Controlling by Rajat Jhingan

8/4/2019 Controlling by Rajat Jhingan

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ControllingDefinition, Nature & Features

B y : R a j a t J h i n g a n


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Controlling

Control is the process of comparing actualperformance with established standards, for the

purpose of taking actions to correct deviations.

The basic purpose of a well designed controlsystem is to ensure that results are achieved

according to plan.

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Controlling

It is making something happen the way it wasplanned to happen. It involves keeping theorganizational activities and functions on theright track and aligned with plans and goals.

It is said that like a ships rudder, controllingkeeps the organization moving in the properdirection.

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Controlling

Features of Control

Positive force The primary objective of controlis to find where failures are occurring, who isresponsible for them and what should be doneabout them. It is, thus, a positive force, aimed atsecuring performance.

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Controlling

Continuous Just as the navigator continuallytakes readings to ascertain where he is, relative to

a planned course, so should the business managercontinually take readings to assure himself thathis enterprise or department is on course.

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Controlling

Forward looking Control involves a postmortem examination of past events with a view to

improve performance in future. Control does notwait till the train gets derailed, it seeks to preventthe train going off the track.

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Controlling

Universal Control is a primary function ofevery manager. It has to be undertaken at every

level.

Dynamic Control is a dynamic process in thesense that it is amenable to change, and hence,

highly flexible.

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Controlling

Goal oriented Control guides activities (alongdesired lines) towards predetermined goals. The

primary focus of control is on achieving results,checking deviations, if any, and initiating timelyremedial steps.

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Controlling

Planning based Control is based on planning.A system of control presupposes the existence of

certain standards, which are determined in theprocess of planning.

Planning is useful only when there is effective

control. Planning without control is meaningless.

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Controlling

Controlling, however, has its own limitations. Anenterprise has very little control over external

influences.

Employees, too, do not like to be watched fromclose quarters and offer resistance when the

control system is too tight and rigid.

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Controlling

Further, its easy to control certain functions butnot so easy to control other functions. Manyareas defy measurement in quantitative terms.

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ControllingThe Control Process


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The Control Process

Step 1: Establishment of standards The first step in the control process is establishingstandards. Standards are the targets against whichsubsequent performance will be compared.

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Controlling They are, by definition, simply criteria of

performance. They serve as the benchmarks because

they specify acceptable levels of performance.

Standards could be either quantitative or qualitative.

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Controlling Quantitative standards are generally expressed

in physical or monetary terms.

Such standards are typically set up in respect ofproduction, finance, sales etc. Quantitativestandards could be based on time, cost,

productivity, or revenue.

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Controlling Qualitative standards, on the other hand, arebased on the level of perfection desired in respect of

certain intangible items such as goodwill, employeemorale, industrial relations, customer satisfactionetc.

Such standards are difficult to be measured directlyand precisely.

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Controlling

Step 2: Measurement of actualperformance

The second step in control process is themeasurement of actual performance. Here, theactual performance of employee is measured againstthe standard fixed for his job.

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Controlling

Where standards are expressed in numericalterms, measurement does not create problems.

E.g.; in production, finance or sales.

However, where standards are expressed inqualitative terms, measurement becomes difficult.

E.g.; in HR, Customer Care etc.

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Controlling

Generally speaking, the measurement ofperformance is more difficult at the higher levels

of management.

Measurement can be done directly throughpersonal observation or indirectly through regular

reports (oral or written).

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Controlling Step 3: Comparison of actual performancewith standard

In the third step of controlling process, actualperformance is compared with the standard.

It helps to determine the degree of variation between

actual performance and the standard.

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Controlling Some variation in the performance can be expected

in all the activities. It is important at this stage to

determine the acceptable range of variation.

Deviations in excess of this range become significantand receive managers attention.

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Controlling Step 4: Taking corrective action

The last and final step in the control process is

taking corrective action, when required. Correctivesteps are initiated by managers with a view to rectifythe defects in actual performance.

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Controlling Corrective action may include a whole range of

activities, such as, changing the strategy,

methodology, rules, compensation practices,redesign of jobs, replacement of personnel,reestablishment of budgets and even redefining thestandard itself.

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ControllingTypes of Control

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Controlling

Types of Control Feedback Control It is the process of gathering

information about a completed activity, evaluatingthat information and taking steps to improve similaractivities in the future.

It is a post mortem examination of events, the purposeof which is to improve performance in future.

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Controlling Concurrent Control Concurrent control

consists of monitoring ongoing activities to ensure

they are consistent with standards. It is alsoknown as real time control.

The navigator of an aircraft who adjusts the

aircrafts movements is an example of concurrentcontrol.

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Controlling Feed forward Control Here, the control

system anticipates problems that the management

encounters in future. Cash budget is an example ofthis type where the finance manager is in aposition to estimate the nextyears flow of cash.

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Controlling It is, thus, a more aggressive, proactive approach

to control, allowing corrective action to be taken

ahead of the occurrence of the problem.

This type of control is also known as predictivecontrol since it attempts to anticipate problems

in advance of their occurrence.

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Controlling

In a large, multi-product, multi-plant and multi-location organization, it is not possible to check

everything and initiate timely, remedial stepswherever things go off the track.

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Controlling

Managers, therefore, focus attention on key orcritical areas which have a significant bearing on

the performance of the various departments inan organization.

Exercising control in the above said manner isknown as critical or strategic point control.

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Controlling

It puts emphasis on measuring the performanceand checking deviations in respect of key result

areas which are highly critical to the success of afirm.

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Controlling

Another, modern way to exercise control is bycontrolling only those things which are unusual

or exceptional.

This type of control is known as management

by exception and it tries to focus attention onexceptionally serious deviations from the plansand standards.

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Controlling In management by exception, the managers

intervene only when asked by the subordinates

for their intervention or when they find a seriousdeviation from the plans and standards.

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Controlling The intensity and type of control depends on a

variety of factors, such as, the nature of the task,

the competence of the personnel, the level ofmanagement, and the management philosophyetc.

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Controlling by Rajat Jhingan