Concept of Controlling
Control is the process that measures performance and guides it towards pre-determine goals. Controlling is a important functions of management. It monitors performance, compare actual performance with standard and take action to ensure desire result. Control is a dynamic process. Control prevent possible loss, damage, leakage or misuse and increase productivity and profitability by optimum mobilization of available resources. It creates friendly environment to enhance the moral of employee. Control plays very important role in the achievement organizational goal.
According to Ricky griffin, “control is monitoring organizational process toward goal achievement.”
Importance of control
a. Optimum utilization of resources: Controlling has become immense importance for proper and optimum utilization of human, physical and financial resources within the organization. It ensure that whether the work is performed correctly from the viewpoint of cost quality and time.
b. Better planning: Control is the only means to ensure that the plans are being implemented in the real sense. It point out the differences of planning by comparing the actual performance with the planned, standard and suggest steps to improve planning. It also provide useful information on the basis of which better plan can be formulated in future.
c. Psychological pressure: Control system puts a psychological pressure on the employees for better performance. The employee will assure that their activities are supervised, evaluated and these are related to either being rewarded or punished.
d. Reduction of cost: Controlling system helps the organization to reduce the cost operation. It helps to eliminate wastage and leakage in the organization also the duplication of work are checked, it reduce cost.
e. Helps in Coordination: As controlling determines standard of performance. It helps to create co-ordination between the departments with it. Controlling is essential to coordinate the activities of different staff and departments.
f. Simplified Supervision: Since, controlling consists of measuring and comparing performance with the established standard. It helps the supervisor to keep their subordinates under check and discipline. It provides regular reports on performance and progress of work. Timely reports helps supervisor in identifying gaps between performance and standard.
g. Environment Adaptation: Business organization, operate in a constantly changing environment. Control system helps manager to anticipate monitor and responds to the changing condition. An effective control system is also required to cope with complexities arising out of expansion diversification of business activities.
Controlling process:
a. Establishing standard: The first step in any control process is to establish the performance standard against which actual performance a result can be compared. Planning sets standard for performance standard may be quantitative when standard are set in physical and monetary term such as: Volume of production, labour working hours, cost revenue etc standard may also be expressed in qualitative term in such area as employee moral, motivation, superior subordinates relation etc. Where quantitative standards cannot be set, standard should be clearly understandable. Control standard should also be consistant with the organizational goal.
b. Measuring performance: The second step in the control process deals with the measurement of the actual performance. It is the actual performance which as to be compared with the standard. Hence, performance need to be measured constantly in an ongoing process that provides quick feedback of accurate and relevant Information. A sound management information system should be develop timely and accurate measurement of performance.
c. Comparing actual performance with standard: The third step in the control process is comparing the actual performance with standard. The comparison will reveal whether the performance equal the standard be higher or be lower than the standard. Where Standard are achieved generally no further managerial action is necessary. Often Comparison will reveal the deviation where management must do two things:
- To find the extent of deviation.
- Identify the causes of such deviation.
d. Taking corrective action: The last step in the control process is to take corrective action. If actual performance does not meet the standard managers must initiated corrective action. Such corrective action may be.
- Revision of standards
- Additional employee training
- Greater motivation
- Change in the existing technique of direction
- Revision of strategy and procedures
- Product design improvement etc
Essentials of effective control
a. Suitability: Suitability is an element of effective control. It should reflect the nature of the activities to be controlled. Besides, it should be surfed to the organizational structure.
b. Quickness: Controlling evaluation performance should be in proper time and the task of collect and distribution of related information should be as soon as possible. If the deviation between standard and actual performance is not known in proper time, corrective measure cannot be taken in time.
c. Economy: Control system should be economical that is less costly if it becomes more costly increase the cost of production due to which product cannot compete in market.
d. Simplicity: Simplicity is another important element of effective control. The control system should be easy. So that the manager , subordinates and other employee cam understand it easily. Complex controlling system may create confusion and disorder among the employees. Even if new scientific controlling system is to be introduced then it should be don in clear and understandable way.
e. Flexibility: Every organization operate it business in a dynamic environment situation. Thus, the control system should be flexible. So, that it could be adjusted to suit the need of any change in the environment. controlling system should not be rigid.
f. Focus on strategic point: An effective control system should focus on those critical area where deviation from standard are most likely to occur or would do the greatest damage. The control system should also concentrated on those area where corrective action can be most effectively applied
g. Corrective action: Effective control system does not only show deviation between standard and actual performance. It also helps in taking corrective measures. So, corrective action is essence of control.
h. Acceptable: The control system should be made acceptable for all the members of the organization. It should be acceptable by stakeholders.
Important questions:
- Define controlling and describe importance of controlling in business
- What is controlling? Explain the controlling process.
- What do you understand by controlling and explain the essential of effective control.
