Controlling is the process by which managers ensure that the real action was in line with the planned activities. The plan establishes the organization's goals and objectives, and means to achieve them. Monitoring of the progress in achieving the objectives allows managers to detect early enough deviations from the plan, allowing them to take corrective action. Effective supervision is one of the most important tasks of a good manager. Relationships between planning and control are presented on fig. 1.
Managerial control - is a systematic action to establish performance standards for the planned objectives, design information feedback, compare actual performance with set standards and measure the deviation, all steps necessary to ensure that all enterprise resources were effectively used. The need for controlling stems from the combination of well-planned objectives, strong organization, skilful leadership and motivation has little chance of success if there is no proper system of supervision.
Factors influencing the need controlling in management
- The changing environment is a natural and permanent feature of every element of the organization's setting.. Changing customers, new products, new businesses are common. By controlling manager detects the changes, determines their impact on the organization and take adaptation measures, in order to eliminate any threats or utilize any emerging opportunities.
- Complexity - Organizational development induces an increase in internal complexity. There are variety of goods, many diverse markets, ever changing needs of customers.
Decentralization of the organization, creation of the departments, divisions, would have been impossible without the use of appropriately designed monitoring and supervision systems
- Human errors - To err is human. Each employee may be wrong, order inappropriate parts, make the wrong decision, wrongly resolve the situation. The control system allows managers to detect errors and correct them before an adverse impact
- Delegation of powers - One of the key tasks of a good manager, but requires him to regularly check whether their subordinates perform delegated tasks. The employee may use their powers not in accordance with the objectives of the organization and the manager commands, but through the control system manager can detect early misbehaviour.
- Excess of control is detrimental both to the organization and its members
- Excessive, bureaucratic control, limits also the number of good behaviours, kills initiative, stifles creativity and can lower the efficiency of the organization
- The level of supervision depends on the organization, other may be in a drug factory other in small plant.
- Lack of control can cause that the organization will waste resources, the task will not be performed and the objectives pursued
- Limiting the control does not lead to increased freedom in the organization as it causes anarchy, insecurity and inability to predict the consequences of employee actions.
- Managers should strike an appropriate balance between the necessary controls in an organization, and individual freedom of employees.
- Efforts should be made to ensure maintaining order and efficiency of the organization, without suppressing freedom and initiative of employees.
Types of supervision and control
- Preliminary checks: completed before taking action, involving necessary human, material and financial resources.
Checking if they are at designated place and time, in planned quantity and quality.
- Control: Detect deviations from established standards, allows to make corrections before the end of a particular sequence of actions.
Important feature of control is short time from onset of deviations to obtaining information by the manager
- Decision control - involves the acceptance or rejection of certain courses of action. It involves verifying that certain conditions are met before continuing with action. Frequently it is additional control function performed by another manager, usually at a higher level of management
- Final Inspection - Involves measuring results of the completed action. Managers determine causes of deviations from the plan or standards, and the results are used as goals for similar activities in the future. It is an instrument used for rewarding employees.
Process of controlling
- Setting the desired results - Manager should determine precisely the results that he wants to get. Objectives should be expressed numerically and should set in time.
- Define indicators - for each goal manager must specify a set of reliable metrics that allow the assessment of the degree of achievement. Performance indicators may relate to the results of activities, symptoms of adverse situations, changes in assumptions, changes in environment.
- Determination of normative indicator values - is one of the most difficult parts of the process of monitoring. Manager determine the desired numerical values for the standards. Previously established measures serve as an instrument of motivation and evaluation of effectiveness
- Creating an information system and feedback - Preparing resources needed for gathering the information necessary to calculate the performance indicators and compare them with the standards. Selecting the forms and methods of communication, frequency of collection of information, rules for the transfer of information on deviations.
- Evaluation of information and corrective action - Managers compare performance indicators (standards) with the results of measurements of the current state of the system. In case of deviations he prepares plan, evaluates it and implement needed corrective actions.
Types of indicators in controlling and measurement rules
- Historical, external - internal, technical, Subjective - Objective
- Organizational, quantitative and qualitative
Number of measurements should be restricted. Increasing the number of measurements restricts the freedom of the employee. It seeks to demonstrate only the work results that are the subject of observation and measurement.
The frequency of measurements depends on the nature of the task. Manager should keep in mind that proper planning of time of measurement is necessary to avoid measurement errors. He should use a random selection of the time of measurement.
- Management functions
- Operational controlling
- Effective system of control
- Origins of controlling
- Differences between control and controlling
- Turley, S., & Zaman, M. (2004). The corporate governance effects of audit committees. Journal of management and governance, 8(3), 305-332.