Controlling: Checking That Work Goes as Planned

Concept of controlling

Controlling means making sure that work is done as planned. The manager sets a standard (the target), checks the actual result, finds the gap (called a deviation) and takes steps to fix it.

Features

• It is goal-oriented: it keeps the firm on track to its goals.
• It is a continuous process: checking never stops.
• It is a pervasive function: every manager at every level does it, in every type of firm.
• It is both backward-looking (checks past work) and forward-looking (improves future work).

Importance of controlling

• Helps reach goals: it keeps work on the right path and warns early if things go wrong.
• Judges the accuracy of standards: if everyone misses the target, maybe the target itself is wrong.
• Makes good use of resources: it cuts waste of money, material and time.
• Improves employee motivation: people know what is expected and on what basis they will be judged.
• Ensures order and discipline: close checking reduces dishonest and careless behaviour.
• Helps coordination: all departments work to the same standards.

Relationship between planning and controlling

Planning and controlling are closely linked.

• Planning comes first. It sets the goals and standards. Without a plan, there is nothing to check against.
• Controlling follows. It checks whether the plan is working. Without control, a plan is only a hope.
• Planning is looking ahead (prescriptive). Controlling looks back (evaluates past work) and ahead (its lessons improve the next plan).
• So we say: planning without controlling is meaningless, and controlling without planning is blind.

Think of a loop: plan → do → check → correct → better plan.

Steps in the controlling process

1. Setting performance standards: clear targets. Quantitative (in numbers: cost per unit, units per day, sales in rupees) or qualitative (in words: good image, polite service). Numbers are easier to check.
2. Measuring actual performance: through counting, sample checks, personal observation and reports. Measure in the same units as the standard.
3. Comparing actual with standard: this shows the deviation. Deviation = actual − standard.
4. Analysing deviations: not every gap needs action. Two useful ideas:
   • Critical point control: watch only the key result areas (KRAs) that affect the whole firm, e.g. a 5% rise in labour cost matters more than a 20% rise in stationery cost.
   • Management by exception: act only on big deviations beyond a set limit; small ones inside the limit are left alone. This saves the manager's time.
   Then find the cause: unrealistic standard, faulty process, poor resources, outside factors, etc.
5. Taking corrective action: fix the cause. Examples: train workers, repair or replace machines, improve materials, change the method, or revise the standard if it was unrealistic.

Key formulas and definitions

• Deviation = Actual performance − Standard performance.
• Deviation % = (Actual − Standard) ÷ Standard × 100.
• Steps: set standards → measure → compare → analyse deviations → corrective action.
• Critical point control: watch key result areas only.
• Management by exception: act only on deviations beyond the set limit.
• Planning sets standards; controlling checks them.

Worked examples

Common mistakes

• Thinking controlling means strict punishment. It means checking and correcting, not blaming.
• Thinking every deviation needs action. Management by exception says act only on big ones.
• Saying controlling only looks back. It also looks forward by improving future plans.
• Forgetting that planning must come first. Without standards there is nothing to control.