationship with planning to
effectively manage and optimize organizational performance.