Concept And the Process of

Control

WHAT IS CONTROLLING?
Controlling is a pivotal management function that entails the systematic process of
monitoring, measuring, and regulating organizational activities to ensure that they
align with predetermined goals and standards. It serves as a compass for
managers, allowing them to assess performance and make necessary adjustments
to steer the organization toward success.

Characteristics Of Controlling
1. Pervasive: Controlling is an all-encompassing management function that extends
across all levels and departments of an organization. It is not limited to a specific
segment but permeates every aspect of the organization.

2. Review of Past Events: Controlling involves an analysis of historical performance

data. Managers assess what has been achieved in the past to identify trends,
patterns, and areas that may require adjustment.

3. Forward-Looking: While it reviews past events, controlling is inherently forward-

looking. It focuses on ensuring that current actions align with future goals and
objectives. It aims to prevent issues and variances from occurring in the first place.

4. Action-Oriented: Controlling is action-oriented and proactive. It doesn't stop at

analysis but emphasizes taking corrective actions when deviations are identified to
keep the organization on course.
5. Continuous: Controlling is an ongoing and continuous process. It is not a one-time
event but a systematic and persistent effort to monitor and regulate organizational
activities to maintain efficiency and effectiveness.

6. Dynamic: Controlling adapts to changing circumstances and environments. It

recognizes that conditions may change, and the control mechanisms must be flexible
and responsive to new challenges.

7. Does Not Curtail the Rights of Individuals: Effective controlling does not infringe
upon the individual rights and responsibilities of employees. It ensures that controls
are applied in a fair and respectful manner, respecting the autonomy and dignity of
employees.

Controlling, with these characteristics, serves as a fundamental and indispensable

element of management, helping organizations achieve their goals, maintain quality,
and respond to deviations or issues effectively.

Relationship between controlling and planning

The relationship between controlling and planning in the context of management is

closely intertwined and can be summarized as follows:

1. Interdependence: Controlling and planning are two fundamental functions of the

management process, and they are interdependent. Planning sets the foundation for
controlling. When managers create plans, they establish goals, objectives, and
standards that serve as a reference point for controlling. Without planning, there
would be no benchmark against which to measure actual performance.
2. Feedback Loop: Controlling provides a feedback loop to the planning process. After a
plan is implemented, controlling measures actual performance against the plan. Any
discrepancies or deviations between the planned and actual results are identified
through the controlling process. This feedback is then used to evaluate the
effectiveness of the initial plan.
3. Alignment: Controlling ensures that the organization remains aligned with its goals
and objectives as defined in the planning phase. If there are significant deviations
between actual performance and the plan, it may necessitate adjustments to the
plan to ensure that the organization continues to move in the desired direction.
Significance Of Controlling
1. Contribution to Goals: Controlling ensures that the organization is progressing
towards its goals and objectives as planned. It serves as a yardstick to measure
the extent of goal achievement and keeps the organization on the right track.

2. Efficient Use of Resources: Controlling helps in optimizing the use of resources,

both human and financial. It ensures that resources are allocated effectively and
not wasted, contributing to cost efficiency.

3. Motivation of Employees: By setting clear performance standards and providing

feedback on performance, controlling motivates employees. It helps in improving
morale and performance by recognizing and rewarding achievement.

4. Coordination: Controlling promotes coordination within the organization. It

ensures that different departments and teams are working in sync to achieve
common goals, minimizing conflicts and overlaps.

5. Corrective Action: Controlling identifies discrepancies and deviations from the

plan. This enables managers to take corrective actions promptly, preventing
minor issues from becoming major problems.

6. Decision Making: Data collected during the controlling process aids in informed
decision-making. It provides managers with real-time information on the
organization's performance, helping them make timely and effective decisions.

7. Better Planning: Controlling provides valuable insights for future planning. By

analyzing past performance, organizations can refine their plans, making them
more realistic and achievable.

8. Decentralization of Authority: Controlling can be carried out at various levels

within an organization. It enables the decentralization of authority, empowering
lower-level managers to take necessary corrective actions and make decisions
within their areas of responsibility.

9. Effective Supervision: Controlling ensures effective supervision and oversight.

Managers can monitor the work of their subordinates, guiding them towards
goal attainment and intervening when necessary.
 In summary, controlling plays a crucial role in managing an organization
effectively. It helps in achieving goals, maintaining efficiency, motivating
employees, coordinating efforts, taking corrective actions, facilitating decision-
making, improving planning, decentralizing authority, and ensuring effective
supervision throughout the organization.

Limitations Of Controlling
1. Difficulty in Setting Standards: Setting precise and realistic performance
standards can be challenging. In some cases, it's difficult to establish clear and
measurable criteria for evaluating performance.

2. Lack of Control: Controlling cannot control every aspect of an organization. There

are external factors, market fluctuations, and uncontrollable variables that can
significantly impact an organization's performance.

3. Limitations of Corrective Action: While controlling helps identify deviations from

plans, it may not always provide immediate or effective solutions. Corrective
actions may be limited by the resources available or the nature of the problem.

4. Costly: Implementing a comprehensive controlling system can be expensive. It

involves data collection, analysis, and reporting, which can require both time and
financial resources.

5. Difficulty in Fixing Responsibility: In some cases, it can be challenging to pinpoint

responsibility for performance deviations. Multiple factors may contribute to a
problem, making it difficult to hold individuals or departments accountable.

6. Employee Resistance: Employees may perceive controlling as intrusive or as a

tool for micromanagement. This can lead to resistance and decreased morale,
which can be counterproductive to organizational goals.

It's important to recognize these limitations when implementing a controlling system and to
strike a balance between the benefits of control and the potential challenges that may arise.
 Steps Of Controlling
Controlling is an essential management function that involves several steps to
ensure that an organization's activities are aligned with its goals and standards. The
typical steps in the controlling process include:

1. Establishing Standards: The first step is to define clear and measurable standards
or performance criteria. These standards can be based on the organization's
goals, past performance, industry benchmarks, or other relevant factors.
Standards can pertain to various aspects of the organization, such as quality,
cost, time, or quantity.

2. Measuring Performance: Once standards are established, the next step is to

measure actual performance. This involves collecting data and information to
assess how well the organization is doing in comparison to the set standards.
Data sources can include reports, observations, and various performance
metrics.
3. Comparing Performance to Standards: After measuring performance, you
compare the actual results to the established standards. This comparison reveals
any deviations or variances. It's crucial to differentiate between acceptable
variances and those that require corrective action.

4. Identifying Deviations: In this step, you identify and analyze any significant
deviations or discrepancies between actual performance and the standards. It's
essential to determine the root causes of these deviations and understand why
they occurred.

5. Taking Corrective Action: If deviations from the standards are significant and
undesirable, corrective actions are initiated. Corrective actions can involve
changes in processes, resource allocation, training, or other strategies to bring
performance back in line with the standards.

6. Communicating Results: Controlling requires effective communication of

performance results throughout the organization. Managers should share
feedback on performance, highlighting achievements, addressing shortcomings,
and discussing corrective actions with relevant stakeholders.

7. Feedback Loop: Controlling is an iterative process. The feedback received from

the controlling process can influence future planning, goal setting, and
adjustments to standards. This feedback loop allows the organization to
continuously improve.

8. Documenting and Reporting: It's important to document the entire controlling

process, including standards, measurements, comparisons, and corrective
actions taken. Proper documentation provides a historical record of performance
and actions for future reference.

9. Follow-Up and Evaluation: After corrective actions are taken, it's crucial to follow
up and evaluate their effectiveness. This step ensures that the organization
remains on the right course and that the deviations have been addressed
adequately.

10. Adaptation: Controlling should be adaptive and flexible. As the organization's

goals, strategies, and environment change, the controlling process must also
evolve to remain effective.

These steps collectively form the controlling process, which helps organizations
monitor, evaluate, and adjust their activities to ensure they are in line with their
goals and standards.
 Principles Of Controlling
1. Emphasis on Objectives: Control should be focused on the organization's
objectives and goals. It ensures that activities and resources are directed toward
achieving these objectives.

2. Efficiency of Controlling Techniques: Use efficient and effective control

techniques and tools that provide accurate and timely feedback on performance.
The chosen techniques should match the nature of the activity being controlled.

3. Responsibility for Controlling: Clearly define and assign responsibility for control
at all levels of the organization. Each manager or team should be responsible for
monitoring and controlling their area of responsibility.

4. Direct Control: Control should be exercised directly over the factors that can be
controlled. Avoid indirect or vague control methods that do not directly influence
performance.
5. Suitability: Control measures and techniques should be suitable and appropriate
for the specific activity or task being controlled. One size does not fit all; customize
controls to the context.

6. Flexibility: Control systems should be adaptable to changing circumstances and

goals. They should accommodate adjustments and variations when needed.

7. Self-Control: Encourage self-control among employees and teams. Individuals

should take ownership of their work and be responsible for adhering to
standards and achieving objectives.

8. Control Exception: Focus on exceptions and significant deviations rather than

micromanaging every detail. This allows managers to concentrate their efforts
where they are most needed.

9. Strategic Point Control: Identify key strategic points in the organization where
control is most critical. Allocate resources and attention to these points to
maximize the impact of control efforts.

10. Corrective Actions: Control is not just about identifying problems but also about
taking corrective actions to address them. Deviations should be met with
effective and timely responses.
 11. Forward-Looking: Controlling should not only look at past performance but also
be forward-looking. It should consider how current actions align with future
objectives and adjust accordingly.

12. Human Factor: Recognize the human element in controlling. Effective control
considers the motivations and behaviors of employees and ensures they are
aligned with organizational goals.

13. Economical: Control processes should be cost-effective. The benefits of control

should outweigh the costs involved in implementing and maintaining the control
system.

14. Objective Standards: Use objective and quantifiable performance standards

whenever possible. Subjective standards can lead to bias and misinterpretation.

By adhering to these principles of effective control, organizations can ensure that

their control systems are not only efficient but also contribute to the achievement of
their objectives and the overall success of the organization.

Control By Exception
1. Definition:
- Control by exception is a management approach that emphasizes monitoring and
intervention only when actual results deviate significantly from planned or expected
outcomes.

2. Key Principle:
- The principle revolves around the idea that management should only get involved or take
action when there are significant deviations from the established plans or standards.

3. Efficiency:
- This approach allows organizations to operate more efficiently by minimizing the need
for constant oversight of routine activities. It enables managers to concentrate their efforts
where they are most needed.

4. Resource Optimization:
- Resources are allocated more effectively as attention is directed towards areas that
require it the most. This prevents unnecessary micromanagement and ensures that scarce
resources are utilized judiciously.

5. Thresholds and Standards:

 - Control by exception relies on the establishment of predetermined thresholds or
standards. Deviations beyond these thresholds trigger management intervention, allowing
for a proactive response to potential issues.

6. Risk Management:
- By focusing on exceptions, organizations can better manage and mitigate risks. Early
identification of significant deviations provides an opportunity for timely corrective action.

7. Decision-making Framework:
- Managers using control by exception typically rely on a decision-making framework
where routine, low-impact decisions are made at lower levels, and higher-level
management becomes involved when exceptional situations arise.

8. Communication:
- Effective communication is crucial in a control by exception system. Clear reporting
mechanisms and channels should be in place to promptly notify management when
significant deviations occur.

9. Applicability:
- This approach is often employed in project management, financial management, and
various organizational processes where deviations from plans can have significant
consequences.

10. Examples:
- In project management, a manager may only be alerted if a project is behind schedule by
a certain percentage. In financial management, budgetary controls may trigger intervention
if actual expenses deviate significantly from the budget.

Remember to tailor these notes according to the specific context or requirements of your
assignment. If you have any specific questions or need more detailed information on a
particular aspect, feel free to ask!