Process of Controlling

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Process of Controlling

1. Establishing Standards

  • Definition: Standards are set targets or criteria against which performance is measured.
  • Types: Measurable standards (quantifiable) and non-measurable standards (intangible aspects like attitudes).
  • Purpose: Provides a benchmark for evaluating performance and guiding control efforts.

2. Measurement of Actual Performance

  • Process: Involves assessing actual performance against established standards.
  • Challenges: Quantitative measures (like cost, output) are straightforward; qualitative measures (like managerial performance) rely on subjective assessment.
  • Methods: Utilizes various reports (weekly, monthly) and observations to gather performance data.

3. Comparison of Actual Performance with Standards

  • Importance: Identifies deviations (gap between actual and planned performance).
  • Focus: Managers prioritize significant deviations (major impact on business operations).
  • Control by Exception: Focuses management attention on critical deviations while minor ones are overlooked.

4. Identification of Causes of Deviation

  • Analysis: Managers investigate reasons behind deviations.
  • Factors: Errors in planning, coordination issues, implementation flaws, and ineffective supervision or communication.
  • Insight: Understanding root causes informs corrective actions.

5. Taking Corrective Actions

  • Steps: Address deviations through corrective measures (immediate actions to rectify issues).
  • Adaptation: If necessary, revise plans based on new insights or changing circumstances.
  • Importance of Follow-Up: Continuous monitoring ensures sustained control effectiveness.

Additional Information

  • Integration with Planning: Controlling complements planning by ensuring goals are achieved and deviations are corrected promptly.
  • Continuous Process: Controlling involves ongoing monitoring and adjustment, reflecting dynamic business environments.
  • Feedback Loop: Information gathered during control processes feeds back into future planning cycles, enhancing organizational learning and adaptation.

Summary

The controlling process encompasses setting standards, measuring performance, comparing outcomes with standards, identifying causes of deviations, and taking corrective actions. It is a vital managerial function that ensures organizational goals are met effectively and efficiently, promoting continuous improvement and adaptation in response to changing conditions.