MBA management

Controlling Function of Management

Meaning and Definition of Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”.

The managerial function controlling always maximise the use of scarce resources to achieve the purposeful behaviour of employees in an organisation. In planning stage, it is decided that how the resources would be utilised but where as in the controlling stage it is observed that whether the resources are being utilised in the same way as planned or not. Thus, control completes the whole sequence of management process.

Controlling consists of verifying whether everything occurs in confirmities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions According to Brech, “Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs.” According to Donnell, “Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course.”

Therefore controlling has following steps:

(i) Establishment of standard performance.
(ii) Measurement of actual performance.
(iii) Comparison of actual performance with the standards and finding out deviation if any.
(iv) Corrective action.

Features of Controlling Function

Following are the characteristics of controlling function of management-

a. Controlling is an end function- A function which comes once the performances are made in confirmities with plans.

b. Controlling is a pervasive function- which means it is performed by managers at all levels and in all type of concerns.

c. Controlling is forward looking- because effective control is not possible without past being controlled. Controlling always look to future so that follow-up can be made whenever required.

d. Controlling is a dynamic process- since controlling requires taking reviewal methods, changes have to be made wherever possible.

e. Controlling is related with planning- Planning and Controlling are two inseperable functions of management. Without planning, controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling succeeds planning.

Roles of Manager

Henry Mintzberg identified ten different roles, separated into three categories. The categories he defined are as follows

a) Interpersonal Roles - The ones that, like the name suggests, involve people and other ceremonial duties. It can be further classified as follows

• Leader – Responsible for staffing, training, and associated duties.
• Figurehead – The symbolic head of the organization.
• Liaison – Maintains the communication between all contacts and informers that compose the organizational network.

b) Informational Roles - Related to collecting, receiving, and disseminating information.

• Monitor – Personally seek and receive information, to be able to understand the organization.
• Disseminator – Transmits all import information received from outsiders to the members of the organization.
• Spokesperson – On the contrary to the above role, here the manager transmits the organization’s plans, policies and actions to outsiders.

c) Decisional Roles - Roles that revolve around making choices.

• Entrepreneur – Seeks opportunities. Basically they search for change, respond to it, and exploit it.
• Negotiator – Represents the organization at major negotiations.
• Resource Allocator – Makes or approves all significant decisions related to the allocation of resources.
• Disturbance Handler – Responsible for corrective action when the organization faces disturbances.

A manager's job is never static, and is always in movement. At any given time, a manager may be carrying out some combination of these roles to varying degrees, from none of their time to 100 percent of their time. Over their working life, a person may hold different management positions that call upon different roles.

Top level managers consists of the board of directors, president, vice-president, CEOs and others. They are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company policies and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to shareholders and the general public.

Middle level managers consist of general managers, branch managers and department managers. They are accountable to the top management for the functions of their departments. They devote more time to organizational and directional concerns. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and objectives. This includes being able to define and discuss information and top management policies with lower management and, most importantly, provide lower level managers with guidance and inspiration for high performance.

First level managers consist of supervisors, section leads, foremen, and the like. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, and solving employee problems.

Control Process

The basic control process involves mainly these steps:

a) The Establishment of Standards: Because plans are the yardsticks against which controls must be revised, it follows logically that the first step in the control process would be to accomplish plans. Plans can be considered as the criterion or the standards against which we compare the actual performance in order to figure out the deviations.

Examples for the standards

Profitability standards: In general, these standards indicate how much the company would like to make as profit over a given time period- that is, its return on investment.
Market position standards: These standards indicate the share of total sales in a particular market that the company would like to have relative to its competitors.
Productivity standards: How much that various segments of the organization should produce is the focus of these standards.
Product leadership standards: These indicate what must be done to attain such a position.
Employee attitude standards: These standards indicate what types of attitudes the company managers should strive to indicate in the company’s employees.
Social responsibility standards: Such as making contribution to the society.
Standards reflecting the relative balance between short and long range goals.

b) Measurement of Performance: The measurement of performance against standards should be on a forward looking basis so that deviations may be detected in advance by appropriate actions. The degree of difficulty in measuring various types of organizational performance, of course, is determined primarily by the activity being measured. For example, it is far more difficult to measure the performance of highway maintenance worker than to measure the performance of a student enrolled in a college level management course.

c) Comparing Measured Performance to Stated Standards: When managers have taken a measure of organizational performance, their next step in controlling is to compare this measure against some standard. A standard is the level of activity established to serve as a model for evaluating organizational performance. The performance evaluated can be for the organization as a whole or for some individuals working within the organization. In essence, standards are the yardsticks that determine whether organizational performance is adequate or inadequate.

d) Taking Corrective Actions: After actual performance has been measured compared with established performance standards, the next step in the controlling process is to take corrective action, if necessary. Corrective action is managerial activity aimed at bringing organizational performance up to the level of performance standards. In other words, corrective action focuses on correcting organizational mistakes that hinder organizational performance. Before taking any corrective action, however, managers should make sure that the standards they are using were properly established and that their measurements of organizational performance are valid and reliable. At first glance, it seems a fairly simple proposition that managers should take corrective action to eliminate problems - the factors within an organization that are barriers to organizational goal attainment. In practice, however, it is often difficult to pinpoint the problem causing some undesirable organizational effect.

Barriers for Controlling

There are many barriers, among the most important of them:

Control activities can create an undesirable overemphasis on short-term production as opposed to long- term production.
Control activities can increase employees' frustration with their jobs and thereby reduce morale. This reaction tends to occur primarily where management exerts too much control.
Control activities can encourage the falsification of reports.
Control activities can cause the perspectives of organization members to be too narrow for the good of the organization.
Control activities can be perceived as the goals of the control process rather than the means by which corrective action is taken.

Requirements For Effective Control

The requirements for effective control are

a) Control should be tailored to plans and positions. This means that, all control techniques and systems should reflect the plans they are designed to follow. This is because every plan and every kind and phase of an operation has its unique characteristics.

b) Control must be tailored to individual managers and their responsibilities. This means that controls must be tailored to the personality of individual managers. This because control systems and information are intended to help individual managers carry out their function of control. If they are not of a type that a manager can or will understand, they will not be useful.

c) Control should point up exceptions as critical points. This is because by concentration on exceptions from planned performance, controls based on the time honored exception principle allow managers to detect those places where their attention is required and should be given. However, it is not enough to look at exceptions, because some deviations from standards have little meaning and others have a great deal of significance.

d) Control should be objective. This is because when controls are subjective, a manager’s personality may influence judgments of performance inaccuracy. Objective standards can be quantitative such as costs or man hours per unit or date of job completion. They can also be qualitative in the case of training programs that have specific characteristics or are designed to accomplish a specific kind of upgrading of the quality of personnel.

e) Control should be flexible. This means that controls should remain workable in the case of changed plans, unforeseen circumstances, or outsight failures.Much flexibility in control can be provided by having alternative plans for various probable situations.

f) Control should be economical. This means that control must worth their cost. Although this requirement is simple, its practice is often complex. This is because a manager may find it difficult to know what a particular system is worth, or to know what it costs.

g) Control should lead to corrective actions. This is because a control system will be of little benefit if it does not lead to corrective action, control is justified only if the indicated or experienced deviations from plans are corrected through appropriate planning, organizing, directing, and leading.

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Review Questions
  • 1. Explain span of control.
  • 2. What are the modern techniques of managerial control?
  • 3. Explain the problems in Co-ordination.
  • 4. Define the term Budget.
  • 5. State the basic steps of control process.
  • 6. What is Performance Appraisal.
  • 7. List down the steps in the control process.
  • 8. Explain the steps involved in control.
  • 9. Span of control - Define.
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