Definition of Control Process
Controlling is the process of assessing and modifying performance to ensure that the company's objectives and plans for achieving them are met.
Control is the final role of management. The controlling function will become obsolete if other management functions are properly carried out. If there are any problems in the planning or actual performance, control will be required.
Controlling ensures that the proper actions are taken at the appropriate times. Control can be thought of as a process through which management ensures that the actual operations follow the plans.
The company's managers check the progress and compare it to the intended system through managing. If the planned and real processes do not follow the same path, the necessary corrective action can be implemented.
The control process is the careful collection of information about a system, process, person, or group of people which is required to make necessary decisions about each of the departments in the process. Managers in the company set up the control systems which consist of the four prior key steps which we will discuss in the later section.
The performance of the management control function is important for the success of an organization. Management is required to execute a series of steps to ensure that the plans are carried out accordingly. The steps that are executed in the control process can be followed for almost any application, also for improving the product quality, reduction of wastage, and increasing sales.
What is Controlling?
The Controlling process assures the management that the performance rate does not deviate from its standards.
The controlling Process consists of five steps:
Setting the standards.
Measuring the performance.
Comparing the performance to the set standards
Determining the reasons for any such deviations which is required to be paid heed to.
Take corrective action as required. Correction can be made in regards to changing the standards by setting them higher or lower or identifying new or additional standards in the department.
Elements and Steps of Control Process
Establishing Performance Measuring Standards and Methods
Standards are, by definition, nothing more than performance criteria. They are the predetermined moments in a planning program where performance is measured so that managers may receive indications about how things are doing and so avoid having to monitor every stage of the plan's execution.
This simply means setting up the target which needs to be achieved to meet the organizational goals. These standards set the criteria for checking performance. The control standards are required in this case.
Standard elements are especially useful for control since they help develop properly defined, measurable objectives.
Measuring the Performance
Performance against standards should be measured on a forward-looking basis so that deviations can be discovered and avoided before they happen. Appraising actual or predicted performance is relatively simple if criteria are properly drawn and methods for determining exactly what subordinates are doing are available.
The actual performance of the employee is then measured against the set standards. With the increase in levels of management, the measurement of performance becomes quite difficult.
Determining if the Performance is up to par with the Standard
In the control process, determining if performance meets the standard is a simple but crucial step. It entails comparing the measured results to previously established norms. Managers may assume that "all is under control" if performance meets the benchmark.
Comparing the degree of difference between the actual performance and the set standard.
Developing and Implementing a Corrective Action Plan
This phase becomes essential if performance falls short of expectations and the analysis reveals that corrective action is required. The remedial measure could include a change in one or more of the organization's functions.
This is being initiated by the manager who corrects any sorts of defects in the actual performance.
Types of Control
There are five different types of control:
Feedback Control: This process involves collecting the information on which the task is being finished, then assessing that information and improvising the same tasks in the future.
Concurrent control (also known as real-time control): It investigates and corrects any problems before any losses arising. An example is a control chart.
This is the real-time control, which checks any problem and examines the same to take action before any loss has been caused.
Predictive/ feedforward control: This type of control assists in the early detection of problems. As a result, proactive efforts can be done to avoid a situation like this in the future. Predictive control foresees the problem ahead of its occurrence.
Behavioral control: This is a direct assessment of managerial and staff decision-making rather than the consequences of those decisions. Behavioral control, for example, sets incentives for a wide range of criteria in a balanced scorecard.
Financial and non-financial controls: Financial controls refer to how a firm manages its costs and spending to stay within budgetary limits. Non-financial controls refer to how a company manages its costs and expenses to stay within budgetary constraints.
Features of Controlling
The features of controlling are discussed point-wise to give a clear insight into the concept. The features are as follows:
Controlling helps in achieving organizational goals.
The process facilitates optimum use of resources.
Controlling judges, the accuracy of the standard.
The process also sets discipline and order.
The controlling process motivates the employees and boosts the employee morale, eventually, they strive and work hard in the organization.
Controlling ensures future planning by revising the set standards.
This improves the overall performance of an organization.
Controlling minimizes the commission of errors.
Advantages of Controlling
The organization inculcates the process of controlling due to its undying advantages. The advantages of control are as follows:
The Controlling Process saves time and energy.
This allows the managers to concentrate on important tasks, and also allows better utilization of the managerial resource.
Assures timely and corrective action to be taken by the manager.
In contrast to this, controlling suffers from the disadvantage that the organization has no control over the external factors that also affect the organization. The controlling Process becomes a costly affair, especially for small companies.
FAQs on Control Process
1. How are Performance Standards Set?
Performance standards are the set of monetary terms like revenue, costs, or profits. They also may be stated in other terms, such as units produced, the number of defective products that are produced, or levels of quality or customer service.
Performance Standards are Set According to:
The position, and not individually.
They are set as specific indicators of success.
They are set as meaningful, reasonable and attainable standards.
Performance standards are expressed in terms of quantity, quality, timeliness, cost, safety, or via the outcomes.
2. What are Control Standards?
Control standards are categorized as quantitative and qualitative standards. The Quantitative standards are expressed in terms of money. The Qualitative standards, on the other hand, are intangible items. Control standards are a target against which the subsequent performance is to be compared. The standards might indicate how well a product is to be made or how effectively a service is to be delivered, all these are to be processed. The standards reflect specific activities or behaviors which are necessary to achieve the organizational goals.
3. How does Predictive Control Works?
Predictive control is an advanced method that is used for the process of control that is used to control a process by satisfying a range of standards. The predictive controllers rely on the dynamic models of the process control. The predictive process helps the department to know the constraints much before.
4. How does control affect managerial effectiveness and efficiency?
Management control is one of the four management functions that are critical to an organization's efficiency and effectiveness. Managers can successfully implement plans and controls using this approach, allowing them to track progress toward their goals.
5. What are the difficulties associated with a control process?
Any organization's control system relies on accurate and timely reporting on real performance. Written reports are the most common form of feedback. Writing and transmitting control reports takes time. When an activity evolves at a rapid pace, feedback becomes obsolete by the time reports reach higher levels of authority. The adaptive process is slowed by such a time lag in feedback.
Second, when control standards are incorrect, it is difficult to distinguish between right and improper performance because the decision-maker is unsure if the variance in performance is attributable to an out-of-control activity or to incorrectly defined criteria. Incomplete information, as well as too much information, is hazardous to control.
Finally, employees frequently regard any control system as a means of putting pressure on them. They say that the targets are unrealistic, that the appraisal period is too short to allow for a fair evaluation, and that the control personnel lack objectivity.
6. What are the benefits of having control?
The Controlling Process helps you save time and energy. This allows managers to focus on more critical duties while also making greater use of managerial resources. Assures that the manager will take corrective action promptly.
7. What's the difference between closed-loop and open-loop management control?
Closed or open-loop control actions are also possible. The most obvious distinction between the two is feedback. In an open-loop control system, the output does not affect the control action (also known as a non-feedback system). The current output of a feedback system, also known as a closed-loop control system, is examined and adjusted to the desired condition. In these systems, the output decides the control action. Each control style has its own set of benefits and is best suited to certain control tasks. Open-loop controls require some human intervention, whereas closed-loop controls are best suited for automated settings.