Financial and Strategic Management

What do you understand by Controlling and what are its features?

Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance discovers the causes of such deviations and helps in taking corrective actions.

According to Brech “Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensuring adequate progress and also recording such experience as is gained as a contribution to possible future needs.”

According to Donnell “Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on the right course.”

As Theo Haimann has put it, 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“.

Features of Controlling Function

Following are the characteristics of controlling the function of management-

• Controlling is an end function- A function that comes once the performances are made in conformities with plans.
• Controlling is a pervasive function- which means it is performed by managers at all levels and in all types of concerns.
• Controlling is forward-looking- because effective control is not possible without the past being controlled. Controlling always looks to the future so that follow-up can be made whenever required.
• Controlling is a dynamic process- since controlling requires taking reviewal methods, changes have to be made wherever possible.
• Controlling is related to planning- Planning and Controlling are two inseparable functions of management. Without planning, controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling succeeds planning.

Importance of Controlling

Controlling’s most important function is the risk-reduction ability. Since you are essentially monitoring the performance of the team and comparing it against the objectives you’ve set, you can react to problems more easily. Instead of realizing at the end of the month that you’ve missed your sales target by a huge margin, you can keep an eye on the situation during the process.

If you notice the marketing campaign, for example, is not producing any new customers or leading to increased sales, you can re-tweak it to better attract customers. With the re-tweak, you might be able to change the campaign’s attractiveness and recover the situation. This could end up guaranteeing you meet the sales target at the end of the month.

Even if you miss the target, you might not miss it by as much and you’ve at least had the chance of correcting the situation. With controlling, you are reducing the risk of failure and the impact of failing to meet your objectives. As mentioned, even if you happen to fail, you’re prepared for it and you can start analyzing the reasons behind it immediately.

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Shreya Kushwaha

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