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Question

Explain the importance of controlling in an organisation What are the problems faced by the organisation in implementing an effective control system?


Solution

Importance of Controlling Controlling is an indispensable function of management due to the following reasons:

(i) Accomplishing Organisational Goals: It measures s progress towards the organisational goals and find out deviations. In the absence of a control system, activities may not be carried out according to plans.

(Ii) Judging Accuracy of Standards: Through an effective control system, managers can easily judge the accuracy of standards.

(iii) Making Efficient Use of Resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources.

(iv) Improving Employees Motivation: It helps employees in realising, what they are expected to do and what are the standards of performance, on the basis of which they are appraised.

(v) Ensuring Order and Discipline: By keeping a check on the activities of the workers controlling creates an atmosphere of order and discipline among them.

(vi) Facilitating Coordination in Action: It provides direction to all activities and each department and employee is governed by predetermined standards, which helps in establishing coordination among them.

Limitations of Controlling The process of controlling suffers due to the following reasons: 

(i) Difficulty in Setting: Quantitative standards control system is effective when cases, like employee morale, job satisfaction, etc, it is not possible to set quantitative standards.

(ii) Little Control on External Factors: There are certain external factors like change in government policies, technological changes, competition, etc, which are beyond the control of the organisation. Thus, controlling such factors becomes difficult.

(iii) Resistance from Employees: Employees often resist control as they consider it as the restriction on their freedom.

(iv) Costly Affair : Control is a costly affair as it involves a lot of expenditure, time and effort. A small firm cannot afford to install an expensive control system. 

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