Why controlling is important

The controlling process involves establishing a set of standards to measure organizational performance, measure actual performance, and compare it with the standards.

The traditional process for management control consists of the following steps:. Step Actual performance is compared with planned performance,. Step The difference between the two is measured,. Step Causes contributing to the difference are identified, and.

Step Corrective action is taken to eliminate or minimize the difference. The reasons why controlling is important are elaborated below. The importance of controlling in business management can only be understood with some key aspects that are obtained by controlling in business management.

Attaining Goal: Accomplishing organizational goals is more comfortable with the step of controlling. Controlling in business management guides the whole work process and leads to the achievement of organizational goals. All the errors and lacking within the organization can be defined with controlling, and goals can be attained more quickly.

All the mistakes can be easily identified and resolved in this process. Managing business management is extremely helpful for achieving organizational goals in a short amount of time. The judgment of the Standards: Comparing the actual work and performance of the workforce can easily be judged with the step of controlling.

Controlling is the very last step of the management process, yet the most important one. The judgment of the standards is more natural with managing and obtaining maximum success is possible. Controlling opens the gate for new opportunities, and the proper use of the process can help with the judging accuracy of the standards of the workforce.

Controlling enhances the whole workforce and helps in the judgment process. Enhanced Efficiency: Controlling defines the mistakes and allows resolving them and improving for the next time. Controlling is thus a very important and integral part of everyday management. It is a process that helps in ensuring business success and stability and cannot be separated from the other functions. This is because the effectiveness of planning and all other functions are gauged and understood through the process of controlling.

Controlling like most other processes are composed of a number of steps followed in sequential order. There are 4 steps that are involved in the process of controlling and they are Standards are benchmarks that we can compare a particular output to. It serves the purpose of being a threshold that has to be achieved or surpassed. The creation and the prior establishment of standards is the first step involved in the process of controlling.

The standards are established in accordance with the plan that is developed for the entire organization. So if the plan is to construct a 5 star hotel in 5 years then a standard that needs to be achieved in the first year could be the creation of the building plan and the accumulation of finance from multiple sources for the commencement of the construction.

Thus this acts as a sub-goal that needs to achieved or surpassed. Standards may be classified into the following Standards that be measured and subsequently expressed are called measurable standards. They could be in the form of time, cost, output, expenditure, profit, appreciation, growth, market share, user base, etc. Their standards cannot be measured monetarily. For instance- the deviation of workers attitudes, the performance of a manager, etc.

These are called intangible standards. Controlling is facilitated through the formation of such standards because controlling is practiced only on the basis of such standards. The second main step in controlling is the measurement of performance. Gauging deviations from the planned measures is easier for measurable standards of performance as they can be quantified in units, cost, money terms, etc.

However, non-measurable or intangible standards of performance are difficult to gauge. Qualitative assessment becomes a challenge, especially while the performance of manager needs to be measured.

After the actual output is determined it is compared and contrasted to the standards that we have established. This step is central to the entire process of controlling as the deviations from the plan are identified during this step. Deviations can be referred to all those factors present in the actual output that prove distinct and different from the established standard.

Depending upon the nature of the distinction, deviations are classified either as Positive or Negative Deviations. In the above example, if the management was able to get the plans ready, get the finances ready and also get the due permission from the authorities and materials were organized.

Positive deviations thus as will be understood from the illustration is when the conditions of the standard are surpassed and the output goes ahead to materialize more factors relevant to the central plan, in this case getting permits and materials.

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. 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.

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.

Controlling ensures order and discipline. With its implementation, all the undesirable activities like theft, corruption, delay in work and uncooperative attitude are checked.