FUNCTIONS OF

MANAGEMENT
-
CONTROLLING
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Controlling
● It implies measurement of accomplishment
against the standards and correction of
deviation, if any, to ensure achievement of
organizational goals.
● The efficient system of control helps to
predict deviation before they actually occur.
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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.
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Controlling Process
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1. Setting Performance Standards

➢ The first step of the process of controlling is
to establish standards of performance
against which the actual performance of
the organisation is measured.
➢ An organisation should clearly define its
standards to the employees and must
establish attainable, understandable, and
realistic standards to be achieved.
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➢ Under quantitative terms, the standards

of an organisation are expressed in
quantitative terms like units of the
product to be produced and sold, revenue
to be earned, the cost to be incurred, etc.
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➢ While setting the quantitative standards

an organisation should keep them precise
so as to easily compare the actual
performance with the standards.
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➢ However, under qualitative terms, the

standards of an organisation are
expressed in qualitative terms like time
taken to serve a customer, motivation
level of employees, etc.
➢ The qualitative standards should also be
set in a way that makes the measurement
easy.
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2. Measurement of Actual Performance

Once the organisation has established

the standards, the second step of the
process of controlling is to measure the
actual performance in a reliable and
objective manner.
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The actual performance of an

organisation can be measured through
different techniques such as sample
checking, personal observation, etc., and
should be measured in the same units in
which the standards are fixed to make
the comparison easy.
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3. Comparison of Actual Performance

with Standards
➢ The third step of the process of controlling
is to compare the actual performance of
the organisation with the established
standards (in the first step).
➢ By comparing the actual performance
with the standards, an organisation can
determine the deviation between them.
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➢ If the actual performance of the

organisation matches with the set
standards, then the controlling process
ends after the third step.
➢ However, if the actual performance of the
organisation does not matches with the
set standards, then there are two more
steps in the process.
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4. Analysing Deviations
➢ The actual performance and set standards
of an organisation rarely match with each
other. Usually, there is always some
variation between the expected and
actual performance. Therefore, the fourth
step of the process of controlling is to
analyse the deviations.
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➢ To do so, an organisation must fix an

acceptable range of deviation in
performance. Besides, an organisation
should focus more on the significant
deviation and less on the minor deviations.
➢ For this, managers of an organisation
usually take the help of Critical Point
Control and Management by Exception.
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A) Critical Point Control

➢ Critical Point Control states that the control
system of an organisation should focus
more on the Key Result Areas (KRAs), which
are critical to its overall performance.
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➢ It is not easy and economical for an

organisation to keep a check on every
activity with the same attention level.

➢ Therefore, it should pay more attention to

the key areas on which the performance
of the whole organisation depends.
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➢ B) Management by Exception

“If you try to control everything, you may

end up controlling nothing”, and states
that the manager of an organisation
should focus on the significant deviations
which go beyond the set deviation limit.
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➢ For this, the managers should

establish a range of deviations for the
performances and any deviation that
goes beyond the set range must be
given attention.
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✓ Critical Point Control is different from

Management by Exception. According to
the former, the managers of an
organisation should concentrate on the
key activities.
✓ However, according to the latter, the
managers should give attention to
activities with major deviations no matter
where the deviation takes place.
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✓ Critical Point Control is different from

Management by Exception. According to the
former, the managers of an organisation
should concentrate on the key activities.
✓ However, according to the latter, the
managers should give attention to activities
with major deviations no matter where the
deviation takes place.
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C) Feedforward Controls

✓ Feedforward controls are proactive and

preventative measures employed in
management to anticipate and mitigate
potential problems before they materialize.

✓ This control mechanism is beneficial for

managers as it allows them to plan effectively
by regulating resources such as employees,
raw materials, and capital in advance.
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D) Concurrent Controls

✓ Concurrent controls, also referred to as

real-time or steering controls, involve
monitoring ongoing activities and
processes to maintain quality and
consistency.
✓ Unlike feedforward controls that
anticipate problems, concurrent controls
focus on addressing issues as they arise.
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E) Feedback Controls

✓ Feedback controls, also known as post-

action controls, come into play after an
activity or process has been completed.

✓ This control type entails reviewing

outcomes and performance against
predetermined standards to determine if
objectives have been met.
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5. Taking Corrective Action

If the deviations are within the acceptable

limits set by the managers, then there is no
need to take corrective action. However, if
the deviations go beyond the set acceptable
limit in the key areas, then proper and
immediate managerial actions are required.
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Deviation
It means the difference between the
actual performance and standard
performance can be Positive and
Negative.
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Positive Deviation: It is a kind of

deviation when the actual performance
is better than the standard performance.

Negative Deviation: It is a kind of

deviation when the actual performance
is less than the standard performance.
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Controlling Process
TARGET
PERFORMANCE

IF ANY VARIATIONS
MAKE CHANGES IN
PERFORMANCE

COMPARE THE TEST

RESULTS WITH TARGET
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THANK YOU