Mastering Controlling in Management: Process, Examples, and Importance

The management function of controlling is just as fundamental as planning, organizing, and staffing. Without effective controlling, management cannot guarantee the achievement of desired outcomes. This article will provide a comprehensive understanding of the controlling function in management.

Definition of Controlling

Brech defines controlling as a methodical practice that involves comparing actual progress or performance against predetermined standards or plans, with the aim of ensuring satisfactory progress. Additionally, any insights gained from the process are recorded and may be used to address future needs.

What is controlling in Management?

Management control involves setting predetermined standards and ensuring that employees' performance meets these standards. If an employee's performance falls short of the set standards, corrective measures must be taken by the management to address the issue. This ensures that the organization runs smoothly and efficiently while maintaining a high level of quality control.

The management of an organization plays a crucial role in ensuring that the organization's goals are achieved as intended and within set timelines. Among the various functions of management, the control function holds significant importance.

Control, in essence, involves providing directives to employees and ensuring that they are adhering to the instructions as intended by the management.

The efficient utilization of organizational resources for growth and the prevention of wastage is a top priority for management. Additionally, a manager's ability to effectively control and lead their team is crucial for success.

Types of Control

Effective team coordination and planning for future projects are crucial aspects of management. By implementing proper team control, a manager can ensure that his team members work in tandem. Management control comes in different forms, allowing managers to choose the most appropriate type based on the situation at hand. This function is critical to the success of any management team.

Organizations require various types of control to effectively monitor and regulate their processes. One such type of control is feedback control, which involves gathering information about completed tasks, analyzing it, and using it to improve future tasks. For instance, managers may gather feedback from their employees to enhance processes based on the received information.

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Real-time control, also known as concurrent control, allows for immediate problem detection and action to prevent any potential losses. An example of this is the real-time traffic analysis of a website in the event of a server failure. On the other hand, predictive control, or feedforward control, is a preventive measure that enables the identification of potential issues before they occur, ultimately allowing for their prevention.

The steering control plays a crucial role in ensuring that a vehicle stays on the right track, and the same applies to processes. It is an ongoing process that requires constant steering in the right direction through a combination of feedback and concurrent control. In production scenarios, the Yes/No control operates like a laser on an assembly line, determining whether an activity should proceed or not based on whether the product meets the required quality standards.

Rewritten: Budgetary control involves managing and regulating an organization's resources and budgets through monitoring and comparing forecasted budget with actual usage. The aim is to prevent overutilization of the budget by implementing control mechanisms. On the other hand, operational control focuses on ensuring efficiency and regulation of day-to-day activities and processes in an organization to enhance productivity.

Strategic Control involves monitoring an organization's progress towards achieving its long-term goals and objectives. It ensures that the company is aligned with its strategic plan and organizational direction. On the other hand, Objectives Control employs the principles of Management by Objectives and emphasizes the use of SMART goals. This helps to assign responsibility to employees and regulate their performance through objective-based monitoring.

Features of Controlling in management

1) Controlling is a dynamic process

Effective controlling requires a manager to be adaptable and flexible in their approach. When an employee fails to meet performance standards, it is the responsibility of the manager to evaluate the situation and determine the appropriate course of action. This requires strong decision-making skills and the ability to react accordingly.

When faced with an employee who frequently misses work, the manager should approach them and inquire about the reasons behind their absenteeism. If the issue persists, the manager may need to take disciplinary action. On the other hand, an employee who consistently fails to meet performance standards may require a different course of corrective action than an employee who has only failed to meet standards once.

2) Controlling is an end function

After the task is completed, controlling comes into action as an end function. Performance standards are established prior to assigning work to employees, and upon completion, the employees' performance is evaluated against these standards. If their performance meets the standards, no further action is needed. However, if their performance falls short, corrective actions must be taken by the manager. It is accurate to conclude that controlling is indeed an end function.

3) Planning and controlling go hand in hand

Effective management requires the synchronization of planning and control. A competent manager must devise a plan to ensure that employee actions are aligned with organizational goals, and exercise control to steer the team towards the desired outcome.

The sales manager sets a target of 5 million in sales for the quarter and assigns 1 million to each of the five salespersons on the team. Through monitoring their actions, he ensures they achieve the desired results. This highlights the importance of both planning and controlling in achieving success. Without one, the other is ineffective.

4) Controlling is a pervasive function

At every level of management, controlling is an integral function that cannot be avoided. It is expected of all managers to effectively control their respective levels of responsibility.

This implies that top-level managers are responsible for overseeing the actions of middle-level managers and monitoring their performance. Similarly, low-level managers are accountable to their respective middle-level managers.

Different methods of control are utilized at various levels to ensure effective management. In the event that an employee's performance falls short of expectations, appropriate corrective measures are taken.

5) Controlling is looking forward

A manager's ability to monitor an employee's past actions allows for better performance management. By tracking an employee's performance, a manager can make informed decisions when it comes time to evaluate their progress.

Process of Controlling in management

The process of controlling in management consists of four steps. All of these steps are necessary to be followed in order to control effectively.

1) Formation of standards

In order to initiate the controlling process, the manager must establish clear and concise standards. These standards outline the expected performance levels for the project, providing employees with a clear understanding of what is required of them. Once established, the manager will prepare a report detailing these standards and expectations to ensure that all team members are on the same page.

The determination of standards is not a random process, but rather based on a thorough analysis of past employee performance, as well as an evaluation of current market conditions. Before communicating these standards to employees and assigning targets, they are reviewed and approved by senior management.

Once concrete standards have been established and approved, they are shared with team members and individual targets are assigned. Having a shared standard provides employees with a unified goal to work towards.

2) Measurement of actual performance

After the task has been finished, it falls on the manager to evaluate the employees' performance. The manager will thoroughly assess the work of each employee and request them to provide a report of their accomplishments.

3) Comparison of actual performance with the standard performance

Once the report has been measured, it is compared to the predetermined standard performance to determine any deviations in actual performance. The difference between the two performances is then calculated and analyzed for all employees, resulting in a comprehensive performance report.

4) Taking corrective actions if required

After comparing the standard performance with the actual performance of employees. The difference is calculated.

The company evaluates each employee's performance by analyzing their progress towards their assigned targets. Any discrepancies between the given targets and the actual percentage achieved are noted, and appropriate actions are taken based on the company's policies and the employee's past performance. If an employee consistently meets or exceeds their targets, no actions are necessary. However, it is crucial to address any performance issues promptly to prevent a decline in work quality and potential loss of business.

Importance of controlling

1) Controlling Motivates Employees

Controlling doesn’t mean just giving orders to the employees. It means that the manager guides his employees throughout the process and provide help to them where they need.

He ensures that all employees are dedicated to their work and holds them accountable if they are not putting forth their full effort. Setting targets for employees gives them a clear objective to work towards, motivating them to work hard and surpass their usual performance. This level of motivation often leads to employees achieving more than they thought possible.

2) Controlling Makes the efficient use of resources

When management is able to effectively control resources within an organization, it enables employees to utilize them in a more efficient and responsible manner. Through the implementation of a management control system, decision-makers can ensure that resources are maximized to their fullest potential, resulting in increased productivity and output for the company.

3) Controlling creates discipline in the organization

Control is integral to effective management as it ensures discipline within the organization, which is crucial for achieving goals within the desired timeframe and with available resources. Without control, individuals may become careless in their actions, knowing that there is no one to question or hold them accountable. Therefore, control helps to maintain order and accountability within the organization, ultimately leading to success.

By controlling management not only control the actions of employees but also makes sure that they do that maximum output can be obtained.

4) Controlling ensures coordination of action

Effective coordination is essential for the smooth functioning of the organization and achieving its goals. Without proper coordination, there can be duplication of efforts, delays, and even conflicts among employees. The management must ensure that there are open lines of communication and collaboration among different departments to ensure that resources are utilized efficiently and effectively. This can be achieved through regular meetings, cross-functional teams, and shared goals and objectives. Ultimately, effective coordination leads to improved productivity, increased profitability, and a more satisfied workforce.

Management serves as a unifying force, aligning the efforts of employees across various departments towards a singular objective: the attainment of the organization's shared mission.

5) Controlling helps in deciding the right judgment about the standards

Proper analysis, not hunches, should guide the establishment of standards. Management must consider factors such as past project performance, market conditions, available human resources, and organizational capacity to make informed decisions. Effective control of work and expertise in the organization can enable accurate judgment and successful implementation of standards.

6) Controlling aids in the accomplishment of organizational goals

The ultimate objective in business management is achieving the set goals. The business owner or top management invests in the business with the aim of maximizing profits. As a result, the primary focus in every project is to increase revenue, and it is the responsibility of a lower-level manager to ensure their team delivers on their performance targets.

Therefore, a manager always controls the actions of people working on his team by making the effective use of the process of controlling.

Examples of control in the management

The significance of effective management control in an organization has been emphasized in the preceding discussion. This section aims to provide examples of work that necessitate management control.

1) Performance measurement

Assigning tasks to employees is just the beginning; effective management also requires measuring their performance. By evaluating each employee's efforts and actions, management can gain valuable insights that inform important decisions regarding promotions, salary increases, and bonuses.

2) Strategy planning

Effective management is crucial in both strategic and operational planning. They are responsible for setting the organization's goals and determining how to achieve them with the resources available.

3) Managing Finances

The effective management of an organization's finances falls under the responsibility of the management team. They play a crucial role in determining the allocation of funds for various projects and ensuring that the decisions made are profitable for the organization. In cases where a project does not meet the desired financial outcomes, management takes corrective measures to improve the situation.

4) Supervising people

Effective management plays a crucial role in overseeing the performance of employees, boosting productivity, and evaluating their efficiency. Managers are responsible for ensuring that their team members work to their fullest potential and strive towards achieving the organization's goals.

5) Controlling risk

Management identifies and analyze the risks involved at an early stage and take precautionary steps to avoid them or to minimize their impact.

6) Improving performance

Effective management requires control to continually enhance the team's performance. By analyzing each employee's output, the manager can provide guidance and instructions to improve their efficiency and ultimately achieve the organizational objectives.

7) Inventory Management

The management is responsible for controlling the inventory so that there is never a shortage or surplus of supply, and everything works without trouble.

8) Ensuring Quality

Maintaining quality is crucial for organizations that are recognized for their high standards. Failure to adhere to quality control measures could lead to negative consequences for the business. This is why managers in such organizations make it a top priority to ensure that quality standards are met and maintained at all times.