Controlling

Controlling is the management function of ensuring that actual organisational activities conform to planned activities — it is the process of measuring actual performance against planned/standard performance, identifying any deviations, analysing the causes, and taking corrective action to remedy them.

Steps in the controlling process:

1. Setting performance standards — quantitative (e.g. cost, revenue, output units) or qualitative (e.g. improving employee morale) targets against which actual performance can be compared.
2. Measurement of actual performance — measured objectively, and as far as possible in the same units in which the standard was set, and at the appropriate frequency (continuously, periodically, or at the end of a task).
3. Comparing actual performance with standards — this comparison reveals the deviation, if any, between what was planned and what actually happened.
4. Analysing deviations — some deviations are minor and can be tolerated (within a permissible range), while significant ones need close analysis, either by the critical point control technique (focusing on key result areas critical to the organisation's success) or the management by exception principle (bringing only significant deviations to management's notice, rather than every minor deviation).
5. Taking corrective action — if the deviation is beyond the acceptable range, management must act, either by correcting the deviation at its source or, sometimes, by revising the standard itself if it was found to be unrealistic. …