Managerial Control

Nature, Process, Types, Techniques & Observations

Gurpreet Singh
2023A11M
M.Sc.(Agriculture)- Agricultural Extension Education
Department of Agricultural Extension Education
 Managerial Control- Meaning & Definition
• Managerial Control is a management process to aim at achieving defined goals
within an established timetable, and comprises of three components: (1) setting
standards, (2) measuring actual performance, and (3) taking corrective
action.

• Controlling is a management function, whose essence is the measurement and

correction of the tasks performed by subordinates, and therefore it is needed to
assess their performance.

• Controlling coordinates the whole process of planning, control and reporting

thereby directing the organizations to realization of its objectives.

• Controlling is the process of measuring and assessing the current state of the
organizations in relation to agreed objectives, plans, standards and budgets.
 Nature of Managerial Control
1. Control is a goal-oriented function of management. It aims at ensuring that the resources of
the organization are used effectively and efficiently for the achievement of pre-determined
organizational goals.

2. Control is a continuous process. It means that the firms have to continuously review the
performance and revise the standards.

3. Control is all-pervasive. It means that the controlling function is exercised by the firms at all
levels of management. The extent of control and nature of the function may vary at every
level.

4. Control process is both a forward-looking and backward-looking function. As a forward-

looking function, it aims at improving the future performance of an organization on the basis
of its past experiences. However, as a backward-looking function, it measures and compares
the actual performance and planned performance (fixed in past) of the organization.
 Process

Process
Control

Setting Measurement Comparison Taking

Analyzing
Performance of Actual with Corrective
Deviations
Standards Performance Standards Actions
 Process
Step I : Setting Performance Standards
An organization should clearly define its standards to the employees and must establish
attainable, understandable, and realistic standards to be achieved.

Step II : Measurement of Actual Performance

The actual performance of an organisation can be measured through different
techniques such as sample checking, personal observation, etc., and should be
measured in the same units in which the standards are fixed to make the comparison
easy.

Step III : Comparison of Actual Performance with Standards

By comparing the actual performance with the standards, an organization can
determine the deviation between them.
 Process
Note: If the actual performance of the organization matches with the set standards, then the controlling process ends after the third
step, which means that everything is in control of the firm. However, if the actual performance of the organization does not
matches with the set standards, then there are two more steps in the process.

Step IV : Analysing Deviations

The actual performance and set standards of an organization rarely match with each
other. Therefore, the fourth step of the process of controlling is to analyze the
deviations. an organization should focus more on the significant deviation and less on
the minor deviations.

Step V : Taking Corrective Action

If the deviations are within the acceptable limits set by the managers, then there is no
need to take corrective action. However, if the deviations go beyond the set acceptable
limit in the key areas, then proper and immediate managerial actions are required. An
organization can easily rectify the defects in the actual performance through the
corrective steps.
 Types
There are Three types of Control:-

• Feedforward Control:- It is a preventive control system that will let you prevent problems before
their occurrence. Pre-control predicts problems that you may face in the future and also tries to
identify steps to resolve such problems. Organization’s policies, strategies, and procedures are
examples of pre-control systems.

• Concurrent Control:- Concurrent control takes place during the work process. In this system, if a
problem occurs during the course of work, it is identified and analyzed as soon as possible and
solved immediately. The main purpose of real-time control is to solve problems before they become
major issues.

• Feedback Control:- In feedback control, after the projects or activities are completed analysis and
observation take place. Identification of whether or not the projects meet the standard is identified.
If standard and actual performance matches the same strategy may be applied in the future. And, if
they do not match, managers take the base of past performance to take better future actions.
 Techniques of Control

• Traditional Techniques
• Personal Observation
• Statistical Reports

Control
• Break Even Analysis
• Budgetary Control
• Modern Techniques
Techniques • Return on Investment
• Responsibility Accounting
• Management Audit
• PERT & CPM
 Techniques of Control
• Traditional Techniques
1. Personal Observation:- In this technique, the manager makes psychological pressure on
the employees to perform well their objectives and they are observed personally on their
job. However, it is a very time-consuming exercise & cannot effectively be used for all
kinds of jobs.

2. Statistical Reports:- Statistical reports can be defined as an overall analysis of reports

and data which is used in the form of averages, percentage, ratios, correlation, etc.,
present useful information to the managers regarding the performance of
the organization in various areas.

3. Break- even analysis:- The sales volume at which there is no profit, no loss is known as
the break- even point. There is no profit or no loss. Break- even point can be calculated
with the help of the following formula,
Break- even point = Fixed Costs/Selling price per unit – variable costs per unit
 Techniques of Control
4. Budgetary Control:- Budgetary control can be defined as such technique of
managerial control in which all operations which are necessary to be performed are
executed in such a manner so as to perform and plan in advance in the form of budgets
& actual results are compared with budgetary standards.

• Modern Techniques
1. Return on Investment:- It provides the basics and guides for measuring whether or
not invested capital has been used effectively for generating a reasonable amount of
return. ROI can be used to measure the overall performance of an organization or of
its individual departments or divisions.

2. Responsibility Accounting:- Responsibility accounting can be defined as a system of

accounting in which overall involvement of different sections, divisions &
departments of an organization are set up as ‘Responsibility centers’. The head of the
center is responsible for achieving the target set for his center.
 Techniques of Control

3. Management Audit:- Management audit refers to a systematic appraisal of the

overall performance of the management of an organization. The purpose is to review
the efficiency & effectiveness of management and to improve its performance in
future periods.

4. PERT & CPM:- PERT (Program Evaluation & Review Technique) & CPM (Critical
Path Method) are important network techniques useful in planning & controlling.
These techniques, therefore, help in performing various functions of management like
planning; scheduling & implementing time-bound projects involving the performance
of a variety of complex, diverse & interrelated activities.
 Observations in Managerial Control

In the context of managerial control, observations refer to the systematic monitoring and
examination of various aspects of an organization's activities, processes, and performance
to ensure that they align with established goals and objectives. Here are some key
observations in managerial control:

1. Performance Monitoring: Managers observe and assess the performance of

individuals, teams, and the overall organization. This includes evaluating key
performance indicators (KPIs) and comparing actual performance against established
targets.

2. Process Observation: Managers observe and analyze the various processes within the
organization. This involves assessing whether processes are being followed efficiently,
identifying bottlenecks, and seeking opportunities for improvement.

3. Financial Observation: This involves monitoring financial data such as budgets,

 Observations in Managerial Control
4. Quality Control: Observations are made to ensure that products or services meet
established quality standards. This may involve inspecting outputs, reviewing
customer feedback, and implementing quality assurance measures.

5. Employee Observation: Managers observe employee behavior, productivity, and

overall engagement. This can include monitoring attendance, evaluating teamwork,
and addressing any issues related to employee performance.

6. Market Observation: Managers observe changes in the external environment,

including market trends, customer preferences, and competitor activities. This
information helps in adjusting strategies to remain competitive.

7. Risk Observation: Managers observe potential risks to the organization, both internal
and external. This includes identifying and assessing risks and implementing
strategies to mitigate or manage them.
 References

1. Bhasin, Hitesh. "Management Control: Meaning, Types, & Features of Management

Control." Marketing91, 18 Oct. 2019, www.marketing91.com/management-control/.

2. Keup, Megan. "Controlling Process Steps in Business Management." Project Manager, 1

Dec. 2021, www.projectmanager.com/blog/controlling-process-steps.

3. Mahesh. "3 Types of Controlling in Management." BokasTutor, 3 Jun. 2023,

bokastutor.com/types-of-controlling/.

4. "Techniques of Managerial Control." Topper,

www.toppr.com/guides/business-studies/controlling/techniques-of-managerial-control/.
SYMBOL OF TRUST