Business Management: Controlling Overview

What is Controlling?

• Controlling is the process of monitoring, evaluating, and improving work performance.
• Controlling should be used to achieve goals and objectives.
• Controlling is a process that guides actions towards organizational goals.
• The characteristics of controlling include universality, continuity, dynamism, omnipresence, future-oriented, and influencing.

Importance of Controlling

• Controlling helps make plans more effective by allowing managers to track progress, provide feedback, and lead their staff.
• Controlling helps ensure consistency in organizational activities by enforcing policies and procedures.

Controlling in Organizations

• Controlling is the process of measuring, evaluating, and improving work performance to ensure organizational goals and objectives are met.
• It involves setting standards, comparing actual performance to those standards, analyzing deviations, and taking corrective actions.
• Characteristics of controlling include:
  • Universality: The control method should be consistent across different organizations and functions.
  • Continuity: Adjustments and reviews are ongoing based on environmental factors.
  • Dynamism: Control methods need to adapt to changes in plans, objectives, and environmental factors.
  • Omnipresence: Types, boundaries, and scope of control functions vary.
  • Future: Past positive and negative experiences can shape future actions.
  • Final function: It ensures organizational goal achievement.
  • Influencing: Control aims to shape circumstances and guide behavior.

Importance of Controlling in Organizations

• Effectiveness of plans: Control helps track progress, provides feedback, and guides staff towards goals.
• Consistency of organizational activities: Policies and procedures ensure consistent practices.
• Effectiveness of organization: Effectiveness is measured by how well activities contribute to overall goals.
• Efficiency of organization: Control plays a crucial role in achieving efficiency by maximizing output with minimal input.
• Feedback: Control provides feedback on productivity and management effectiveness.
• Support for decision making: Control alerts managers to issues and provides data for decision-making.

The Controlling Process

• Step 1: Establishing standards: Set clear, achievable, and measurable goals.
  • Standards can be quantitative (e.g., sales targets, expenses) or qualitative (e.g., customer service, staff engagement).
• Step 2: Measuring actual performance: Monitor actual performance using methods like observation, sample checking, or performance tracking.
• Step 3: Comparing actual performance to standards: Identify the discrepancies between expected performance and actual performance.
• Step 4: Analyzing deviations: Determine the reasons for deviations and identify acceptable performance ranges.
  • Focus on significant deviations.
• Step 5: Taking corrective actions: Implement corrective actions if deviations exceed acceptable limits.

Types of Controlling

• Direct control: Managers directly monitor and supervise employees' actions.
• Technical control: Using technology to monitor and control processes and performance.
• Bureaucratic control: Reliance on rules, regulations, and procedures for control.
• Output control: Measuring performance based on results (e.g., sales figures, production levels).
• Normative control: Focusing on shared values, norms, and beliefs to guide behavior.

Summary

• Controlling is an essential management function that ensures organizational goals are achieved.
• It involves a systematic process of establishing standards, measuring performance, analyzing deviations, and taking corrective actions.
• Different types of control methods exist, each with its advantages and limitations.
• Effective controlling contributes to plan effectiveness, organizational consistency, efficiency, feedback, and sound decision-making.