Question

What is controlling?

Hint:

{Controlling in Simple Words:}

• Check performance vs standards
• Find gaps
• Fix problems

It ensures things happen as planned.

Answer 1

Controlling

Definition:

Controlling is a fundamental function of management that involves monitoring organizational performance, comparing actual performance with predetermined standards, and taking corrective actions when necessary to ensure that goals are achieved efficiently and effectively.

Key Features of Controlling:

• Goal-Oriented: Controlling focuses on achieving organizational objectives.
• Continuous Process: It is an ongoing activity carried out regularly.
• Pervasive Function: It is required at all levels of management — top, middle, and lower.
• Forward and Backward Looking: It evaluates past performance and helps improve future performance.
• Dynamic Process: It adapts to changes in the internal and external business environment.
• Action-Oriented: It emphasizes corrective action rather than merely detecting deviations.

Process of Controlling:

1. Setting Performance Standards:
   • Establishing benchmarks or targets.
   • Standards should be specific, measurable, attainable, realistic, and time-bound.
   • Example: Target sales = \( ₹5,00,000 \) per month.
2. Measurement of Actual Performance:
   • Collecting data about actual performance.
   • Methods include reports, observation, inspection, and statistical data.
   • Example: Actual sales = \( ₹4,50,000 \).
3. Comparison of Actual Performance with Standards:
   • Identifying deviations between actual and standard performance.
   • Deviation can be calculated as:
   • \( \text{Deviation} = \text{Actual Performance} - \text{Standard Performance} \)
   • Example: \( ₹4,50,000 - ₹5,00,000 = -₹50,000 \)
4. Analysis of Deviations:
   • Finding causes of deviations.
   • Determining whether they are controllable or uncontrollable.
   • Example: Low demand, poor marketing, supply issues.
5. Taking Corrective Action:
   • Taking steps to correct negative deviations.
   • Revising standards if unrealistic.
   • Encouraging and rewarding positive performance.

Importance of Controlling:

• Ensures achievement of organizational goals.
• Promotes efficient use of resources.
• Provides feedback for effective decision-making.
• Improves employee motivation through clear performance standards.
• Maintains discipline and order in the organization.
• Helps in adapting to environmental changes.

Types of Control:

Type	Timing	Explanation
Feedforward Control	Before operations begin	Prevents problems before they occur (e.g., budgeting, training).
Concurrent Control	During operations	Monitors activities in real-time.
Feedback Control	After operations are completed	Evaluates performance after completion.

Relationship Between Planning and Controlling:

Planning and controlling are interdependent functions of management.

• Planning sets the standards.
• Controlling ensures performance follows those standards.

Mathematically, we can express the relationship as:

\( \text{Controlling Effectiveness} \propto \text{Quality of Planning} \)

Without planning, controlling has no basis. Without controlling, planning becomes ineffective.