Controlling

Introduction

Controlling is a key management role. It is the process of measuring current performance and directing it toward preset goals. Control was exercised only when something went wrong, and the goals of control were to chastise the individual responsible for these events and take action against him. The modern notion of control envisions a system that not only offers a historical record of what has happened to the firm but also pinpoints why it has happened and provides data that allows the management to alter course if he discovers he is on the wrong track. As a result, there is no goal of punishing the individual for wrongdoing; rather, it is to identify differences between actual and standard performance and to take action to avoid such variances in the future.

Control is frequently misunderstood as a lack of freedom. The polar opposite of control is chaos or anarchy, not freedom. Control is completely compatible with freedom. They are, in reality, interdependent. Freedom cannot be preserved for long without control, and control becomes ineffectual in the absence of freedom. The concept of control incorporates both freedom and accountability.

Concept of Control

Control is how managers ensure that actual activities conform to planned activities. According to Breach, “Control is checking current performance against predetermined standards contained in the plans to ensure adequate progress and satisfactory performance.”

According to George R. Terry, “Controlling is determining what is being accomplished, i.e., evaluating the performance and, if necessary, applying corrective measures so that the performance takes place according to plans.”

According to Billy E. Goetz, “Management control seeks to compel events to conform to plans”.

According to Robert N. Anthony, “Management control is the process by which managers assure that resources are obtained and used effectively and efficiently.”

In the words of Koontz and O’Donnell, “Managerial control implies measuring accomplishment against the standard and correcting deviations to assure attainment of objectives according to plans.”

In the words of Haynes and Massie, “Fundamentally, control is any process that guides activity towards some predetermined goal. The essence of the concept is in determining whether the activity is achieving the desired results”.

In the words of J. L. Massie, “Control is the process that measures current performance and guides it towards some predetermined goals.”

In the words of Henry Fayol, “Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued, and the principles established. Its object is to discover weaknesses and errors to rectify them and prevent recurrence. It operates on everything, i.e., things, people and actions”.

From the above definitions, it is clear that the managerial function of control consists of comparing the actual performance with the planned performance to discover whether all is going well according to plans and, if not, why. Remedial action arising from a study of deviations from the actual performance from the standard or planned performance will correct the plans and make suitable changes. Controlling is the nature of follow-up to the other three fundamental management functions. There can be no control without previous planning, organising, and directing. Controlling cannot take place in a vacuum.

Characteristics of Control

Certain characteristics distinguish managerial control. They are as follows:

1. Every manager performs control functions. Managers at all levels must perform this function to contribute to the attainment of organizational goals.
2. Control leads to an evaluation of previous operations. The control method reveals past deviations and corrective steps can be taken if needed.
3. Control is tied to the future because the past cannot be controlled. It should predict potential deviations and plan remedial actions to prevent such deviations in the future. It is usually preventive since the presence of a control system reduces waste, losses, and deviations from standards.
4. Control involves defining standards, measuring actual performance, comparing actual performance to predefined criteria, and highlighting differences between actual and standard performance.
5. Control entails taking corrective actions. The goal of screening for variations or deviations is to correct them and prevent them from recurring. Only action, when deviations arise, returns performance to specified criteria.
6. Control can only be exercised about and/or based on plans. “Whereas planning determines the course, control monitors deviations from the course or to a properly adjusted one,” says Mary Cushing Niles.
7. For some, control is the polar opposite of freedom. This is not correct. Control is based on data and statistics. Its goal is to produce and maintain acceptable productivity from an enterprise’s resources. As a result, control focuses on outcomes rather than individuals. It is used to fix a situation, not to chastise people.
8. Information or feedback is the guide to control; feedback assists management in determining how far the activities are moving according to plans and standards and where corrective action is required.
9. Control entails continually examining performance standards, which results in corrective action. This action may lead to changes in the performance of other management tasks, making control a dynamic and adaptable process.
10. Control is an ongoing effort. It entails continuously examining the validity of standards, rules, procedures, and other related documents.

Relationship between Planning and Control

It should be obvious by now that project management has two critical parts: planning and control. These are critical functions for any effective manager—without them, projects are unlikely to be successful, completed on time, or cost less than they should! A successful manager must constantly ensure that projects are founded on strong ideas and implemented with care.

‘Planning’ is the process of identifying realistic goals and selecting effective methods to achieve them. Goals must be comprehensible, attainable, and measurable! A goal that is not clear cannot be appraised and so cannot be managed. If a goal is impractical, any approach will be unrealistic as well and thus unlikely to succeed. A successful project manager must guarantee the project’s plan is well-defined and feasible.

‘Control’ refers to the method through which the manager ensures that all actions are consistent with the plan and thus aim at attaining the specified goals. The systematic effort of comparing performance to plans is called “control.” ” Planning is required at the start of management, whereas control is required at the end. Control, if planning is looking ahead, is looking back.”

Control and planning are so inextricably linked that they cannot be separated. All planning is useless without control since control consists of the procedures necessary to guarantee that the organization’s performance complies to the plans.

In other words, control concerns actual performance regarding predetermined criteria and correcting deviations to achieve goal attainment. Planning is required at the start of management, whereas control is required at the end.

If planning looks ahead, control looks back. In reality, control determines whether or not sufficient progress is being achieved toward the objectives and goals established by management during planning.

It is frequently stated that planning is the foundation, action is the essence, delegation is the key, information is the guide, and control is the lifeblood of every commercial enterprise’s success. Organizational objectives cannot be met without planning, and planning alone will not result in success. A business may face many administrative issues if extra effort is not put into planning and control. These challenges may have a long-term negative impact on the firm.

Effective control through influential superiors can only ensure success. The control system must be suited to the enterprise’s needs and circumstances.

Control is a key management role that ensures work is completed as planned. The goal of control is to ensure that everything in an organisation happens according to predetermined plans. Control also assures no indiscipline or ineptitude in the organisation and that employees do not exert undue pressure on management.

Some people oppose control because they believe it is always used against employees. They favour automated control over forceful control. However, a balanced approach holds that management and personnel should be subject to some form of control. Any form of corporate organization’s core policies should include control.

Steps in the Control Process

A control process consists of three essential steps:

1. Establishing standards
2. Measuring and comparing actual results against standards
3. Taking corrective action.

Establishing standards

The first step in the control process is to set standards against which the results can be measured. The standards managers want to achieve in each important area should be defined as quantitatively as feasible. Avoid using broad phrases to communicate standards. Standards must be adaptable to adapt to changing conditions. The standard should emphasise achieving results over adherence to rules and processes. If it does not, people will begin to place greater emphasis on rules and processes than on final results.

The following considerations must be made when establishing standards:

1. The criteria must be clear and easy to understand. If the criteria are clear and understood by the individuals involved, they can assess their performance.
2. Standards must be precise, accurate, acceptable, and practicable.
3. Standards serve as the criteria or standards against which performance in the control process is judged. It should neither be too high nor too low. They should be attainable and reasonable.
4. Standards should be adaptable; that is, they should be able to vary depending on the circumstances.

Measuring and Comparing Actual Results against Standards

The second step in the control process is to measure and compare performance to specified standards. Personal observation, reports, charts, and remarks can all be used to assess performance. If the control system is well-organized, these can be quickly compared to the standard figure. This will reveal differences.

After measuring actual performance, the actual performance should be compared to the defined standards as soon as possible. If the control system is adequately organised, a quick comparison of actual performance with standard performance is possible. When comparing actual performance to defined criteria, the management must determine the level of deviation and the causes of variation. This is crucial because some deviations may be insignificant, whilst others may be critical and require quick remedial action by the manager.

Taking Corrective Action

After comparing actual performance to the established criteria and identifying discrepancies, the manager should proceed to fix these deviations. Corrective action should be taken as soon as possible to restore the usual position. The manager must also establish the root reason of the divergence.

Corrective action can be taken in the following ways:

1. The management should attempt to alter ambient conditions and external situations to support goal achievement.
2. He should go through the directions he gave earlier with his subordinates to give clear, complete, and reasonable instructions in the future.
3. Numerous external forces cannot be controlled by management. They must be regarded as facts of the situation, and executives must adjust their strategies to account for these shifting dynamics.

Types of Control

Most control mechanisms can be classified into one of two categories:

Past-oriented Controls

These are also known as post-action controls since they measure results after the procedure. They investigate what occurred at a specific period in the past. These controls can plan future behaviour based on past mistakes or triumphs.

Future-oriented Controls

These are also known as steering controls or feed-forward controls, and they are intended to measure results during the process so that action can be taken before the project or period is completed. They are mostly used to direct attention rather than analyse, for example, cash flow analysis, funds flow analysis, network design, etc.

Control Techniques

Over the years, a range of tools and strategies have been utilised to assist managers in controlling the activities of their organisations. Control can exist from various perspectives. Time controls are concerned with deadlines and time limitations, while material controls are concerned with inventory control and so on. Different control techniques necessitate the use of different control aids, such as:

1. Budgeting: A budget is a statement of expected results over a specific period expressed in financial and non-financial terms. Budgets cover a particular period, which is usually a year. Actual performance is compared directly to budget targets at certain intervals during that period, and variations are rapidly detected and addressed. Budgets include, for example, sales budgets, production budgets, capital expenditure budgets, cash budgets, master budgets, and so on.
2. Standard Costing: The cost of production influences an enterprise’s profit. The system compares the actuals to the standards; the difference is called variance. The following are the procedures involved in standard costing:
   1. Establish cost standards for various cost components, such as raw materials, labour, etc.
   2. Actual performance evaluation.
   3. A comparison of the actual and standard costs.
   4. Calculating the difference between the actual and standard costs.
   5. Identifies the sources of variation.
   6. Taking the appropriate steps to prevent future occurrences of variation.

3. Responsibility accounting: Responsibility accounting is a system in which each department head is held accountable for his department’s performance.
4. Reports: A significant aspect of control is preparing reports that offer information to management for the purposes of control and planning.
5. Standing Orders, Rules, and Limitations: Management also employs control measures such as standing orders, rules, and limitations. They are issued by management and must be followed by subordinates.
6. Personal Observation: A manager can effectively control subordinates by monitoring them at work.

Critical Path Method (CPM)

A critical path is the sequence of dependent tasks (each depending on the one before it) that takes the longest to accomplish. A CPM chart can show many equally essential pathways. The jobs on the critical route should be documented and given extra attention. One method is to draw critical path tasks with two lines rather than one. The project manager and the individuals assigned should give extra attention to essential tasks on the path. The critical route for any particular technique may alter as the project develops; this can occur when tasks are done behind or ahead of schedule, forcing other work still on schedule to fall on the new critical path.

Gantt Chart

Henry Laurence Gantt was a mechanical engineer, management consultant, and industrial advisor who lived from 1861 to 1919. In the second decade of the twentieth century, he invented Gantt charts. Gantt charts were used as a visual tool to indicate project progress, both scheduled and actual. In the 1920s, it was a world-changing innovation. On huge construction projects, Gantt charts were used. A Gantt chart is a matrix that lists all tasks to be completed on the vertical axis. Each row has a single task identification, commonly a number and a name. The horizontal axis is headed by columns that indicate the estimated task length, the skill level required to complete the assignment, and the name of the person allocated to the task, followed by one column for each period of the project’s lifespan. Each phase can be stated in hours, days, weeks, months, and other time units. The Gantt chart’s graphics consist of a horizontal bar for each task connecting the period start and ending columns. Typically, markers denote the estimated and actual start and end times. Each bar is on a different line, as is the name of each individual allocated to the work. When this style of project plan is employed, a blank row is often left between tasks. When the project is in process, this row shows progress with a second bar that begins in the period column when the task is started and continues until the work is done. A task-by-task comparison of estimated and actual start and end times should illustrate project status.

Programme Evaluation and Review Technique

The Program Evaluation and Review Technique (PERT) is a Critical Path Analysis version that is significantly more sceptical of time estimates produced for each project stage. Critical Path Method (CPM) charts are similar to PERT charts, sometimes called PERT/CPM charts. Estimate the shortest time each task will take, the most likely time, and the most significant time if the activity goes longer than predicted. PERT charts display task, duration, and dependence data. Each graph begins with an initiation node, from which the first task or tasks emerge. If several jobs start simultaneously, they start from the same node or branch or fork out from the same beginning point. Each task is represented by a line that includes its name or other identifier, duration, the number of employees allocated to it, and, in some situations, the personnel assigned initials. The task line is terminated at the opposite end by another node, which identifies the start of another job or the start of any slack time, that is, the waiting time between tasks. In this way, each task is linked to its successor tasks, establishing a network of nodes and connecting lines. The chart is complete when all last tasks are completed at the completion node. When there is slack time between the completion of one task and the beginning of another, the standard way is to draw a broken or dotted line between the completion of the first task and the start of the following dependent task.