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Controlling function.

Qualitative Standards: It includes Employee morale, consumer satisfaction, Brand leadership etc.

Standard setting, measurement of performance

The function of controlling is to decide the activities to be carried out, to evaluate the same and if required, to take the corrective measures so that they are done in conformity with plan. Controlling is to maintain a balance between efforts and results and between resources and objectives.

(b) Accounting centre is not applicable to responsibility accounting.

Standard refers to the target upon which the actual performance is measured.

Controlling means ensuring that activities in an organization are performed as per the plans Controlling also ensures that an organization’s resources are being used effectively and efficiently for the achievement of desired goals. Controlling is, thus a goal-oriented function.

Controlling is a very important managerial function. Because of controlling, a manager is able to compare actual performance with the planned performance. In order to control the activities at all levels, a manager needs to perform controlling functions.

Controlling help for execution of plans, Controlling improves employee’s efficiency.

Standards may be of two types qualitative standard and quantitative standard.

Controlling is the measuring & correcting of activities of subordinates to ensure that events conform according to the plan,

(a) Comparison of actual performance with set standards.

(b) Taking corrective actions.

‘Critical Point Control’ helps in controlling process by focusing on ‘key result areas’ (KRAs) which are important to the success of an organisation. As per this principle, a manager must concentrate on the key result areas since it is neither economical nor easy to keep a check on each and every activity of the organisation.

f actual performance is more than standard that leads to Positive deviations.

Management by Exception in the process of controlling means that only significant deviations which go beyond the permissible limit should be brought to the notice of the management.

                            Or

Management by Exception in the process of controlling means that an attempt to control everything results in controlling nothing.

It is the difference between actual performance and standard performance.

If actual performance is equal to the standard performance, then it is called as Zero deviations.

If actual performance is less than standard that leads to negative deviations.

Critical Point Control helps a lot in controlling process. Control can not be exercised at all points of an activity as it may be time consuming and very expensive. Managers should identify the important or critical points i.e., Key Result Areas (KRAs) and deviations should be corrected at the earliest. The KRAs are those areas which can affect the success of an organisation if anything goes wrong at the critical points, the deviations should be immediately analysed and corrective actions should be taken.

While analysing deviations, it is important to determine the acceptable range of deviations/Key Result Areas.

Importance of Controlling:

(i) Accomplishing organisational goals.

(ii) Making efficient use of resources.

(iii) Ensuring order and discipline.

(iv) Improving employee motivation.

(v) Judging accuracy of standards.

(vi) Facilitating co-ordination in action.

Importance of Controlling:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organization and keeps it on the right track so that organisational goals might be achieved.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with the predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to deliver better performance.

(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimize dishonest behaviour on the part of the employees by keeping a close check on their activities.

(vi) Facilitating co-ordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. Each department and employee is governed by the predetermined standards which are well co-ordinated with one another. This ensures that overall organisational objectives are accomplished.

Planning and controlling are inseparable. Planning is the primary function of every organization. It is the thinking process, which means looking ahead or making plans that how the desired goal is achieved in future. Thus it is called a forward-looking function. On the other hand, controlling is a systematic function which measures the actual performance against the planned performance. It compares and analyses the whole process of an organization and takes correcting actions.

Thus, it is a backward-looking function. But the statement “Planning is looking ahead and controlling is looking back” is only partially correct because it should be understood that planning is guided by past experiences and the corrective action initiated by control function which aims to improve future performance. Thus, planning and controlling are both backward-looking as well as forward-looking functions.

Planning and controlling are inseparable. Planning is the primary function of every organisation it is the thinking process, which means looking ahead or making plans that how desired goal is achieved in future thus it is called a formed looking function on the other hand controlling is a systematic function which measures the actual performance with the planned performance. It compared and analysed the whole process of an organisation and take correcting actions. Thus, it is a backward looking function but the statement “Planning is looking ahead and controlling is looking back” is partially correct because it should be understood that planning is glided by past experiences and the corrective action initiated by control function which aims to improve future performance. Thus, planning and controlling are both backward looking as well as a forward looking functions.

'Deviation' means any variation in the actual performance from the laid down standards.

Management by exception is a technique of analysing deviations based on the belief that an attempt to control everything results in controlling nothing. Thus only significant deviations which go beyond the permissible limit should be brought to the notice of the managers and minor or insignificant deviations can be ignored. Thus it saves time and energy of the managers so that managers can focus attention on significant matters.

Importance of Controlling:

(i) Accomplishing organisational goals.

(ii) Making efficient use of resources.

(iii) Ensuring order and discipline.

(iv) Improving employee motivation.

(v) Judging accuracy of standards.

(vi) Facilitating co-ordination in action.

Importance of Controlling:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organization and keeps it on the right track so that organisational goals might be achieved.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with the predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to deliver better performance.

(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimize dishonest behaviour on the part of the employees by keeping a close check on their activities.

(vi) Facilitating co-ordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. Each department and employee is governed by the predetermined standards which are well co-ordinated with one another. This ensures that overall organisational objectives are accomplished.

Correct option is (A) Every

Actual performance is compared with standards in the process of controlling to take corrective actions if significant deviation, occurs.

Importance of Controlling:

(i) Accomplishing organisational goals.

(ii) Making efficient use of resources.

(iii) Ensuring order and discipline.

(iv) Improving employee motivation.

(v) Judging accuracy of standards.

(vi) Facilitating co-ordination in action.

Importance of Controlling:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organization and keeps it on the right track so that organisational goals might be achieved.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with the predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to deliver better performance.

(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimize dishonest behaviour on the part of the employees by keeping a close check on their activities.

(vi) Facilitating co-ordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. Each department and employee is governed by the predetermined standards which are well co-ordinated with one another. This ensures that overall organisational objectives are accomplished.

Importance of Controlling:

(i) Accomplishing organisational goals.

(ii) Making efficient use of resources.

(iii) Ensuring order and discipline.

(iv) Improving employee motivation.

(v) Judging accuracy of standards.

(vi) Facilitating co-ordination in action.

Importance of Controlling:

(i) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organization and keeps it on the right track so that organisational goals might be achieved.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with the predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to deliver better performance.

(v) Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimize dishonest behaviour on the part of the employees by keeping a close check on their activities.

(vi) Facilitating co-ordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals. Each department and employee is governed by the predetermined standards which are well co-ordinated with one another. This ensures that overall organisational objectives are accomplished.

Correct option is (D) Controlling

Stages of controlling process:

1. Setting standards
2. Gathering information
3. Measuring performance
4. Comparing actual performance with set standards
5. Corrective measures

• The controlling process starts by setting standards.
• The information is gathered about work done and actual position.
• The work executed (performance) is measured.
• The comparison of work executed is made with set standards.
• After evaluating work the same is compared to set standards and if deviation/s is/are found corrective measures are taken.
  For this out of the given three measures any measure is taken:
  • No change in condition.
  • Change the condition to remove deviation,
  • Change the condition and establish the fresh standards.

Focus point for a manager while controlling should be the ‘Key Result Areas’.

Actual performance is compared with standards.

Correct option is (C) Rigid

Taking corrective actions