Tuesday, June 24, 2014

What are the importance and limitations of controlling?

Controlling is an important function of management. Its importance becomes apparent when we find that it is needed in all the functions of management. Controlling checks mistakes and tells us how new challenges can be met or faced. The success of the organisation thus hinges on the effective controlling.
Controlling is the last function of the management process which is performed after planning, organising, staffing and directing. On the other hand, management control means the process to be adopted in order to complete the function of controlling. The following steps are included in it:
(i) Setting performance standards,
(ii) Measurement of actual performance,
(iii) Comparison of actual performance with standards,
(iv) Analysis deviations, and
(v) Taking corrective action.
The importance of controlling becomes clear from the following facts:

Judging accuracy of standards:Through strategic controlling we can easily judge whether the standard or target set are accurate or not. An accurate control system revises standards from time to time to match them with environmental changes.

 Facilitate coordination in action: Control helps to maintain equilibrium between means and ends. Controlling makes sure that proper direction is taken and that various factors are maintained properly. All the departments are controlled according to predetermined standards which are well coordinated with one another. Control provides unity of direction.

Controlling helps in improving the performance of the employees: Controlling insists on continuous check on the employees and control helps in creating an atmosphere of order and discipline. Under controlling function it is made sure that employees are aware of their duties and responsibilities very clearly.They must know clearly the standards against which their performance will be judged. These standards help the employees to work efficiently.

Control can be exercised on employees’ performance through following measures:

Self-appraisal report:
The employees are asked to prepare a report of their performance and to explain whether their performance is in accordance with plan or not. In this report employees specify their achievements.
Performance appraisal report by supervisors:
The superiors continuously monitor and observe the employees when they are performing the job and comparison between the standard and actual performance is done. On the basis of this observation the managers prepare performance appraisal report.
These reports become the base for giving promotions, increments, bonus etc. to the employees. To have good report the employees perform efficiently and effectively.
 Controlling helps in minimising the errors: Small errors or small mistakes may not seriously affect the organisation. But if these errors are repeated again and again it will become a serious matter and can bring disaster for the organisation.
An effective controlling system helps in minimising the errors by continuous monitoring and check. The managers try to detect the error on time and take remedial steps to minimise the effect of error.
Accomplishing Organisational Goals:The controlling process is implemented to take care of the plans. With the help of controlling, deviations are immediately detected and corrective action is taken. Therefore, the difference between the expected results and the actual results is reduced to the minimum. In this way, controlling is helpful in achieving the goals of the organisation.
Judging Accuracy of Standards: While performing the function of controlling, a manager compares the actual work performance with the standards. He tries to find out whether the laid down standards are not more or less than the general standards. In case of need, they are redefined.
Making Efficient Use of Resources: Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured that no employee deliberately delays his work performance. In the same way, wastage in all the physical resources is checked.
Improving Employee Motivation: Through the medium of controlling, an effort is made to motivate the employees. The implementation of controlling makes all the employees to work with complete dedication because they know that their work performance will be evaluated and if the progress report is satisfactory, they will have their identity established in the organisation.
Ensuring Order and Discipline:Controlling ensures order and discipline. With its implementation, all the undesirable activities like theft, corruption, delay in work and uncooperative attitude are checked.
Through the medium of controlling an effort is made to find out whether the production is being carried out in accordance with the orders received. If not, the causes of deviation are found out and corrective action is initiated and hence, coordination between both the departments is established.

Limitations of Controlling:

1. Difficulty in setting quantitative standards:

Control system loses its effectiveness when standard of performance cannot be defined in quantitative terms and it is very difficult to set quantitative standard for human behaviour, efficiency level, job satisfaction, employee’s morale, etc. In such cases judgment depends upon the discretion of manager.

2. No control on external factors: An enterprise cannot control the external factors such as government policy, technological changes, change in fashion, change in competitor’s policy, etc.

3. Resistance from employees: Employees often resist control and as a result effectiveness of control reduces. Employees feel control reduces or curtails their freedom. Employees may resist and go against the use of cameras, to observe them minutely.

4. Costly affair:Control is an expensive process it involves lot of time and effort as sufficient attention has to be paid to observe the performance of the employees. To install an expensive control system organisations have to spend large amount. Management must compare the benefits of controlling system with the cost involved in installing them. The benefits must be more than the cost involved then only controlling will be effective otherwise it will lead to inefficiency

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