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Controlling
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Controlling

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  • 1. ControllingControlling ensures that activities conform to the standards set in advance so thatorganizational goals are achieved.Controlling means ensuring that activities in an organization are performed as per theplans. Controlling also ensures that an organizations resources are being used effectivelyand efficiently for the achievement of predetermined goals.Controlling function of a manager is a pervasive function.Controlling only completes one cycle of management process and improves planning inthe next cycle. www.commerceatease.com
  • 2. Importance of Controlling1.Accomplishing organizational goals: It brings to light the deviations, if any, andindicates corrective action.2.Judging accuracy of standards: It helps to verify whether the standards setare accurate and objective.3.Making efficient use of resources: By exercising control, a manager seeks toreduce wastage and spoilage of resources. 4.Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do . 5.Ensuring order and discipline: It helps to minimize dishonest behavior on the part of the employees by keeping a close check on their activities. 6.Facilitating coordination in action: Controlling provides direction to all activities and efforts of each department and employee by predetermined standards which helps in coordination. www.commerceatease.com
  • 3. Limitations of Controlling1.Difficulty in setting quantitative standards.2.Little control on external factors.3.Resistance from employees.4.Costly affair. www.commerceatease.com
  • 4. Relationship between Planning and Controlling*Planning and controlling are inseparable twins of management.*Standards of performance set in Planning serve as the basis of controlling.*Planning without controlling is meaningless.*Controlling is blind without planning.*Planning is a prerequisite for controlling.*Planning is an intellectual process of taking decisions, Controlling, checks whetherdecisions have been put into desired action.* Planning is prescriptive whereas, controlling is evaluative. www.commerceatease.com
  • 5. Controlling ProcessSteps.1. Setting performance standards2. Measurement of actual performance3. Comparison of actual performance with standards4. Analyzing deviations5. Taking corrective action1.Setting Performance Standards: Standards are the criteria against which actual performance would be measured. Standards can be set in both quantitative as well as qualitative terms.2.Measurement of Actual Performance: There are several techniques for measurement of performance like personal observation, sample checking, performance reports, etc.3.Comparing Actual Performance with Standards: Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms. www.commerceatease.com
  • 6. Controlling Process contd.4. Analyzing Deviations: Some deviation in performance can be expected in allactivities. So it is important to determine the acceptable range of deviations. Critical Point Control: Control should, focus on key result areas (KRAs) which are critical to the success of an organization. Management by Exception: An attempt to control everything results in controlling nothing.5.Taking Corrective Action: No corrective action is required when the deviations are within acceptable limits. But, when the deviations go beyond the acceptable range, especially in the important areas, it requires immediate managerial attention. www.commerceatease.com
  • 7. Budgetary ControlMeaning of Budgetary Control:It is a technique of managerial control in which all operations are planned inadvance in the form of budgets and actual results are compared with budgetarystandards.Budget: It is a quantitative statement for a definite future period of time for the purposeof obtaining a given objective. It is also a statement which reflects the policy ofthat particular period. www.commerceatease.com
  • 8. Advantages of Budgetary Controlling1.Budgeting helps in attainment of organizational objectives by focusing onspecific and time-bound targets.2. Budgeting enables employees to perform better by motivating them by fixingthe standards against which their performance will be appraised .3. Budgeting helps in optimum utilization of resources by allocating themaccording to the requirements of different departments.4. Budgeting is also used for achieving coordination among different departmentsof an organization and highlights the interdependence between them.5. It facilitates management by exception by stressing on those operations whichdeviate from budgeted standards in a significant way. www.commerceatease.com