Controlling in Management – Meaning, Nature, Process, and Importance
Can Organizations Afford to Function Without Feedback?
Imagine a business where no one checks if goals are met, mistakes are corrected, or resources are used efficiently. Just like a pilot flying blind, such an organization is bound to fail. Controlling is that critical function in management that helps monitor, evaluate, and align performance with goals.
Introduction
In management, controlling is not about exercising power or authority—it’s about making sure that actual outcomes match planned objectives. It serves as the final link in the management chain, but also feeds back into the beginning, helping improve planning and execution.
Controlling acts as a feedback and improvement mechanism that ensures the organization moves in the right direction and achieves its long-term vision.
Definition of Controlling
Koontz and O'Donnell:
“Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished.”
Theo Haimann:
“Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals, and acting if necessary, to correct any deviation.”
Thus, controlling helps ensure that performance conforms to plans and provides a foundation for future success.
Nature/Features of Controlling
- Goal-Oriented - Controlling is always aimed at achieving the objectives of the organization.
- Universal Function - Applicable at all levels and in all departments—whether production, HR, marketing, or finance.
- Continuous Activity - It does not occur at a single point in time but continues throughout the process.
- Forward and Backward Looking - It relies on past performance to make decisions for the present and future.
- Measurement-Based - Relies on both qualitative and quantitative performance metrics like output, quality, and deadlines.
- Corrective Function - Its primary role is to detect and correct deviations from planned performance.
Process of Controlling
The controlling process is a logical sequence of five interconnected steps:
|
Step |
Description |
|
1. Setting Standards |
Clear and measurable performance benchmarks must be defined (e.g., cost, time, quantity, quality). |
|
2. Measuring Performance |
Actual performance is measured through reports, audits, feedback, KPIs, etc. |
|
3. Comparing Results |
Actual outcomes are compared with established standards to detect variances. |
|
4. Analyzing Deviations |
Investigation of reasons for underperformance or overachievement. |
|
5. Taking Corrective Action |
Modifying strategies, processes, or behavior to close the performance gap. |
Types of Control
|
Type |
Description |
|
Pre-control |
Control before work begins (e.g., hiring right people, planning). |
|
Concurrent |
Real-time control while activity is ongoing (e.g., live monitoring of operations). |
|
Post-control |
Evaluation after activity is completed (e.g., final audits, reports). |
Importance/Significance of Controlling
- Ensures Goal Achievement: Keeps organizational efforts aligned with objectives.
- Improves Efficiency: Identifies waste and suggests optimization.
- Facilitates Coordination: Establishes standard procedures across departments.
- Encourages Accountability: Assigns responsibility and identifies areas for improvement.
- Reduces Uncertainty: Minimizes risks by early detection of errors.
- Guides Planning: Past feedback enhances future planning accuracy.
- Improves Employee Performance: Through performance appraisals and feedback systems.
Real-Life Case Study: Tata Steel
Tata Steel employs a detailed controlling process at every level of operation. Through Total Quality Management (TQM) and Six Sigma tools, the company ensures every step—from procurement to production and delivery—is monitored and corrected. In one instance, after identifying a recurring defect in a steel batch, they used root-cause analysis (a controlling tool) to trace the problem back to a supplier. Immediate corrective action helped save millions and maintain global standards.
This case highlights how strategic controlling protects both brand reputation and cost efficiency.
Key Takeaways
- Controlling ensures that plans are implemented effectively and objectives are achieved.
- It is a universal, continuous, and forward-looking function.
- The process includes setting standards, measurement, comparison, deviation analysis, and correction.
- It plays a key role in resource optimization, risk reduction, and employee accountability.
- Real-world businesses like Tata Steel showcase the value of a strong control mechanism.