Question

Explain the various steps in the process of controlling.

Answer 1

Controlling are the steps involved in the controlling process:

(i)Setting standards: Setting up of standards involves developing the benchmarks against which the actual performance is to be measured. The standards can be set both in qualitative and quantitative terms. Qualitative benchmarks can be in the forms of improving coordination in work,higher goodwill or increased motivation level of employees.For example,to improve the motivation level of employees,standards can be set in terms of the number of initiatives taken. Quantitative benchmarks can be in the form of sales targets, units to be produced or time to be spent on a particular action. For example,in a shirt factory,completing 10 pieces a day is a quantitative target. The standards that are set should be such that they facilitate easy comparison.

(ii) Comparing the performance: Performances, once measured, are compared with the set standards.Such a comparison helps in assessing the deviations in the work. Thereby, it guides the managers in taking the necessary steps to improve the performance, These comparisons are easier when they are in quantitative terms. For example, efficiency in work in terms of cost incurred can be measured against the standard cost. they are quantitative terms. For example,efficiency in work in terms of cost incurred can be measured against the standard cost.

(iv)Analysing Deviation: Every organisation faces deviations when comparing the actual performance with the pre-developed standards.Thus , it is important to find the deviations that are in the permissible range. It is said that deviations in key areas should be attended first. For analysing the deviations, the managers generally use Critical point control and management by exception.

Critical point control: An organisation cannot keep a check on all the activities of the management.Thus, this technique of controlling aims at focussing on only the key result areas (KRAs) that affect the entire organisation.For example,rise in input cost would be more important than rise in stationary cost.

Management by Exception: This technique of management is based on the belief that 'an attempt to control everything results in controlling nothing'. According to this, only the essential and significant deviations that are beyond the acceptable limits should be immediately brought to the notice of the management. On the other hand, a 2 percent rise in the cost can be ignored.

Once the deviations, are recognised, it is necessary to acknowledge their cause.There can be a number of elements causing deviation in work such as infeasible standards,deficiencies in process, under utilisation of resources and changes in business environment.Thus, it becomes important for the management to take into considerations the cause for the concerned deviations.

(v) Corrective measured: When deviations go beyond the admissible limits, there arises a need for the management to take corrective actions. This is the last step pf controlling which aims at correcting the deficiencies of the organisation so that the errors do not occur again. For example,if the production target was not met duly, appropriate corrective actions, such as training the workers or updating the machinery for working ,etc.can be taken.