8 H

CHAPTER-8

Controlling

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  Concept and Importance of Controlling

Features of Controlling :

(i)       Goal Oriented : Ensures resources are used effectively.

(ii)     Pervasive Function : Performed at all levels and in all types of organisations.

(iii)   Continuous : Brings management cycle back to planning.

(iv)   Both Backward and Forward Looking : Links past and future.

Ø Importance of Controlling :

(i)     Helps in accomplishing the organisational goals.

(ii)   Helps in judging accuracy of standards.

(iii) Helps in making the efficient use of resources.

(iv) Helps in improving the employee motivation.

(v)   Helps in ensuring order and discipline.

(vi) Helps in facilitating the co-ordination in action.

  Relationship between Planning and Controlling

Ø Relationship between Planning and Controlling :

(i)     Both are interrelated and interdependent :

(a) Controlling is based on planning as planning sets standards for controlling.

(b) Planning without controlling is useless as controlling compels events to confirm with the plans.

(ii)   Planning is prescriptive and controlling is evaluative :

Planning prescribes appropriate action while controlling evaluates performance.

(iii) Both are backward looking as well as forward looking :

(a) Planning is based on the past experiences and done for future.

(b) Controlling evaluates past activities and improves the future performance.

  Steps in the Process of Control

Ø Controlling Process :

(i)      Setting performance standards : Against which actual performance will be measured.

(ii)    Measurement of actual performance : Through personal observation, sample checking, etc.

(iii)  Comparing actual performance with standards : To reveal deviations from the set standards.

(iv)  Analysing deviations : By using critical point control and management by the exception techniques.

(v)    Taking corrective action : Involves training of employees, replacement of machinery, etc.

  Know the Terms

Ø Controlling : It refers to comparison of actual performance with the planned performance and taking corrective action for deviations if any.

Ø Critical Point Control : Focus on key result areas (KRA) which are critical for the success of an organisation.

Ø Management by exception : Only significant deviations which go beyond the permissible limit should be reported to the management.