controlling meaning and process
What is controlling,
controlling involves measuring and correcting the action of subordinates, to assure that events conform to plans, thus it measures performance against goals and plans, shows where negative deviations, exist and by putting in remedial action to correct deviations helps assure accomplishment of plans,
Process of controlling
- Establishment of standards: because plans are the yardsticks against which control must be devised , it follows logically that the first step in the control process would be to establish plans, however since plans vary in detail and complexity and since managers cannot usually watch everything , special standard are established , standard are by definition simply, criteria of performance, these standards may be stated in physical terms, such as qualities of products, units of services man hours or speed or they may be expressed in monetary terms, such as volume of sales, cost capital expenditure or profit they may also be expressed in qualitative term or in any other way what can give a clear indication of performance ,no matter how these standard are expressed these are the selected points against which actual performance, is compared so as give managers signals to how things are going without their having to watch every step in the execution of plans,
- Measurement of performance: The second step in the control process is the measurement of the performance of the subordinates, the measurement of performance may be quite simply, if it is to be compared against man-hour standard for the production of a mass production, and dislike of individual customers, similarly, appraisal of performance may be very difficult in the less technical kinds of work, thus we can say that performance depends, upon standards –if they are definite, performance will be easy to measures, if they are vague, performance will be difficult to measure,
- Correction of deviations; this is the third step in the control process, correction of deviations clearly brings out the relation between control and other function of management, managers may correct deviations by redrawing their plans or by modifying their, goals or they may correct deviations by Exercising their organising function through reassignment or classification of duties, they may correct it by additional staffing, by better selection and training of subordinates or again, they may correct it through better or fuller explanation of the job or by more effective leadership techniques,
controlling meaning and process
Requirements for Adequate controls,
All alert managers want to have an adequate and effective system of controls to assist them in making sure that events conform to plans, the following requirements should be kept in mind for designing an effective control system,
- control should Reflect plans and positions; all control techniques and system, should reflect the plans these are designed to follow, every plan has unique features, managers require information on how well the various plans are working the information required to evaluate the progress of different plans varies from one plan to another, the controls should be so designed that they provide different types of information for evaluating different, plans In the same way control should be tailored to positions, different control are required, for different persons incharge of different departments what may be suitable for one incharge may not be suitable for another incharge, therefore, effective controls, are those which best the specific requirements, of different heads of departments or sub-departments,
- controls must be tailored to Individual managers and their personalities; control must be tailored to the personalities, of individual managers, if they are not of a type that a manager can or will understand, they will not be useful, some people, such as statisticians and accountants, like their information in form of complex tables of data or bulky computer print-outs, In such cases, let them, have it that way the important thing is that various controls should provide the managers with the information they need in a manner that they will understand and use,
- control should point out exceptions at critical points: controls should point out exceptions so that managers may concentrate on them, for remedial measures, they should also indicate which deviations are more important and which are less, A managers for example, might be concerned if the cost of labour deviated from budget by 5 % but he is unworried if the cost of postage stamps deviated from budget by 20% therefore, controls should point out exceptions only at critical points, it is true that more the managers, concentrate their control efforts on exceptions, the more efficient their control mechansim, will be but this principle is best understood in the light of the fact that effective control requires managers to pay primary to those things which are most important,
- controls should be objective: effective control requires objective standards, whether a subordinates, is doing a good job should ideally not be a mater of subjective determination because in that case judgements of performance will be inaccurate, but if the standards are objective, and measurements, are kept upto-date through periodic review, controls would be more effective,
- controls should be flexible: controls should remain workable in the face of changed plans, unforeseen circumstances, or outright failures, if controls are to remain effective, despite failure or unexpected changed of plans, they must be flexible , the need for flexible control can readily be illustrated, A budget system, may project a certain level of expenses and grant authority to managers, to hire labour and purchase materials and services at this level, if this budget is based on a forecast sales volume is considerably above or below the technique what is needed therefore, is a budget that will reflect sales variations as well as other deviations from plans, this requirement is provided by the flexible budget,
- Controls should be Economical: controls must be worth their cost, although this requirement is simple, it if often difficult to accomplish practice, it is difficult to undertake, a cost -benefit analysis of a control system, however controls should ideally bring to light the causes of actual or potential deviations form, plans with the minimum of costs,
- controls should lead to corrective action:, an adequate system, will disclose where failures are occurring and who is responsible for them, and it will ensure that some, corrective action is taken, control is justified only if deviation, from plans are corrected through appropriate planning, organizing staffing and leading,
- Controls should be forward-looking: there is usually a time lag between the measurements of performance and correction of deviation , this time lag is undersirable, what managers really need for effective control is a system of control that will tell them, in advance that problems will occur if they do not do something about, now effective controls are those which are directed towards the future,
controlling meaning and process
Significance of control
controlling is a basic function of management, it ensures that actions proceed according, to plans, as well designed system, of control permits top management to delegate authority, free itself of unnecessary deatil, and ensure achievement of plans, management controls serves as a yardstick for allocating resources and evaluating performance , it provides a guide to future action, it provides order and discipline in the organisation, Realistic control simplifies supervision by pointing out only significant deviations, realistic control helps the management in achieving the enterprise objectives in the most efficient, manner,
controlling meaning and process
Techniques of managerial control,
A variety of tools and techniques have been used to help managerial control, some of these techniques may be classified as traditional in the sense that they have been used for long by the managers, some of the traditional techniques of control are: budget, statistical data, special reports and analyses, operational audit and personal observation, other techniques like programme Evaluation and review techniques (PERT) etc, represent newer generation of planning and control tools,
controlling meaning and process
Traditional techniques,
A budgetary control, A widely used device for managerial control is the budget A budget is a plan showing how resources will be acquired and used over a specified time interval, the act of preparing budgets is called budgeting ,and the use of budgets as a means for controlling activity called budgetary control,,
Benefits of budgetary control: budgetary control leads to maximum utilization of resources with a view to ensure maximum returns because it provides aid to managerial planning and control following are some specific advantages of budgetary control,
- Budgets are the result of planning function and as such they direct every action of the organisation towards goal achievements, budgets also provide a basic for coordinates and integration of various activities in the organisation
- budgetary control involves measuring performance and comparing it against budgeted figures, through this process the variations are struck out and responsibilities, fixed in this light reports are prepared and presented to management and suitable actions, are taken thus budgetary control is used as an effective and integrated control tool,
- Budgetary control makes people in the organisation conscious about cost and performance, this leads to effective utilisation of organisation resources such as labour, machines, and materials,
- it is somewhat a democratic way of managing and control in the organisation where budgetary control is exercised generally more authority for preparing budgets is delegated to subordinates thus, there is no undue centralisation of authority, the delegation of authority is a condition to the success of budgetary programme, moreover, there is a participation in management at all levels of the organisation in the preparation of budgets ,