Controlling Test - 5

Controlling being an integral part of the management process is a prime function of the process. Small , medium and large business organizations necessarily are engaged in the process of managing their business units efficiently and effectively through the management process. Controlling aims at ensuring that the organizational resources are used efficiently and effectively, thus making it necessary for all kinds of business concerns to execute the control function.

The process of controlling a task is complete only when corrective actions are taken for the variations or deviations that have been identified through the process of comparison of actual with standards set. The whole process of control functions becomes redundant if corrective actions are not taken by addressing the deviations that are identified.

The audit of work done may show negative deviations due to many reasons. The reasons may be external or internal. One of the reasons for low or average performance of employees is lack of motivation or low morale among the workforce. This has to be corrected to see that performance does not get affected. The most impressive and effective corrective action is designing suitable incentives to boost performance. While designing suitable incentives organizations need to focus on the performance bench marks that would make employees aspire to earn the incentives.

Employees have the clarity of goals to be achieved thus, making it clear and easy for performance, Organisational objectives are stated, thus making the employee set up achievable standards towards achieving the organizational goals. Thus, an efficient control system is able to achieve better results in terms of organizational goals, employee morale and motivation,clarity in standards and setting up of achievable standards. 

Control function of management is an audit function. Thereby it involves taking a stock of the work done which involves a lot of time and human labour through the use of various techniques, that makes it expensive in terms of loss of time and labour hours involved.

Control function of management is a activity that looks back at the plan made and compares it by looking forward at the work done or executed. This makes control function identify the deviations between the planned and the executed. Thus, not giving it any scope to avert the deviation at any juncture of performance.

As the material used is defective the quality of the end product would also be defective. Thus, the corrective action to be taken by the materials management department or the stores manager is to check the quality of the material purchased and change the quality specifications of the material used.

Defective machinery has to be understood as a machinery that is not in a effective working condition. A machinery that is defective or not in a working condition can be repaired or replaced depending upon the kind of problem that is encountered while using the machinery. 

All management functions focus on achieving organizational goals. Thus, planning, organizing, co-ordinating and controlling focus is in the direction of achieving the set organizational goals.

As in the understanding of the term management, means - managing all the resources that is man, machines, mechanisms, money and methods of the organisation or company performing effectively and efficiently to achieve the organisational and individual goals. Thus, auditing the functions of management means checking the performance of the company.  

The process of controlling starts with planning the task and ends with taking corrective actions to rectify the variations or deviations occured. Thus, if we need to take corrective actions we need to access the deviations. Thereby looking into the plan and comparing with the actuals is an integral part of controlling function.

There are many ways to measure performance of an employee. some of them are Graphic rating scale, Forced distribution method, management by objectives, 360 degree performance appraisal system, personal observation, sample checking, performance reports written by supervisors/ clients etc., 

Setting performance standards through the process of planning forms the first function of management control. Work plan or finance plan or strategic plan gives a direction for performance and audit. Thus, without laying down work plan it would be like working without a foresight of the path that has to be undertaken. 

The techniques of controlling are budgetary control, break even analysis, return on investment, management by objectives, management audit , financial statement analysis , direct supervision and observation, Management information system, PERT and CPM techniques and self-directed control .

Controlling function encompasses the activity of auditing the work done by the employee and organization as a whole with the standards and goals set for the employee and organization, thus it is a forward and backward looking function.

The steps in controlling process are 1. setting performance standards, 2. measurement of actual performance, 3. comparing actual performance with standards set, 4 analysis of deviations or variances, 5 communicating the variance or deviations 6 taking corrective action. 

As controlling is the doing function of management activity, that is comparing the executed work with the planned work and measuring the difference and communicating the difference with the performer, it is a practical job. It is neither physical nor a thought of mind and not a theory proposed.

There are five/six steps in the process of controlling which starts with setting performance standards, communicating the standards, measuring the actual performance, looking for or measuring the deviations of performance from the set standards and lastly taking corrective actions. Thus, making the process of controlling effective. 

Obsolete machinery means that such a kind of machine is not more in use or the machine is old-fashioned or such machine uses an old technology. Thus, the best corrective action to make the machiney useful is to change the technology used in the machinery.

Controlling is about ensuring that tasks are done in the organisation according to the plan and directed towards achieving the organisational goals. Thus, controlling is a pervasive force that drives the organizational mechanisms towards its goals. It is an ongoing process to keep checking the direction of progress of execution of the task towards reaching the goal. 

Setting standard can be qualitative and quantitative or both. Quantitative standards are the bench marks that are laid in measurable terms. Thus, asigning a specific time schedule to execute a task is measurable making it a quantitative standard.

In the third step of the controlling function in an organization the actual are compared against the set standards. When such a comparison is made and there is a gap in terms of quantity and quality of work done such a gap is called deviation. If the actual performance is less than the set standard then it is called negative deviation.

To audit means comparing the performance with the standards set, thus it is important to set budget - that is set standards in terms of achievables, eg. in sales budget - no. of units to be sold by the salesman is to be budgetted,  so that it facilitates measuring the varience of performance. 

The process of controlling starts from planning and ends with taking corrective steps in the direction of deviations identified. But, the process is expensive in terms of time spent and the expenditure incurred on the technology used or technique adopted. It is important that the organization achieves maximum profit through the effective and efficient use of all resources employed. Thus, when a tally is drawn between the expenditure and time spent on the controlling activity and the result achieved may make expenditure on the activity of controlling a limitation.

All functions of management like planning, co-ordinating, controlling, directing, communicating etc is an all inclusive and pervasive function performed by people working at any level in the organisation. For example the lower level employees also plans his activity, co-ordinates with fellow collegues and higher up supervisors and also works to meet the standards of performance set by him or his superiors to ensure that the work performance meets the organizational goals. 

The techniques of controlling are direct supervision and observation, financial statement analysis, budgetary control, break even analysis, return on investment, management by objectives, management audit, management by objectives (MBO) , MIS- Management Information Systems, PERT and CPM and self control.

The third step in controlling is comparing the actual performance against the set standard of a particular task. When the actual raises above the mark of the set standard then such a deviation is called positive deviation. Such a deviation is also a hint towards a requisition of revising the set standard keeping in mind a continuous enhancement in performance levels.

Responsibility accounting is a system of dividing an organization into units like divisions, departments, branches etc and facilitating the control process of an organization through planning and auditing. Thus, responsiblity accounting can be applied to investment centre, cost centre and profit centres of the organization. 

Managing any task or job starts with planning the task that is looking ahead or forward. When management of the task has to be effective and efficient it has to be audited or controlled by looking back or taking a check of how the task has been conducted or performed. Thus, delivering the task effectively and also enhancing the performance. 

Control as a function identifies deviations between the actual and set standard of a task.