What is Controlling
Process of regulating organizational activities, so that actual performance conforms to expected
organizational standards and goal. Controlling means that managers develop appropriate standards,
compare ongoing performances against those standards, and take steps to ensure that corrective actions
are taken where necessary.
Controlling is a primary goal-oriented function of management in an organization. It is a
process of comparing the actual performance with the set standards of the company to ensure
that activities are performed according to the plans and if not then taking corrective action.
The most important function of controlling is to compare actual performances with expected
results. This, in turn, helps managers understand where they are lacking and how they can
improve their performances. Using this knowledge, managers can use all available resources
optimally and prevent their wastage.
The basic control process: (1) establishing standards. (2) measuring performance against these
standards. and (3) correcting deviations from standards and plans.
A good management control system stimulates action by spotting the significant variations from
the original plan and highlighting them for the people who can set things right.
Controls need to focus on results.3
Certainly, here are the consequences of poor controlling in management presented in bullet
points:
Missed Goals and Objectives: Failure to align performance with organizational goals.
Wasted Resources: Misallocation and inefficient use of time, money, and materials.
Decline in Quality: Decreased product or service quality and customer satisfaction.
Ineffective Decision Making: Poor choices due to lack of accurate performance data.
Employee Disengagement: Demotivated workforce due to lack of recognition and feedback.
Loss of Accountability: Absence of responsibility for actions and outcomes.
Stifled Innovation: Creativity and innovation suppressed by excessive control.
Unidentified Problems: Issues and deviations going unnoticed and growing over time.
Lack of Adaptability: Inability to respond effectively to changes in the business environment.
Negative Impact on Morale: Negative work environment affecting employee satisfaction.
Increased Risk Exposure: Inadequate risk management and vulnerability to threats.
Missed Opportunities: Failure to capitalize on growth and improvement prospects.
Financial Instability: Overspending, budget deficits, and financial uncertainty.
Confusion and Chaos: Lack of clear direction leading to disorganized operations.
Lack of Transparency: Unclear decision-making processes eroding trust.
Diminished Customer Satisfaction: Decreased customer loyalty and negative word-of-mouth.
Loss of Competitiveness: Reduced ability to compete in the market.
Legal and Compliance Issues: Non-compliance with regulations leading to legal liabilities.
It's crucial for organizations to avoid these consequences by implementing effective controlling
practices and ensuring alignment with organizational goals and standards.
Controlling is a critical function in management because it serves several important purposes
that contribute to the overall success and effectiveness of an organization. Here are some
reasons why controlling is important in management:
Achievement of Organizational Goals: Controlling helps ensure that the organization's activities
and performance are aligned with its goals and objectives. By monitoring and evaluating
progress, managers can identify deviations and take corrective actions to keep the organization
on track towards its desired outcomes.
Performance Evaluation: Controlling provides a mechanism to assess the performance of
individuals, teams, and departments. It helps managers identify areas of excellence as well as
areas needing improvement, which can lead to better resource allocation and increased
efficiency.
Efficient Resource Utilization: Controlling helps prevent wastage of resources such as time,
money, materials, and manpower. By monitoring and managing resource usage, organizations
can optimize their operations and achieve higher levels of productivity.
Adaptation to Change: In a dynamic business environment, change is constant. Controlling
allows organizations to quickly identify shifts in performance and market conditions, enabling
them to adapt their strategies and plans accordingly.
Identification of Deviations: Controlling helps identify deviations from established plans and
standards. When performance varies from expectations, managers can investigate the root
causes of these deviations and take corrective actions to address them.
Feedback Mechanism: Controlling provides a structured feedback loop. It informs employees
and managers about how well they are doing, highlighting successes and areas for improvement.
This feedback enhances employee motivation and supports continuous improvement efforts.
Enhanced Decision Making: Accurate information gathered through the controlling process
helps managers make well-informed decisions. Data-driven decisions based on real-time
information are more likely to lead to successful outcomes.
Accountability and Responsibility: Controlling establishes accountability within the
organization. Managers are responsible for the performance of their teams, and employees are
held accountable for their assigned tasks. This promotes a sense of ownership and responsibility.
Early Detection of Problems: By regularly monitoring performance, managers can identify
potential issues and challenges early on. This allows for proactive problem-solving and prevents
minor issues from escalating into major problems.
Benchmarking and Improvement: Controlling involves comparing actual performance against
established standards. This benchmarking process helps organizations identify best practices and
areas for improvement, leading to increased efficiency and effectiveness.
Regulatory Compliance: In regulated industries, controlling ensures that the organization
complies with legal and regulatory requirements. It helps maintain ethical practices and avoids
potential legal and financial risks.
Goal Alignment and Coordination: Controlling fosters coordination among different
departments and levels of the organization. When everyone is aware of the goals and
performance expectations, it becomes easier to align efforts toward common objectives.
In summary, controlling is essential in management because it provides a structured approach to
monitoring, evaluating, and regulating organizational activities. It helps organizations stay on
course toward their goals, maintain efficiency, respond effectively to changes, and continuously
improve their performance. Without effective controlling, an organization may face
inefficiencies, deviations from goals, and a lack of accountability
make me an short conclusion based on the importance of the good controlling in management
In summary, effective controlling in management is crucial for achieving organizational success. It
ensures alignment with goals, facilitates informed decision-making, and prevents issues from
escalating. By promoting accountability, innovation, and transparency, good controlling lays the
foundation for efficient operations and sustained growth.
