Business Studies Part I
Business Studies Part II

Controlling: Meaning & Importance

Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates, a manager needs to exercise effective control over the activities of the subordinates. In other words, controlling means ensuring that activities in an organisation are performed as per the plans. Controlling also ensures that an organisation’s resources are being used effectively and efficiently for the achievement of predetermined goals. Controlling is, thus, a goal-oriented function.

Controlling function of a manager is a pervasive function. It is a primary function of every manager. Managers at all levels of management- top, middle and lower-need to perform controlling functions to keep a control over activities in their areas. Moreover, controlling is as much required in an educational institution, military, hospital, and a club as in any business organisation.

Controlling should not be misunderstood as the last function of management. It is a function that brings back the management cycle back to the planning function. The controlling function finds out how far actual performance deviates from standards, analyses the causes of such deviations and attempts to take corrective actions based on the same. This process helps in formulation of future plans in the light of the problems that were identified and, thus, helps in better planning in the future periods. Thus, controlling only completes one cycle of management process and improves planning in the next cycle.

Importance of Controlling:

Control is an indispensable function of management. Without control the best of plans can go awry. A good control system helps an organisation in the following ways:

  • Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action.it, thus, guides the organisation and keeps it on the right track so that organisational goals might be achieved.
  •  Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light of such changes.
  • Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.
  • Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus, motivates them and helps them to give better performance.
  • Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimise dishonest behaviour on the part of the employees by keeping a close check on their activities. The box explains how an import export company was able to track dishonest employees by using computer monitoring as a part of their control system.
  • Facilitating coordination in action: Controlling provides direction to all activities and efforts for achieving organisational goals.

The importance of controlling function of management is described below:

  1. Accomplishing organisational goals:The controlling function facilitates constant monitoring of the actual performance in comparison to the predetermined standards and brings to light the deviations, if any, and indicates corrective action. All these activities ensure that organisational goals are realised efficiently and effectively.
  2. Judging accuracy of standards:A good control system enables management to verify whether the standards set are accurate and objective. Moreover, helps to review and revise the standards in light of changes taking place in the organisation or business environment in general.
  3. Making efficient use of resources:By implementing a good control system a manager seeks to reduce wastage and spoilage of resources. This is because each activity is performed in accordance with predetermined standards and norms rather than hit and trial method.
  4. Improving employee motivation:An effective control system seeks to provide motivation to the employees as they are made aware well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. This approach helps them to give better performance.
  5. Ensuring order and discipline:A constant check on the behaviour and work of the employees leads to creation of an atmosphere of order and discipline in the organisation.