Organisation of Commerce and Management · Ch 2 — Functions of Management
Controlling
Controlling
No plan is guaranteed to succeed exactly as intended. Controlling is the management function that checks whether actual performance matches the planned performance, and takes corrective action where it does not — closing the loop that planning opens.
Meaning
Controlling is the process of establishing performance standards based on organisational objectives, measuring and reporting actual performance, comparing the two, and taking corrective and preventive action as necessary. Controlling is often described as a backward-looking function, in the sense that it evaluates what has already happened, in contrast to planning, which looks forward.
Features of Controlling
- Controlling is a continuous process. It does not happen once at the end of a project; it is carried out throughout the period covered by the plan.
- Controlling is a management function. Every manager, at every level, performs some degree of control over the work under them.
- Controlling is forward-looking as well as backward-looking, in the sense that while it measures past performance, its real purpose is to prevent the same deviation from recurring in the future.
- Controlling is a pervasive function. It is required in every department and at every level of the organisation, not confined to any one area.
- Controlling is closely linked with planning. Control has no meaning without a predetermined standard to measure against, and that standard comes directly from the plan.
Importance of Controlling
Controlling helps in achieving organisational goals, by continually checking that activities are moving in the right direction and correcting course when they are not. It helps judge the accuracy of standards, since a control system that repeatedly shows large deviations may indicate the original standard itself needs revision. Controlling makes efficient use of resources by highlighting waste, idle capacity, or inefficiency as soon as it appears, rather than only at the end of a period. It improves employee motivation, because a good control system clarifies in advance what is expected of employees and how their performance will be evaluated. Controlling also ensures order and discipline in the organisation and helps facilitate coordination in action, since a common set of standards and reporting keeps different departments working towards the same, consistent targets.
The Process (Steps) of Controlling
| Step | What happens |
|---|---|
| 1. Setting performance standards | Clear, measurable benchmarks are established for what performance should look like (e.g., production targets, quality levels, cost limits). |
| 2. Measuring actual performance | The actual results achieved are recorded and measured, using the same units as the standards, so the two are comparable. |
| 3. Comparing actual performance with standards | The measured performance is compared against the standard to identify whether there is a deviation, and how large it is. |
| 4. Analysing deviations | Where a deviation exists, its cause is investigated — is it due to an unrealistic standard, poor execution, or an external factor outside the organisation's control? |
The management function of setting performance standards, measuring actual performance, comparing the two, analysing deviations, and taking corrective action to ensure organis …
The steps taken by management to remove the cause of a deviation between actual performance and the standard set, so that future performance moves …