Explain the various steps involved in the process of control.

Controlling is a systematic approach of managing and controlling the organisational actions. The following 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 in qualitative as well as quantitative terms. Qualitative benchmarks can be in the form of improving coordination in work, higher goodwill or increased motivation level of employees, etc. For example, to improve the motivation level among employees, standard can be set in terms of 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, etc. 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) Measuring Actual Performance: Once the standards are set, the next step is to measure the actual performance of the activities. This may be done through various techniques such as personal observation, checking the sample, performance reports, etc. The checking should be done in an exact and reliable manner so that correct measurement is taken for comparison. Measurement can be done after the completion of an activity as well as while it is in progress. For example, while assembling small parts of a bigger machine, the parts can be checked before assembling. This would ensure the continuous monitoring of the small parts as well as the final machine.

(iii) Comparing the Performances: Performances once measured are then 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 so as to improve the performances. 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.

(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 limit should be controlled. For example, if there is a 6 per cent rise in labour cost whereas the permissible limit is just 3 per cent, then, this should be immediately brought into 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 the cause for it. There can be a number of elements causing deviations in work such as infeasible standards, deficiencies in process, under utilisation of resources, changes in business environment, etc. Thus, it becomes important for the management to take into regard the causes for the concerned deviations.

(v) Corrective Measures: When deviations go beyond the admissible limits, there arises a need for the management to take corrective actions. This is the last step of 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.

Controlling is a systematic process involving following steps 

(i) Setting Performance Standards: The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Standards can be set in both quantitative as well as qualitative terms. Some of the qualitative standards are—cost to be incurred, product units to be produced, time to be spent in performing a task etc. Improving goodwill and motivation level of employees are examples of qualitative standards. 

(ii) Measurement of Actual Performance: Once performance standards are set, the next step is measurement of actual performance. Performance should be measured in an objective and reliable manner. Some of the techniques used for measuring the performance are personal observation, sample checking performance reports etc. 

(iii) Comparing Actual Performance with Standards: This step involves comparison of actual performance with the standards. Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms. For instance, performance of a worker in terms of units produced in a week can be easily measured against the standard output for the week. 

(iv) Analysing Deviations: Some deviations in performance can be expected in all activities. It is therefore, important to determine the acceptable range of deviations. Also, deviations in key areas of business need to be attended more urgently as compared to deviations in certain insignificant areas. Critical point control and management by exception should be used by a manager in this regard. 

(v) Taking Corrective Action: The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within acceptable limits. However, when the deviations go beyond the acceptable range, especially in the important areas, it demands immediate managerial attention so that deviations do not occur again and standards are accomplished. Incase the deviations cannot be corrected through managerial action, the standards may have to be revised.

Following steps are involved in controlling process: 

Step 1 : Setting Performance Standards: 

i. The first step in the controlling process is setting up of performance standards. 

ii. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organization strives to work. 

iii. Standards can be set in both quantitative as well as qualitative terms. 

Step 2: Measurement of Actual Performance: 

i. Once performance standards are set, the next step is measurement of actual performance. 

ii. There are several techniques for measurement of performance. These include personal observation, sample checking, performance reports, etc. 

Step 3: Comparing Actual Performance with Standards: 

i. This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired results. 

ii. Comparison becomes easier when standards are set in quantitative terms. iii. For instance, performance of a worker in terms of units produced in a week can be easily measured against the standard output for the week. 

Step 4: Analysing Deviations: 

i. Some deviation in performance can be expected in all activities. It is, therefore, important to determine the acceptable range of deviations. 

ii. Also, deviations in key areas of business need to be attended more urgently as compared to deviations in certain insignificant areas. Critical point control and management by exception should be used by a manger in this regard. 

a. Critical Point Control: 

• It is neither economical nor easy to keep a check on each and every activity in an organization. 
• Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an organization. These KRAs are set as the critical points. If anything goes wrong at the critical points, the entire organization suffers. 

b. Management by Exception: 

• Management by exception, which is often referred to as control by exception, is an important principal of management control based on the belief that an attempt to control everything results in controlling nothing. 
• Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management. 

Step 5: Taking Corrective Action: 

i. The final step in the controlling process is taking corrective action. No corrective action is required when the deviation are within acceptable limits. 

ii. However, when the deviations go beyond the acceptable range, especially in the important areas, it demands immediate managerial attention so that deviations do not occur again and standards are accomplished. 

iii. Corrective action might involve training of employees if the production target could not be met.

Controlling is the continuous process of evaluating the actual performance against the standard performance of an individual, group or department. Controlling is a dynamic process and action or people-oriented. 

Controlling process involves the following:

1. Setting performance standards: Standard refers to the target upon which the actual performance is measured. Different types of standards are used for measuring the performance of different individuals. Standards may be of two types, qualitative standard and quantitative standard. Performance standards are mainly derived from the objectives, goals, and expectations of the organization. 

The standards for control should satisfy the following requirement:

• It should be simple and easily understandable 
• It should be flexible, not rigid 
• It should be in accordance with the people responsible to achieve them, 
• It should be consistent with the overall objective of the firm.

2. Measurement of Actual performance: Once these standards are fixed for desired performance, the next step is to measure the actual performance. Measurement of performance should be clear, simple, rational, relevant, and understandable without complaints and misinterpretation.

3. Comparing the actual performance with standards: It involves two steps.

• Finding out the extent of deviations 
• Identifying the causes of such deviations

While comparing the actual performance against the standards, the deviations are revealed. Once the deviations are noticed and causes for the same are determined, corrective measures are adopted.

4. Analyzing the deviations: Deviations mean variations from the standards. Every deviation is analyzed to find out why it has occurred and who is responsible for the same. 

Deviations may be Negative, Positive or Zero,

• Negative Deviations: If actual performance is less than the standard, it leads to negative deviations. 
• Zero Deviations: If actual performance is equal to the standard that leads to Zero deviations. 
• Positive Deviations: If actual performance is more than the standard, it leads to Positive deviations.

5. Taking corrective actions: After finding what has gone wrong, where and why, management will initiate corrective action. 

The remedial actions may involve:

• Review and revision of goals or standards, 
• Change in the assignment of tasks 
• Provisions for additional resources or new facilities 
• mprovement in the selection and training of workers or reform in the technique of direction.