Control is any process that guides activity towards some predetermined goals. Process of Controlling along with Benefits and Exception of Management. Thus control can apply in any field such as price control, distribution control, pollution control, etc. However, control as an element of management process can define as the process of analyzing whether actions are taking as plan and taking corrective actions to make these to conform to planning.
Here are explain; What is the Process of Controlling?
Controlling as a management function involves the following steps;
Establishment of standards:
Standards are the plans or the targets which have to achieve in the course of business function. They can also call the criterions for judging the performance. Standards generally are classifying into two:
- Measurable or tangible: Those standards which can measure and express are called as measurable standards. They can be in the form of cost, output, expenditure, time, profit, etc.
- Non-measurable or intangible: There are standards which cannot measure monetarily. For example; performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards.
Controlling becomes easy through an establishment of these standards because controlling is exercised based on these standards; you will be reading Process of Controlling.
Measurement of performance:
The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as they can express in units, cost, money terms, etc. Quantitative measurement becomes difficult when the performance of the manager has to measure. The performance of a manager cannot measure in quantities.
It can measure only by;
- An attitude of the workers,
- Their morale to work,
- The development in the attitudes regarding the physical environment, and
- Their communication with the superiors.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports; keep reading Process of Controlling.
Comparison of actual and standard performance:
Comparison of actual performance with the planned targets is very important. The deviation can define as the gap between actual performance and the planned targets. The manager has to find out two things here- the extent of deviation and cause of the deviation. An extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance.
The managers have to exercise control by exception. He has to find out those deviations which are critical and important for the business. Minor deviations have to ignore. Major deviations like the replacement of machinery, an appointment of workers, quality of raw material, the rate of profits, etc. should look upon consciously.
Therefore it is said,
“If a manager controls everything, he ends up controlling nothing.”
For example, if stationery charges increase by a minor 5 to 10%, it can call as a minor deviation. On the other hand, if monthly production decreases continuously, it’s called the major deviation.
Once the deviation is identifying, a manager has to think about the various cause which has led to a deviation.
The causes can be;
- Erroneous planning,
- Co-ordination loosens,
- Implementation of plans is defective, and
- Supervision and communication are ineffective, etc.
Taking remedial actions:
Once the causes and extent of deviation are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives here;
- Taking corrective measures for deviations which have occurred; and
- After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow-up is an important step because it is only through taking corrective measures, a manager can exercise control.
An exception of Management and Controlling:
One of the most important ways of tailoring controls for efficiency and effectiveness is to make sure that they are designed to point out exception. In other words, by concentrating on exceptions from planned performance, controls based on the time-honored exception principles allow managers to detect those places: where their attention’s require and should give.
This implies the use of management by exception particularly in controlling aspect. Management by exception is a system of identification and communication that signals to the manager when his attention’s need. From this point of view, management by exception can use in other management processes also though its primary focus revolves around controlling.
Management by exception has six basic ingredients:
- Measurement assign values to past and present performances. This is necessary because, without a measurement of some kind, it would be impossible to identify an exception.
- Projection analyses those measurements that are meaningful to organizational, objectives and extends them into future expectations.
- Selection involves the criteria which management will use to follow progress towards organizational objectives.
- Observation stage of management by exception involves the measurement of current performance so that managers are aware of the current state of affairs in the organization.
- Comparison stage makes a comparison of actual and planned performance and identifies the exceptions that require attention and reports the variances to management.
- Decision-making prescribes the action that must take in order to bring performance back into control or to adjust expectations to reflect changing conditions or to exploit the opportunity.
Thus it can observe that management by exception is inseparable from other management essentials in many ways. However, the major difference lies in the fact that the superior’s attention’s draw only in the case of exceptional differences between planned performance and actual performance. In other cases, the subordinate manager takes decisions. However, what is-exceptional requires the completion of the whole process.
What is Benefits or Management by exception?
There are various areas where percepts of management by exception are using such as statistical control of product quality, economic order quantities and order points for control of inventories and supplies, break-even points for determining operating, levels, trends in ratios of indirect to direct labour used in apportioning overhead, attitude surveys for gauging employee morale, etc.
The use of management by exception is prevalent because of the following factors:
- Management by exception saves executives’ time because they apply themselves to fewer important problems. Other details of the problems are left to subordinates.
- It concentrates executives’ efforts on major problems. Instead of spreading managerial attention across all sorts of problems, it is placing selectively where and when they need. Thus it ensures better utilization’ of managerial talents.
- It facilitates better delegation of authority, increases the span of management and consequently provides better opportunities for self-motivated personnel in the organization. It lessens the frequency of decisions at the higher levels of management, which can concentrate on strategic management rather than engaging themselves in operational management.
- Management by exception makes better use of knowledge of trends, history; and available business data. It forces managers to review past history and to study related business data because these are the foundations upon which standards are deriving and from which exception’s note.
- It identifies crises and critical problems and thus avoids uninformed, impulsive pushing of the panic button. They help in the identification of crises because the moment any exceptional deviation occurs, the attention of higher-level manager’s draw. In this way, it also alerts management to opportunities as well as difficulties.
- Management by exception provides qualitative and quantitative yardsticks for judging situations and people. Thus it helps in performance appraisal by providing more objective criteria and provides better motivation to people in the organization.