Controlling in Management: Definitions, Dimensions, Resistance, Importance, Limitations

Thus, control ensures what is done is what is intended. It is to be exercised by everyone in the organization, from top level to bottom level.

‘Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished’. – Harold Koontz

Learn about:- 1. Introduction to Controlling 2. Meaning and Definitions of Controlling 3. Features of Controlling 4. Steps 5. Importance 6. Areas 7. Elements of an Effective Control System 8. Qualities 9. Tools

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10. Principles 11. Timings for Implementing Controls 12. Necessity 13. Critical Areas 14. Elements 15. Problems 16. Reasons 17. Ways 18. How Manager Exercises Controlling

19. Relationship between Planning and Controlling 20. Limitations 21. Measures.

Controlling in Management: Meaning, Definitions, Nature, Steps, Dimensions, Scope, Necessity, Resistance, Tools, Problems, Limitations and Importance

Contents:

Introduction to Controlling
Meaning and Definitions of Controlling
Features of Controlling
Steps of Controlling
Importance of Controlling
Areas of Controlling
Elements of an Effective Control System
Qualities of Controlling
Tools of Controlling
Principles of Controlling
Timings for Implementing Controls
Necessity of Controlling
Critical Areas of Controlling
Elements of Controlling
Problems of Controlling
Reasons of Controlling
Ways of Controlling
How Manager Exercises Controlling
Relationship between Planning and Controlling
Limitations of Controlling
Measures of Controlling

Controlling in Management – Introduction

Exercising control is a universal and important managerial challenge. As the organization grows in size, complexity of control grows as well. The term control involves regulation of activities, resources and behaviour. Policemen regulating the traffic, control rooms regulating the movement of vehicles, evaluation of students by conducting examination, inspection of men, money and materials, audit of books of accounts, recording check in and check out through swipe cards etc., represent control activities.

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As far as managerial control is concerned, the term control connotes measurement of accomplishment against the standard and correction of deviation to ensure attainment of objectives according to plans. It is a continuous process. Earlier managers thought that control function is needed only when something went wrong. But it is not so. It is concurrent and continuous though it is listed as the last function in the functional hierarchy.

Control does not wait till the wheels derail but it seeks to prevent the wheel from going off the track. The negative connotation of control is to find out the person who is responsible for failure and punish him/her. The very primary object of control is to highlight variations and make correction. Therefore, it is a positive function.

Controlling in Management – Meaning and Definitions

Control is one of the managerial functions like planning, organizing, staffing and directing. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner.

According to modern concepts, control is a foreseeing action whereas earlier concept of control was used only when errors were detected. Control in management means setting standards, measuring actual performance and taking corrective action. Thus, control comprises these three main activities.

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The management process will be incomplete and become useless without the control function. Control is a tool that helps an organization measures and compares its actual progress with the established plan. Thus, control ensures what is done is what is intended. It is to be exercised by everyone in the organization, from top level to bottom level.

Definitions of Controlling:

‘Management control is a systematic effort to set performance standards with planning objectives, to design information feedback systems, to compare actual performance with these predetermined standards, to determine whether there are any deviations and to measure their significance, and to take any action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives’. – Robert J. Mockler

‘Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from recurring’. – Henry Fayol

‘Control is checking current performance against predetermined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance’ – EFL BRECH

‘Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished’. – Harold Koontz

‘Management is the profession of control’ – Stafford Beer

From these definitions it can be stated that there is close link between planning and controlling. Planning is a process by which an organization’s objectives and the methods to achieve the objectives are established, and controlling is a process which measures and directs the actual performance against the planned objectives of the organization. Thus, planning and control are often referred to as siamese twins of management.

Controlling in Management – 5 Features

1. It seeks planned results from the subordinates enabling manager to have effective control over subordinates’ activities.

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2. It is a goal-oriented function of management. It measures the progress of activities, finds deviations if any and initiates corrective action to accomplish goals as per the plans.

3. It is present at all levels of management and in all types of business or non-business organisations therefore, controlling is a pervasive function.

4. It completes the cycle of management process and provides basis for improvement in planning in the next cycle. Therefore, it is a continuous process.

5. Controlling is both backward and forward looking function. As a backward function it measures and compares actual performance with standards set in the past. As a forward looking function it provides basis for improvement in planning for the future.

Controlling in Management – 5 Basic Steps Involved in the Control Process

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The basic control process consists of the following five steps:

Step # 1. Establishment of Standard:

First step in establishing control system is setting standards. Standards serve as a basic for measuring performance. They may be expressed in quantitative or qualitative terms. A standard is a criterion against which results can be measured. In quantitative terms they are expressed in numbers.

For example, number of units to be 4 produced by workers, the cost of production, cost of distribution per unit, etc. Therefore, the planner has to set the standards which must be valid, understandable and acceptable and state clearly to workers from whom the results are expected.

Step # 2. Measurement of Performance:

The second important element in the process of control is the measurement of the actual performance. It is not only knowing what has happened but also what is likely to happen. It means that deviations are to be predicted in advance to take corrective action in advance for the achievement as soon as the operations are completed. Concurrent control, i.e., it should also be measured while the activity is in the course of operation which makes the appraisal possible in time.

Step # 3. Appraisal of Performance:

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Comparing the actual performance with the standards is known as appraisal. If the standards are properly determined and methods are clearly communicated measurement of performance becomes easier. The manager should concentrate on major deviations while making the appraisal of performance and should not waste his time and energy on small deviations. This approach will give the correct, quick and favourable results.

Step # 4. Finding out Deviations:

While comparing the actual with standard, it is necessary to find out the extent, nature and the basic causes for deviations. To find out the cause of deviations one has to depend on proper, accurate and timely information. A manager after getting the information from various departments can easily find out the causes of deviations and the persons who are responsible for such errors.

Step # 5. Remedial Measures:

The last but riot the least element in the process of control is Remedial actions. Correction of deviations involve improvement in technology, direction, supervision, setting new goals, restructuring the organization and revision of targets, set in advance. If corrective action is not taken properly in time against the major deviations then it will lead to heavy losses.

Controlling in Management – Importance

1. It is an Essential Function of Every Manager:

Control is an essential function of every manager. It is such a managerial function where every manager from the president to the first line supervisor makes sure that what is done will be that what is intended. The nature, scope and level of control will be governed by the level of manager exercising it. The area and scope of control is also determined by the authority and responsibility of management.

2. Control is a Continuing Activity:

Managerial Control is a continuing activity. A manager can be successful only when he controls the men and circumstances around him on regular basis. The business circumstances are also continuously changing, so management must adopt proper techniques for control.

3. Control is Forward Looking:

Eminent authors of management are of this opinion that planning is looking ahead and control is looking behind. But the reverse of this statement is also true. The nature of managerial control is also forward looking because on the basis of evaluation of part performance the future guidelines can be prepared. It prevents deviations from occurring by anticipating their occurrence and taking suitable action beforehand.

4. Control Implies the Existence of Goals and Plans:

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It is generally said that the process of control maintains pre-determined objective, plans, policies and procedure etc. They all do not control the results but they play an important role in a control system. Without objectives and goal, the results are likely to be other than desired. Plans complement objectives and purpose how the objectives are to be attained.

Policy is a statement of intention of an enterprise to act is some specific ways under certain circumstances usually recurrent. Control is checking to ascertain whether the assignment is being executed in the desired manner and taking action on the basis of the related information.

5. Control is People-Oriented:

R. C. Davis has said that the approach of managerial control is people-oriented. Control is attained through people and not “things”. It is people who achieve control or who distort planned results. Subjective attitudes of people are more important for the success of control than objective figures about performance.

Controlling in Management – 11 Most Important Areas of Controlling

The scope of control is very wide. A well designed plan of control covers almost all management activities.

According to Holden, Fish and Smith, the main areas of control are as follows:

1. Control over Policies:

The success of any business organization to a large extent depends upon that how far its policies are implemented. Hence, the need of control over policies is self- evident, in many enterprises; policies are controlled through policy manuals.

2. Control over Organization:

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Control over organization is accomplished through the development of organization chart and organization manual. Organization manual attempts at solving organizational problems and conflicts. Making long – range organization planning possible, enabling rationalization of organization structure, helping in proper designing of organization and departments.

3. Control over Personnel:

The statement that management is getting the work done through people, underlines sufficiently the importance of control of personnel. All employed working at different levels must perform their assigned duties well and direction of their efforts and controlling their behaviour is the process of control over personnel. Personnel director or personnel manager prepares – control plan for having control over personnel.

4. Control over Wages and Salaries:

Such type of control is done by having programme of job evaluation and wage and salary analyses. This work is done either by personnel department of industrial engineering department. Often a wage and salary committee is constituted to help these departments in the task of controlling wages and salaries.

5. Control over Costs:

Cost control is experienced by the cost accountant by setting cost standards for material, labour and over-heads and making comparison of actual cost data with standard cost. Cost control is supplemented by budgetary control system.

6. Control over Methods:

Control over methods is accomplished by conducting periodic analysis of activities of each department. The functions performed, method adopted and time devoted by every employee is studied with a view to eliminate nonessential motions, functions and methods.

7. Control over Capital Expenditure:

It is exercised through a system or evaluation of projects, ranking of projects in terms of their ranking power and appropriating capital to various projects. A capital budgeting committee reviews the projects proposed and approves the projects of advantages to the firm, capital budgeting, project analysis, break even analysis, study of cost of capital, etc., are same popular techniques of control over capital expenditures.

8. Control over Production:

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Control over production is effected through studies about market needs, attitude of customers and revision in product lines. Efforts are made of simplify and rationalize the line of products. Such efforts serve as control measures. Routing, scheduling, dispatching, follow up, inventory control inspection and quality control are some popular techniques of production control.

9. Control over Research and Development:

Such activities are highly technical in nature so no direct control is possible over them. By improving the ability and judgment of research staff through training programmes and other devices, an indirect control is exercised on them. Control is also exercised by having a research budget in the business.

10. Control over External Relations:

Public relations department is responsible for controlling the external relations of the enterprise. It may prescribe certain measures for other operating departments which are instrumental in improving external relations.

11. Overall Control:

It is effected through budgetary control Master Plan is prepared for overall control and all the departments are made involved in this procedure. For effective control through the master plan, active support of top-management is essential.

Controlling in Management – Elements of an Effective Control System

Control is an essential feature of successful management much of precision of a managerial education is focused on the improvement of control techniques. Control is a process that guides activity towards some pre-determined goal.

To achieve the desired one, the following are the important requirements for making any control system effective:

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1. Direct Control:

Modern system of control is employee-oriented rather than work-oriented. Control should be exercised on people who had machine and materials. People generally oppose the control measures, so their attitude should be made to change by proper education about control and its significance.

2. Control by Objectives:

The control must be goal oriented and by objectives. As objectives clarify the expected results in meaningful and realistic terms, they provide the control standards with which actual performance can be measured. The control system should be according to the nature and needs of organisations.

3. Control should be Forward Looking:

Control must be forward looking in character. It should bring out the deviation in light at an earliest. It must focus on strategic points with exceptions.

4. Control should be Simple and Balanced:

Control must be simple and balanced in nature. A control device that is not intelligible cannot be practiced by the manager. So control tools must be simple and intelligible to both – controller and controlled.

5. Managerial Self-Control:

Control is effected through managerial positions in the organisation structure. So each managerial position must be vested with adequate authority for exercising control. Allocation of fixed duties and responsibilities goes a long way towards securing effective control in the organisation.

6. There should be Flexibility in Control:

Control system should provide for some change but its basic structure must be retained. It has been seen that even the best plans and other pre-determined criteria need to the changed from time to time.

7. Economy in Control:

Economy is an important requirement of any control system. It is a truism to state the control must be worth its results. A simple control procedure proves too economical.

8. Feedback System:

Feedback is the process of adjusting future actions based upon information about past performance. Recently the concept has received attention very much. It shows the worth and utility of control process.

9. Control should not be Negative:

It must be positive and constructive. It must be helpful. Control is not a command. It is a guidance. The management should recognise the importance of human beings in control systems.

In the words of Ultrich, Learned and Booz – “The meaning which people give a control system in terms of their own outlook is as critical as the technical design of the system.”

Controlling in Management – 10 Major Qualities of an Effective Control System

Effective control systems tend to have certain qualities in common.

These can be stated thus:

Quality # 1. Suitable:

The control system must be suitable to the needs of an organization. It must conform to the nature and needs of the job and the area to be controlled.

For example, the control system used in production department will be different from that used in sales department.

Quality # 2. Simple:

The control system should be easy to understand and operate. A complicated control system will cause unnecessary mistakes, confusion and frustration among employees. When the control system is understood properly, employees can interpret the same in a right way and ensure its implementation.

Quality # 3. Selective:

To be useful, the control system must focus attention on key, strategic and important factors which are critical to performance. Insignificant deviations need not be looked into. By concentrating attention on important aspects, managers can save their time and meet problems head-on in an effective manner.

Quality # 4. Sound and Economical:

The system of control should be economical and easy to maintain. Any system of control has to justify the benefits that it gives in relation to the costs it incurs. To minimize costs, management should try to impose the least amount of control that is necessary to produce the desired results.

Quality # 5. Flexible:

We live in a world of supersonic changes. Competitive, technological and other environmental changes force organizations to change their plans. As a result, control should be necessarily flexible. It must be flexible enough to adjust to adverse changes or to take advantage of new opportunities.

Quality # 6. Forward Looking:

An effective control system should be forward looking. It must provide timely information on deviations. Any departure from the standard should be caught as soon as possible. This helps managers to take remedial steps immediately before things go out of gear.

Quality # 7. Reasonable:

According to Robbins, controls must be reasonable. They must be attainable. If they are too high or unreasonable, they no longer motivate employees. On the other hand, when controls are set at low levels, they do not pose any challenge to employees. They do not stretch their talents. Therefore, control standards should be reasonable — they should challenge and stretch people to reach higher performance without being de-motivating.

Quality # 8. Objective:

A control system would be effective only when it is objective and impersonal. It should not be subjective and arbitrary. When standards are set in clear terms, it is easy to evaluate performance. Vague standards are not easily understood and hence not achieved in a right way. Control should be accurate and unbiased. If they are unreliable and subjective, people will resent them.

Quality # 9. Responsibility for Failures:

An effective control system must indicate responsibility for failures. Detecting deviations would be meaningless unless one knows where in the organization they are occurring and who is responsible for them. The control system should also point out what corrective actions are needed to keep actual performance in line with planned performance.

Quality # 10. Acceptable:

Controls will not work unless people want them. They should be acceptable to those to whom they apply. Controls will be acceptable when they are- (i) quantified, (ii) objective (iii) attainable and (iv) understood by one and all.

Controlling in Management – Tools of Controlling Available to Modern Management

The tools of control available to modern management are as follows:

1. Budgetary Control.

2. Cost Control.

3. Statistical Control.

4. Work Measurement and Production Control.

5. Quality Control.

6. Financial Control, and

7. Documentation.

Single line notes on each are given here:

1. Budgetary control supplies quantitative data for various sections.

2. Cost control will permit you to determine the limits of expenditure and to see that they are not exceeded.

3. Statistical control ensures that the figures are supplied at the right time.

4. Work measurement and Production control enables you to check work values.

5. Quality control ensures that standards will be maintained.

6. Financial control will keep tight grip on money.

7. Documentation makes sure that you have the information as and when you want it and in usable form.

In conclusion it may be repeated that control function is performed by all levels of managers and supervisors. Management control reinforces the executive whom it serves. It multiplies his effectiveness. It tells him what kind of a job he really did. It helps uncover errors made while pursuing the plans or deviating from them. It gives information in clear-cut facts and figures. There is no hunch, no guess work, and no opinions. It evaluates facts.

It gauges actual performance against plans. It interprets results. It adds recommendations on how to prevent weak spots and avoid pit falls in the future. Finally, it supplies practical ideas on how to proceed to make an ever-better record of profit and service and it channels them back into the planning phase. Consequently, an effective control results in an efficiently run organisation, smooth flowing and trouble-free productive capacity, and a happy and contented staff.

Controlling in Management –Top 4 Principles according to Lyndall Urwick: Uniformity, Comparison, Utility and Exception

Lyndall Urwick has given four principles of managerial control viz., the principle of uniformity, the principle of comparison, the principle of utility and the principle of exception.

The principles are briefly explained here under:

Principle # 1. Uniformity:

The main aim of control is to get the best work performance. This can be achieved with the principle of uniformity. It requires the presentation of information, figures and reports for control purposes in terms of organization structure. The principle of parity between authority and responsibility should also be followed.

Principle # 2. Comparison:

This implies that all information and reports used for control should be in terms of standard of performance. The aim of comparison is not only to check the deviation but to make a manager to predict future results. An efficient control system should provide quick comparison so that the manager of control can attend to possible trouble while the operation is in control.

Principle # 3. Utility:

It implies the importance of reports for control changes directly with the suitability of the period covered by report keeping in view of the purpose of control. A manager can be successful in controlling by uniting the ideas of men around him.

Principle # 4. Exception:

The exception principle holds that the manager should devote greater time to the strategic points of unusual time. Maximum control can be obtain if critical points are identify and a close attention is paid to them. Good control does not necessarily mean maximum control which is often expensive. So, principle of exception is important.

Controlling in Management – Timings for Implementing Controls: Feed Forward Control (Pre-Action Controls), Concurrent Control and Feedback Control (Post Action Controls)

Management can implement controls before an activity commences, while the activity is going on, or after the activity has been completed. The first type is called feed forward control, the second is concurrent control, and the last is feedback control.

1. Feed Forward Control (Pre-Action Controls):

It is an approach to control the performance of an organisation that attempts to forecast the future state of affairs and to take the necessary action before problems arise. It is called feed forward control because it takes place in advance of the actual activity.

Scheduled preventive maintenance programs for aircraft that major airlines are required to have are a form of feed forward control. They’re designed to detect and hopefully prevent structural damage that might lead to a tragic crash. Another example of pre-action control is budget. It ensures that before an action is undertaken the necessary human, material, and financial resources have been estimated so that when the time for action occurs, the requisite resources will be available in the types, quality, quantities, and locations needed.

The key to feed forward controls, therefore, is taking managerial action before a problem occurs. Feed forward controls are desirable because they allow management to prevent problems rather than having to cure them later. However, these controls require timely and accurate information that is often difficult to develop. As a result, managers frequently have to rely on the other two type’s controls.

2. Concurrent Control:

Concurrent control, as its name implies, takes place while an activity is in progress. The best-known form of concurrent control is direct supervision. When a manager directly oversees the actions of a subordinate, the manager can concurrently monitor the employee’s actions and correct problems as they occur.

When control is enacted while the work is being performed, management can correct problems before they become too costly. Although there’s obviously some delay between the activity and the manager’s corrective response, the delay is minimal.

3. Feedback Control (Post Action Controls):

The most popular type of control relies on feedback. As the term suggests, post-action controls measure the results after the activity is done. The focus is on results of operations. Examples of feedback controls include periodical (weekly, monthly, quarterly, annual) reports.

They guide future planning, inputs and process designs. Post-action controls are also used as a basis for rewarding or encouraging employees, For example- meeting a standard may result in a bonus. The major drawback of this type of control is that by the time the manager has the information, the damage is already done.

Controlling in Management – Necessity of Control in Business Organisation

Necessity of control in business organization arises due to a number of factors. One is complexity of organizations themselves. The larger the organization, the more difficult is the control process with respect to overall results. This is because the control process requires establishment of clear standards of performance, ensuring and measuring performance against these standards which present difficulties. Moreover, an executive exercising control also needs all kinds of timely information, etc., collection and presentation of which are also not easy.

The second factor is the general psychological makeup of human beings. It is, for example, a matter of common experience that in the absence of any control, individuals become lax in their efforts and if this situation continues, they tend to get accustomed to a level of performance far below normal.

Again, absence of control may lead to a lowering of moral among employees, since they cannot predict what will happen to them. They may begin to suspect that in the absence of clear standards of performance and, therefore, absence of control, they may become victims of the whims of their superiors. Some of them may be shown partiality and favouritism, whilst others undue harshness.

The third factor is the existence of may temptations in business. Employees have to be trusted with large sums of money, with valuable raw materials, and more valuable trade secrets. Managers are vested with authority and discretion to use it. In the absence of control, there is a greater likelihood of yielding to various temptations. Existence and operation of an efficient system of control, however, creates an atmosphere of order and discipline, and helps in minimizing chances of dishonest behaviour on the part of employees.

Controlling in Management – Critical Areas which have Significant Performance of Various Departments

In a large, multi-product, multi-plant and multi-location organisation, it is not possible to check everything and initiate timely, remedial steps whenever things go off the track. Managers, therefore, focus attention on key or critical areas which have a significant bearing on the performance of various departments in an organisation.

The following ways have been found to be relevant in this regard:

1. Critical or Strategic Point Control:

It is neither economical nor easy to check each and every operation in an organization. Control, to be effective, should be focused on key result areas which are critical to the success of an enterprise. So, management while reviewing standards must pick some strategic points that reflect the entire organization. The strategic points are so important that if anything goes wrong there, the entire organization suffers almost immediately.

Important Features of Strategic Points:

i. A central point is established for every key operation or event. For example, in a factory time keeper should check the time of a worker’s every day into the factory. The time keeper is usually placed at the very gate of the factory. As far as the punctuality is concerned the gate is the strategic and central point. Similarly in a manufacturing firm, quality control department is the central point to determine the efficiency of output.

ii. Central points must be comprehensive and economical. They are comprehensive in the sense they include all sub-operations in the operation. Economy is also sought because each and every item produced need not be checked or verified. Checking at strategic points brings economy also.

iii. Strategic points are generally balanced in the sense equal importance is given to both qualitative and quantitative factors. For example, Marketing and Personnel should receive equal weight in setting standards. In essence, standards must also be set for staff experts’ along with the line managers.

Managers as a rule, should focus attention on deviations at strategic points only. This will help them in setting things right without loss of time, energy and resources.

2. Management by Exception (MBE):

According to this principle a manager should give more attention to unusual or exceptional items. Only important deviations from established standards should be brought to the notice of management. If the actual performance is within an acceptable range of deviation from the standards (say 5 per cent) it need not be reported to management as no remedial action is required.

However, in case of a major deviation from the standard, the matter has to receive the immediate attention of management on a priority basis. The principle highlights the importance of the statement that if you want to control everything, you end up controlling nothing. So, better focus on key deviations and leave the minor ones to be taken care of at lower levels.

The importance of MBE stems from the big size of business and the consequences of complexity in operations. MBE is a very effective approach in controlling the modern organization. MBE should not be mistaken as management by crisis. “If MBE slips into management by crisis, then disastrous results follow; organization heads for breakdown in control and planning”.

MBE offers the following benefits:

(i) It saves time (it is a time-saving technique.)

(ii) It identifies critical problem areas.

(iii) It stimulates communication.

(iv) It reduces the frequency of decision-making.

(v) It leads to concentration of effort on important things.

(vi) It makes use of more knowledge and data.

(vii) It is necessary in big organizations.

The two principles listed stress the same thing, i.e., the top management must focus on important issues and leave the routine things to people at lower levels. The difference between the two principles is somewhat subtle in nature. In critical point control the manager concentrates attention on strategic or key activities but in the exception principle the manager is chiefly concerned with deviations regardless of the fact where they occur.

Controlling in Management – Elements Involved in Controlling

Regardless of what is being controlled, these elements are always involved.

The meaning and purpose of control, therefore is:

1. Knowing exactly what work is to be done as to (a) Quantity; (b) Quality; (c) Time available.

2. Knowing what resources are available for doing that work as to (a) Personnel, (b) Materials, (c) Other facilities.

3. Knowing that the work has been done or is being done (a) With the resources available; (b) Within the time available; (c) At a reasonable cost; (d) In accordance with required standard of quality.

4. Knowing immediately of any delays, hold ups, or variations as to (a) What happened; (b) Why it happened; (c) Remedial action.

5. Knowing what is being done to remove such hindrances as to (a) Who is doing it; (b) How is it being done; (c) What is it costing; (d) When will it be completed.

6. Knowing about the completed work as to (a) Time finished; (b) Quality; (c) Final Cost.

7. Knowing that recurrences are guarded against (a) In what way; (b) By whom; (c) At what cost; (d) With what provision for periodic inspection.

The first thing to do is to design the control system to cover these purposes of control and the three elements noted above. Control Standards should be set. The first step in doing that is to be clear about the results we desire. What shall we accept as satisfactory performance? What is the level of achievement or ‘par’? The second step is the evaluation of performance.

This involves measuring the work that is done in terms of the control standards, and communicating the appraisal to persons who can take corrective action. This control information must also be sent to the man whose work is being controlled. For instance it should go to the purchaser who decides how much to buy, to the foreman who decides when overtime work is necessary, or to the salesman who may be able to secure additional orders for slow-moving products.

Control reports call attention to deviations of performance from plans. The real thing happens when corrective action is taken. For instance, if the operation situation has shifted from what was planned- perhaps raw materials were defective or a machine breaks down – we will take steps to get the working conditions back to normal. If our subordinates are ineffective, we will clarify our directions to them, provide additional training where necessary, consider motivational lacks, and perhaps re-assign work.

Control is a continuous process, and the manager should assure himself at every step that his enterprise or department is functioning in accordance with plans, and if it is not, revise plans to return his unit to the intended action. Action is implied in each case. Action is the essence of control. Control means action – action to correct a condition found to be in error, or action to prevent such a condition from arising.

Controlling in Management – Problems

1. Planning- The perfect plan could be outlined if every possible variation of input could be anticipated and if the system would operate as predicted. But it is neither realistic, economical, nor feasible for most business systems.

2. If it were feasible, planning requirements would be so complex that the system would be out of date before it could be operated. Therefore, we design control into systems.

3. This requires more thought in the systems design but allows more flexibility of operations and makes it possible to operate a system using unpredictable components and undetermined input. Still, the design and effective operation of control are not without problems.

4. The objective of the system is to perform some specified function. The purpose of organizational control is to see that the specified function is achieved; the objective of operational control is to ensure that variations in output are maintained within prescribed limits. It is difficult thing to design a system that contains all of the elements of control.

5. Measurement of Output- When objectives are not quantified, the measurement of system effectiveness is difficult to make.

6. Many of the characteristics pertaining to output do not lend themselves to quantitative measurement. This is true when inputs of human energy cannot be related directly to output.

7. The same problem applies to machines and equipments associated with human involvement, when output is not in specific units.

8. In evaluating man-machine or human-oriented systems, psychological and sociological factors obviously do not easily translate into quantifiable terms. For example, how does mental fatigue affect the quality or quantity of output? And, if it does, is mental fatigue a function of the lack of a challenging assignment or the fear of a potential injury?

9. Subjective inputs may be transferred into numerical data, but there is always the danger of an incorrect appraisal and transfer, and the danger that the analyst may assume undue confidence in such data after they have been quantified.

Let us suppose, for example, that the decisions made by an executive are rated from 1 to 10, 10 being the perfect decision. After determining the ranking for each decision, adding these, and dividing by the total number of decisions made, the average’ ranking would indicate a particular executive’s score in his decision-making role. On the basis of this score, judgments—which could be quite erroneous— might be made about his decision-making effectiveness.

One executive with a ranking of 6.75 might be considered more effective than another who had a ranking of 6.25, and yet the two managers may have made decisions under different circumstances and conditions. External factors over which neither executive had any control may have influenced the difference in “effectiveness”

1. Quantifying human behavior, despite its extreme difficulty, subjectivity, and imprecision in relation to measuring physical characteristics is the most prevalent and important measurement made in large systems. The behavior of individuals ultimately dictates the success or failure of every man-made system.

2. Information flow- Another problem of control is the improper timing of information introduced into the feedback channel. Improper timing can occur either by mistakes in measurement or in judgment. A system generating feedback inconsistent with current need will tend to fluctuate and will not adjust in the desired manner.

3. The most serious problem in information flow arises when the delay in feedback is exactly one-half cycle, for then the corrective action is superimposed on a variation from norm which, at that moment, is in the same direction as that of the correction. This causes the system to overcorrect, and then if the reverse adjustment is made out of cycle, to correct too much in the other direction, and so on until the system fluctuates (“oscillates”) out of control.

4. Setting Standards- Setting the proper standards or control limits is a problem in many systems. Parents are confronted with this dilemma in expressing what they expect of their children, and business managers face the same issue in establishing standards that will be acceptable to employees.

5. Standards should be as precise as possible and communicated to all persons concerned. In human systems, standards tend to be poorly defined and the allowable range of deviation from standard also indefinite. For example, how many hours each day should a professor is expected to be available for student consultation? Or, what kind of behavior should be expected by students in the classroom? Discretion and personal judgment play a large part in such systems, to determine whether corrective action should be taken.

6. The most difficult problem in human systems is the unresponsiveness of individuals to indicated correction. This may take the form of opposition and subversion to control or it may be related to the lack of defined responsibility or authority to take action.

Controlling in Management – 11 Important Requirements for Effective Control

1. Control Should Reflect Plans, Position and Structures:

It should provide relevant information about the progress of plans. It should be tailored to positions. Control techniques appropriate to the department or position should only be used. Control system should clearly indicate the responsibility position. It will help the manager to make corrections as and when necessary. Organizational structure establishes authority and responsibility relationship of individuals in the organizations. The more the relationships are clear and definite, the easier it will be to correct deviations from standards.

2. Control Should Be Designed to Suit Individual Managers:

Control should be designed to suit to individual managers and their personalities. Control system should facilitate the manager in carrying out the control function. Unfortunately if the manager is unable to understand the control system it is useless. What is not understood cannot be used at all. Control should be designed to individual personalities also.

The requirements as to the kind of information and the manner of its presentation differ from individual to individual. Some individuals may like to have information in mathematical model form while some others may not prefer such information at all. So it is essential that information and control techniques should be comprehensible to the people who use them.

3. Control System Should Be Understandable:

Distrust arises on things which do not understand. Control should be designed in such a way that it is easily understood by all. Sophisticates control system may fail sometimes if the people who use it are not able to understand the same.

4. Control Should Be Objective:

Control should be objective and accurate. It is true that management contains many subjective elements but an individual’s work is not a matter for subjective determination. That is why objective standards are to be established. They may be quantitative or qualitative.

The quantitative standards may be prescribed in terms of cost or man-hour or date of job completion or number of units. The standard is said to be quantitative when aims at improving the quality of personnel. In both qualitative and quantitative standards, the standards are determinable and certifiable.

5. Control System Should Be Cost-Effective:

Cost involved in establishment of control system is an important consideration. If a system is tailored to the needs of an enterprise, it can probably be economical. It should derive more benefits than the cost involved. Efficient control system locates the deviations at minimum cost.

6. Control Should Identify Only Exceptions:

Control system should operate on Principle of Exception. It identifies only those areas which require manger’s attention.

7. Control System Should Be Flexible:

It must be flexible enough to accommodate the changes, if any. If an inflexible system operates, then another system has to be designed and implemented.

8. Control Should Lead to Corrective Action:

An adequate and effective control system should point out the reasons of failure, the persons responsible for them and assures that corrective action will be taken. If no corrective action is taken through appropriate planning, organizing, staffing, and directing, controls are not necessary.

9. Active Participation:

All members in the organization should participate in the effective implementation of the control system. This is only possible when each and every worker in the organization is asked to take active part in the discussions and exchange views while selecting the system of control.

10. Suggestive:

The control system should also be suggestive. A system which detects deviations only should not be held good, but it should also be able to tell the accurate and correct alternative.

11. Competent and Talented Staff:

A system of control can work more effectively if it has talented and competent people to work in the organization. Modern technology and a new system of operation can be introduced only when an organization has competent persons to operative them. A system of control should be adopting after taking into account the caliber, ability and the understanding power of the related managers and workers, only then the results will be in favour of the organization.

Controlling in Management – 6 Reasons due to which Resistance to Control Arises

Control should be viewed as a positive human behaviour. Yet, people do not always look at control in a positive way. They view it as a check on their activities which limits their freedom to work and, therefore, often resist control.

Resistance to control arises on account of the following reasons:

1. Inaccurate/Inappropriate Controls:

If controls are not related to goals, they are resisted by the employees. For example, if production department is asked to produce more without increasing the demand for raw material or sales department is asked to sell more without increasing the expenditure on advertisement; whatever measures of control are adopted by the management, they will not help in the attainment of goals (high production or sales). Such controls amount to inappropriate controls.

2. Excessive Controls:

Though controls are measures to increase the performance of employees, excessive controls can prove otherwise. Control or check on every activity of employees, for example, the way they talk, the way they work, the way they spend time during lunch break, persons with whom they interact (control on personal habits of employees) can restrict their performance rather than enhance it. Excessive controls restrict their freedom and reduce flexibility to work.

3. Unachievable Standards:

If the standards of performance are beyond the abilities and capacities of employees, employees may get frustrated and work below their capacities. A worker, for example, cannot work for more than 8 hours a day. Managers want him to work overtime for 2 hours. Even if the overtime has financial benefits, the worker may resist since it is beyond his capacities to work for 10 hours a day. If managers do not understand worker’s problems, he may actually start working for even less than 8 hours a day. Excessive controls can, therefore, suppress the creativity of employees.

4. Fear of Accountability:

In contrast to those who perform well, employees who cannot perform upto the standards also resist controls because of the fear of being punished by the superiors. The good and the poor performers, therefore, both resist controls either for loss of freedom to work or for the fear of accountability.

5. Unpredictable Standards:

If standards of performance keep on changing, sometimes high and sometimes low, workers will not be able to assess their performance against any predictable target and, therefore, will not be motivated to work. Any measure of control will not achieve the targets.

6. Lack of Authority over the Area of Control:

If supervisors are asked to increase the productivity of workers without the freedom or authority to issue directions, any measure of control would not get the desired output from workers. Control over areas for which authority is not given invites resistance.

Controlling in Management – 10 Ways to Overcome Resistance to Control

Way # 1. Explain to Workers the Need for Controls:

Workers should understand that controls are not just the means to achieve organisational objectives, they satisfy the needs of workers as well. If workers perform upto the standards of performance, they will be rewarded and rewards are always viewed as need satisfying motivators.

Way # 2. Change in Attitude:

Understanding that control is a positive and not a negative function can change attitude of workers towards the work environment and superiors. The focus of control should be at the right target. Right focus on physical, financial and human resources can change workers’ attitude towards controls from negative to positive.

Way # 3. Realistic Control:

Inadequate or excessive controls (under-control and over-control) affect organisational goals. While under-control gives excessive autonomy to work, over- control restricts the freedom to perform better. Managers must, therefore, exercise realistic controls which optimise workers’ performance.

Way # 4. Reasonable Standards of Performance:

Over-optimal or sub-optimal standards of performance which are either difficult to achieve or can be achieved easily should be avoided. Standards should be realistic which motivate the workers to perform better.

Way # 5. Revaluation of Controls:

Control process should be evaluated from time to time. If controls seem to be inappropriate at any point of time, alternate control system should be designed.

Way # 6. Focus of Attention:

Controls should focus more on the end results and outcomes of activities rather than the way these results are achieved. They should focus on improvement of behaviour rather than deviations.

Way # 7. Flexible Controls:

Controls may not always get desired results from the workers. Faulty standards can also cause deviation in performance rather than the performance itself. Controls should, therefore, be flexible and change according to need of the situation.

Way # 8. Participation of Employees:

When employees participate in designing the control system, they develop better understanding of the standards and self-assess their performance. Self-control is, in fact, the best control.

Way # 9. Controls should be Associated with a System of Reward:

Rather than penalising negative deviations, managers should reward employees who report acceptable performance. This will reinforce their behaviour and motivate other workers also to achieve the standard performance. Managers should adopt positive controls rather than negative controls. They should use measures like appreciation and rewards rather than threats and punishments.

Way # 10. Range of Control:

When workers work to achieve the targets, some amount of deviation in the performance may occur. Rather than commanding exact conformity to standards, a range of deviations should be allowed. Deviations of ± 5%, for example may be ignored by managers. The range of deviation depends upon the nature of products. It is less for costly products. Production of gems and jewellery for example, has to ensure more or less perfection to standards.

Controlling in Management – How a Manager Exercises Controlling

1. The purpose of a control mechanism is to assure the completion of all tasks:

(a) In the order planned,

(b) In the time schedule,

(d) By the person or persons to whom assigned.

2. The manager must see that:

(a) Flow of work is uninterrupted,

(b) Each duty is performed in proper sequence,

3. The manager must know:

(a) How each activity is to be accounted for?

(b) Who is accountable for each activity?

(d) If any department or part of the work is running behind schedule, in time to correct the situation.

4. Work running behind schedule may be due to:

(a) Sudden and unexpected increase in volume of work,

(b) Absence of employees assigned to that work,

(d) Ineffective supervision.

5. The manager should know daily for each department:

(a) Volume of work received,

(b) Quantity of work completed,

(d) Reasons for work being left over.

Controlling in Management – Relationship between Planning and Controlling

While learning the definition of controlling and going through its importance you must have felt that controlling is actually a step forward to planning. While’ planning sets the standards to achieve, controlling ensures that the set standards are achieved as planned. This clearly means that planning and controlling are very closely related to each other. The success of all other functions depends on how well the planning and controlling functions are performed.

Let us now understand the relationship between planning and controlling:

Control presupposes the existence of certain standards set by planning which act as the basis of controlling. Controlling monitors the progress and measures the effectiveness of plans, checks for deviations if any, initiates corrective and preventive actions to ensure that the planned results are accomplished. Therefore, controlling begins as soon as the plans become operational.

Following points explain the relationship between planning and controlling:

1. Controlling without planning is blind – Controlling uses the standards of performance provided by planning as a base for evaluation and comparison. Planning predetermines the understanding of the desired performance. If there are no standards set in advance, there is nothing to control and compare. Therefore, if there is no planning there is no control.

2. Planning without controlling is meaningless – Controlling monitors the progress of plans implemented, discovers deviations and initiates corrective measures to ensure that activities conform to plans. Success of planning depends on controlling therefore, without controlling planning is meaningless.

3. Planning seeks consistent, integrated and articulated programmes while controlling seeks to compel events to conform to plans.

4. Planning involves thinking and analysis to prescribe an appropriate course of action while controlling checks if prescribed decisions have been translated into desired action and verifies their accuracy and objectivity. Therefore, planning is prescriptive but controlling is evaluative.

To conclude, we can say that planning based on facts makes controlling easier and effective and controlling improves future planning. Therefore, planning is a prerequisite for controlling and the two are inseparable twins of management.

Planning is always for future and controlling is in the present but it evaluates the activities planned in the past. So, can we say that planning is ‘looking ahead’ and controlling is ‘looking back’?

Let us review and find out if this is true. In my opinion planning and controlling both look ahead and look back simultaneously.

The following points will explain how the statement ‘planning is looking ahead and controlling is looking back’ is correct but only partially:

1. Plans are prepared for the future and are based on forecasts of the future conditions. Therefore, it is a forward looking function.

2. Controlling is comparing and evaluating activities done in the past to ensure there are no deviations from the standards. Therefore, it is a backward looking function.

3. Planning is guided by the experiences in the past, the corrective actions suggested by controlling helps to improve plans for the future. Therefore, planning is a backward looking function.

4. Controlling suggests corrective or preventive actions to revise the plans considering the changes in business environment in the near future. Therefore, it is a forward looking function.

Planning and controlling function simultaneously and both are looking ahead and looking back with a common aim to achieve organisational objectives most effectively and efficiently.

Now that you know what is controlling and what is its importance in the functioning of an organisation, let us study in detail the process of controlling.

Controlling in Management – 7 Limitations of Controlling

Limitation # 1. Lack of Satisfactory Standards:

It is quite difficult to fix satisfactory standards for many intangible activities such as results of management, developments, human relations and public relations. Activities of the workers for service of advisory nature and other activities relating to the behavior of the workers do not indicate quantitative output and identify their level of attainment. Therefore, controlling becomes difficult.

Limitation # 2. Effects of External Factors:

Internal factors could be checked and put in the right perspective in time, but it is impossible to check and control the external factors. For example, change in the Government policy, new inventions or discoveries, changes in the fashions and liking of the consumers etc., cannot be checked by the control system.

Limitation # 3. Imperfections in Management:

Economic consideration is not possible if we measure everything and everybody’s work. Intangible performance always brings difficulties and responsible for making the task complicated for the measurement of results. If one fails to measure the performance in quantitative and qualitative terms, the results of behavioural activities have to be evaluated by managers on their own thinking and judgment.

Limitation # 4. Problem in Setting of Individual Responsibilities:

Assignment of individual responsibilities becomes difficult. The effective impact of control in most of the cases depends on how responsible are the workers in the organization.

Limitation # 5. Limitation of Corrective Actions:

To some extent it is true that there are certain organizations which have taken corrective actions quickly and were successful in avoiding errors. But problems arise where management does not take corrective action in time to avoid deviations.

Limitation # 6. More Expansive Devise:

To make the control more systematic and effective. It requires careful and timely investigation of different business activities. It requires appointment of more skilled people, which requires more money to reward the workers for their work. Thus, it becomes a costly affair in terms of money and time.

Limitation # 7. Human Reactions to Control:

Control creates tension in the minds of workers and affects their actions and thinking. The pressure of work gives negative results and reduces the quantity and quality of work. The workers ignore long term goals and gives false reports about the performance.

Controlling in Management – 8 Measures to Address the Opposition to Control Measures

1. Involvement of Employees in Control Design:

Employees concerned with translating the goal into reality should be involved in setting standards. This will add more acceptability to the standards.

2. Appraisal of Facilities before Installing Control:

Managers should thoroughly examine the facilities available in the organization to accomplish the standards set. The standards set should be realistic and attainable. Since unattainable standards leads to employee frustration, managers should examine the possibility of goal attainment from different angles before setting realisable target.

3. Employee Education about Control:

Employees should be educated that control measure is not tailored to penalise them but to improve their skills and competencies thereby increasing their value in the job market.

4. Non-Existence of Bias:

There should not be any room for bias, prejudice or discrimination in administering control system. Employees themselves may be involved in evaluation process so that they know the reality about their performance standard.

5. Selective Control:

Managers should not bring in control system to generally control the employees. Where a section of employees is not conforming to the control measures, they should be selectively enforced on such errant employees. Institution of a control system to control all the employees in terms of the negative behaviour of a few is likely to brew trouble in relationship climate.

6. Enlightening the Need for Control:

Egoistic employees should be enlightened on the need for assuming responsibility. They should be imparted on the need to learn in ever changing business environment. They should be taught to handle crisis, thereby building a positive attitude in them.

7. Mechanism to Reward Desirable Behavior:

A reward mechanism should be integrated with control system so that acceptable performance or positive performance is recognized and rewarded.

8. Free Flow of Communication:

There should not be any block in the free flow of communication between employees and management. The communication from employee expressing their heart burns, ill feeling, grievances, complaints, dissatisfaction etc., should be allowed to be transmitted without any hindrance. The managers too should not miss any opportunity to persuade the employees to impress on them the need for control for their healthy career growth.