Controlling functions and techniques are exercised in all functional areas of management such as finance, marketing, human resource, production, etc. The process of controlling is very much associated with planning, the primary function of management. Both these functions are complementary to each other in the sense that either of these has no meaning unless the other is performed.
In simple terms, controlling is the process of ensuring that all activities are in conformity with what has been planned already. It is the act of identifying any deviation from the standard performance by comparing it with the actual performance. Controlling function is not complete once the deviations are identified. Correcting the deviation, if any, is also under the purview of controlling process. It is a four step process of establishing performance standards based on the firm's objectives, measuring and reporting of actual performance, comparing the two, and taking corrective or preventive actions, if necessary.
Henry Fayol defines controlling as " in an undertaking control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued, and principles established, It has for object to point out weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything-things, people actions."
Performance standards are ...
Corrective action is warranted only when actual performance is below standards to ensure that the problem will not recur. On the other hand, if the performance is greater than or equal to standards, the behavior or system because of which it happened will be reinforced.
Characteristics of Controlling Process
Controlling is a never-ending process. Organisations which strive for improved performance will keep on controlling the activities of all areas. The exercise of controlling process is cyclical in nature which permanently observes the discrepancies of actual performance and corrects such deviations. Controlling is inseparably associated with planning function as the former cannot be exercised without the latter. In other words, planning is pointless unless it is accompanied by controlling. Because, mere establishment of standards alone will not bring success in business, rather, it must be compared with the actual continuously. Controlling is both anticipatory and retrospective. It expects problems and takes preventive action. With corrective actions, the process also follows up on problems. It employs a number of techniques based on the nature and area of problems. Controlling process ensures successful and efficient performance from executors whom are held responsible for discrepancies. However, employees are reluctant to have control mechanism in organisation as it constantly evaluate their performance in terms of what is needed by organisation.
Significance of Controlling
Controlling function occupies a pivotal position in the day to day management of business organisations regardless of type, size and nature. Management functions are a set of decisions and actions that