CONTOLLING

Controlling function can be defined as comparison of actual performance

with the planned performance. If there is any difference or deviation then
managers try to find out the reasons of deviation and suggest corrective
measures to come on the path of plan.

TWO ASPECTS OF CONTROLLING FUNCTION

• Strategic control: It refers to check how effective the strategies and the
plans are because sometimes there can be deviation in actual
performance and planned performance due to plans and strategies.

• The operational aspect: It refers to focus on managerial and other

activities of the organisation.

NATURE Of CONTROLLING
1. Controlling is a goal-oriented function: Controlling function makes
sure everyone follows the plan or work is accomplished as per the plan.
2. Controlling is an all-pervasive function: Controlling is not the task of
top-level managers only but managers working at all the levels.
3. Controlling is both backward looking as well forward looking
function: Controlling 1s backward looking function as managers
compare the planned performance with actual per1ormance and to
measure actual performance they have to look back to the
performance already done. Controlling is forward looking also this
function make sure that plans and performance match.
4. Controlling is a continuous function: Controlling is not a one time job,
it is carried on till the organisation is surviving .

[1]
 IMPORTANCE OF CONTROLLING
1. Helps in achieving organisational goals: When the plans are made in
the organisation these are directed towards achievement of
organisational goal and the controlling function ensures that all the
activities in the organisation take place according to plan.
2. Judging accuracy of standards: Through strategic controlling, we can
easily judge whether the standard or target set are accurate or not.
3. Making efficient use of resources: Like traffic signal control guides the
organisation and keeps it on the right track. Each activity is performed
according to predetermined standards.
4. Improving employee’s motivation: An effective control system
communicates the goal and standards of appraisal for employee to
subordinates to subordinates well in advance well in advance.
5. Ensures order and discipline: Control creates an atmosphere of order
and discipline in the organisation.

RELATIONSHIP BETWEEN PLANNING AND CONTROLLING

The planning and controlling actions of management are very closely

related.
1. Nature and concept: Planning is the basic function of every enterprise
as in planning we decide what is to be done, how it is to be done, when
it is to be done and by whom it must be done. Where as Controlling
function can be defined as comparison of actual performance with the
planned performance. If there is any difference or deviation then
managers try to find out the reasons of deviation and suggest corrective
‘
measures to come on the path of plan.

[2]
2. Planning and controlling are interdependent and
interlinked: Planning and controlling are interdependent and
interlinked. Planning and controlling functions always co-exist or
have to exist together as one function depends on the other. The
controlling function compares actual performance with the
planned performance and if there is no planned performance
then controlling manager will not be able to know whether the
actual performance is O.K. or not.
3. Planning and control both are forward and backward
looking: Controlling is backward looking because the manager
looks back to previous year's performance to find out its
deviations from standards. planning is also backward looking
because planning is guided by past experiences and feedback
report of controlling function. Planning is forward looking
because plans are prepared for future.. Controlling is also forward
looking because- . It involves finding, the reasons for deviations
and suggests the measures so that these deviations do not occur
in future.
4. Planning is prescriptive whereas controlling is
evaluative: Planning is basically an intellectual process
involving lot of thinking. On the other hand, controlling involves
assessing or verifying whether the ideal reason for activity is
followed.

“DEVIATION" IN CONTROLLING
Deviation refers to difference between actual performance and
Standard Performance
Positive deviation: When ·actual. performance is better than planned
performance it is called positive deviation.
For example :
Plan = 100 units
Actual production = 120 units
Deviation = + 20 units
[3]
 Negative deviation: When actual performance is less than planed
performance than it is called negative deviation.
For example,
Plan = 100 units
Actual production = 80 units
Deviation = - 20 units

CONTROLLING PROCESS
1. Setting-up of (target) standards: Standards means target or the
yardstick against which the actual performance is measured.

2. Measuring of performance: After setting up of standards, the

performance of employees is measured by evaluating the actual work
by the employees.

3. Compare performance against standard: After measuring the

performance the manager compares the actual performance with the
planned performance and standard. If there is match in both then the
controlling function ends. But if there is mi deviation then the manager
tries to find out the correct measures of deviation.

4. Analysing deviations: It is the difference between actual performance

and planned performance.
2 types of analysing deviation are:

• Critical point control: It means keeping focus on some key areas and
if there is any deviation in these areas, then it must be attended
urgently. Key areas are those which impact on whole organisation.

[4]
 • Management by exception: the deviations are handled by managers
and minor deviations can be ignored.
Advantages/Merits of Management by Exception (MBE):
a. It saves time and efforts of managers
b. It differentiates between critical and simple problems.
c. No wastage of time and energy of managers to solve routine
problems.
5. Taking corrective measures: On comparing the actual performance
with the planned performance, if there is any deviation between them
manager taking corrective measures.
6. Feedback in Controlling: The controlling function does not end by
taking corrective measures. After taking corrective measures a
feedback report is prepared

[5]