Controlling

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

Fig. 1. Relationships between planning and control

• 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.

Controlling rules

• 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.

See also:

• Management functions
• Operational controlling
• Effective system of control
• Origins of controlling
• Differences between control and controlling

Examples of Controlling

• Cost Control: This is the process of monitoring and controlling the costs of a project or business to ensure they stay within a certain budget. Cost control includes setting a budget, tracking expenses, and making adjustments as needed. For example, if a company is launching a new product, they may set a budget for the project and then track expenses on a regular basis to ensure that the project does not exceed the budget.
• Quality Control: This is the process of ensuring that a product or service meets certain standards of quality. Quality control includes inspections and reviews of products to ensure they meet the required specifications. For example, a manufacturing company may have quality control inspectors that inspect products to make sure they are free from defects and meet the required quality standards.
• Performance Control: This is the process of evaluating the performance of a business or organization. Performance control includes measuring the performance of the organization against certain goals, targets, and standards. For example, a company may measure the performance of its sales team against certain goals and targets to ensure that they are meeting their objectives.
• Risk Control: This is the process of identifying, analyzing, and managing risks in a business or organization. Risk control includes assessing the potential risks associated with a project or business and then developing strategies to manage those risks. For example, a company may assess the risks associated with a new project and then develop strategies to reduce the potential impact of those risks.

Advantages of Controlling

One of the main advantages of controlling is that it helps to ensure that goals are achieved. It also enables managers to make timely decisions, as it helps to identify problems, opportunities, and areas for improvement. In addition, controlling enables managers to measure performance and results, which is important for making the right decisions. Furthermore, it helps to ensure that resources are used efficiently and optimally. Finally, controlling allows for effective communication between all the departments and teams, which is necessary for achieving the organization's goals. *It helps to ensure that goals are achieved *It enables managers to make timely decisions *It helps to identify problems, opportunities, and areas for improvement *It enables managers to measure performance and results *It helps to ensure that resources are used efficiently and optimally *It allows for effective communication between all the departments and teams

Limitations of Controlling

Controlling has several limitations, including:

• Time consuming – A lot of time is spent on collecting and analyzing data.
• Subjective Interpretations – It is difficult to interpret the data objectively due to the subjective nature of the data.
• Costly – The cost of collecting and analyzing data can be costly.
• Communication Issues – It can be difficult to effectively communicate the data to the necessary stakeholders.
• Inaccurate Data – Poorly collected or incorrect data can lead to inaccurate results and conclusions.
• Unclear Goals – Without clearly defined goals, it can be difficult to develop an effective control system.
• Overly Complex - If the control system is overly complex, it can be difficult to manage and maintain.

Other approaches related to Controlling

At the core, controlling involves effectively monitoring and maintaining the plans set by management. However, there are other approaches related to controlling that can be employed by managers to ensure the successful completion of their goals:

• Establishing Standards: Establishing standards is an important part of controlling. These standards can be used to compare current performance to and help identify areas for improvement.
• Monitoring Performance: Managers should regularly monitor performance, both individual and collective, to ensure that goals are being met. This can be done through regular reviews and evaluations.
• Adjusting Plans: Adjusting plans is an important part of controlling. If plans are not working, managers should be able to quickly adjust them to better meet the desired goals.
• Taking Corrective Action: If deviations from the plan are identified, managers should take corrective action to ensure that the plan is back on track.

In summary, controlling involves effectively monitoring and maintaining the plans set by management, as well as establishing standards, monitoring performance, adjusting plans, and taking corrective action. Together, these approaches can help ensure that plans are being followed and goals are being achieved.

Controlling — recommended articles

Internal benchmarking — Implementation and control of marketing plan — Business process mapping — Managerial controlling — Planning and control — Types of control system — Operational control — Management functions — Strategy deployment

References

• Turley, S., & Zaman, M. (2004). The corporate governance effects of audit committees. Journal of management and governance, 8(3), 305-332.