Management - Controlling Concepts

Controlling

• Controlling is the process of monitoring, comparing, and correcting work performance.
• Managers need to evaluate activities and compare actual performance to desired standards.
• Effective controls ensure activities lead to goal attainment.
• The effectiveness of controls depends on how well they support employee and manager goal achievement.

Why Controlling is Important

• Planning and organizational structure creation facilitate efficient goal achievement.
• Effective leadership motivates employees.

Planning-Controlling Link

• Planning: goals, objectives, strategies, plans
• Controlling: standards, measurements, comparison, actions
• Organizing: structure, human resource management
• Leading: motivation, leadership, communication, individual and group behavior

Types of Controlling

• Input (Feedforward Control): anticipates problems
• Processes (Concurrent Control): corrects problems as they happen
• Output (Feedback Control): corrects problems after they occur

Effective Controlling

• Budgeting: Financial plans outlining expected revenues and expenditures, comparing actual performance to budget, and corrective actions.
• Performance Management by Objective (MBO): approach where managers and employees set specific objectives aligned with organizational goals.
• Statistical Quality Control (SQC): uses statistical methods to monitor and control processes, common in manufacturing to ensure product quality and consistency.

Further Effective Controlling Approaches

• Audits: Internal and external examinations of financial statements, processes, and operations to ensure compliance with regulations, detect fraud, and assess control effectiveness.
• Balanced Scorecard: Strategic management tool providing a comprehensive view of organizational performance considering financial, customer, internal processes, and learning perspectives to align business activities with organizational vision and strategy.
• Key Performance Indicators (KPIs): Specific metrics used to measure performance against strategic goals, including sales growth, profit margins, customer satisfaction, and employee productivity.