Controlling — Notes

Controlling is the management function of seeing that actual work conforms to plans, and of correcting deviations when it does not. Every manager, at every level, controls the work under them.

Features

1. Goal-oriented — it keeps the organisation on course to its goals.
2. Pervasive — at all levels, in business and non-business organisations alike.
3. Continuous — the cycle of checking never stops.
4. A primary function of every manager.
5. Backward- and forward-looking — it reviews work done, and its findings improve future work.

1. Accomplishing organisational goals — gaps are found early and closed.
2. Judging accuracy of standards — repeated large gaps (above or below) show that a standard needs revision.
3. Making efficient use of resources — working to standards reduces waste and spoilage.
4. Improving employee motivation — employees know beforehand what is expected and the basis of appraisal.
5. Ensuring order and discipline — close checks reduce dishonest behaviour.
6. Facilitating coordination in action — each department works to standards that fit with the others.

1. Difficulty in setting quantitative standards — morale, courtesy and job satisfaction cannot easily be counted, so control over them is less effective.
2. Little control on external factors — government policy, technology, competition and natural events lie outside the firm.
3. Resistance from employees — strict checks (cameras, tracking) may be seen as a curb on freedom.
4. Costly affair — control systems take money, time and effort; the benefit should exceed the cost, which can be hard for small firms.

Planning and controlling are inseparable twins. Planning sets goals and standards; controlling checks whether they are being achieved.

• Planning without controlling is meaningless: no one knows whether the plan works.
• Controlling without planning is blind: there is nothing to measure against.

Both look back and forward. Planning draws on past results and control reports to set future goals; controlling reviews completed work, but corrective action and revised standards improve the future.

1. Setting performance standards — quantitative (units, cost, time, defects) or qualitative (goodwill, morale). Standards should be precise and flexible.

2. Measurement of actual performance — objective and reliable, in the same units as the standard; by personal observation, sample checking or performance reports.

3. Comparing actual performance with standards — reveals whether there is a deviation and how large it is.

Percentage deviation = (actual − standard) ÷ standard × 100, stated as a shortfall or an excess.

4. Analysing deviations

• Critical point control: focus on key result areas (KRAs) that affect the entire organisation, e.g. raw-material cost or safety, rather than on everything equally.
• Management by exception: only significant deviations beyond a permissible limit are brought to senior managers; minor ones are handled lower down. If managers try to control everything, they may end up controlling nothing.
• Then find the cause: machines, people, materials, unrealistic standards or outside factors.

5. Taking corrective action — remove the cause (repair, train, reorder, motivate), or revise the standard if it was unrealistic. No action is needed when the deviation is within the limit.