• Control is the process of comparing actual performance with established standards, for the purpose of

taking actions to correct deviations.

• The basic purpose of a well designed control system is to ensure that results are achieved according to
plan.
• It is making something happen the way it was planned to happen. It involves keeping the organizational
activities and functions on the right track and aligned with plans and goals.

• It is said that like a ship’s rudder, controlling keeps the organization moving in the proper direction.
• Features of Control
• Positive force – The primary objective of control is to find where failures are occurring, who is
responsible for them and what should be done about them. It is, thus, a positive force, aimed at
securing performance.
• Continuous – Just as the navigator continually takes readings to ascertain where he is, relative
to a planned course, so should the business manager continually take readings to assure
himself that his enterprise or department is on course.
• Forward looking – Control involves a post mortem examination of past events with a view to
improve performance in future. Control does not wait till the train gets derailed, it seeks to
prevent the train going off the track.
▫ Universal – Control is a primary function of every manager. It has to be undertaken at every
level.

▫ Dynamic – Control is a dynamic process in the sense that it is amenable to change, and hence,
highly flexible.
▫ Goal oriented – Control guides activities (along desired lines) towards predetermined goals.
The primary focus of control is on achieving results, checking deviations, if any, and initiating
timely remedial steps.
▫ Planning based – Control is based on planning. A system of control presupposes the existence
of certain standards, which are determined in the process of planning.

▫ Planning is useful only when there is effective control. Planning without control is meaningless.
• Controlling, however, has its own limitations. An enterprise has very little control over external
influences.

• Employees, too, do not like to be watched from close quarters and offer resistance when the control
system is too tight and rigid.
• Further, it’s easy to control certain functions but not so easy to control other functions. Many areas defy
measurement in quantitative terms.

The Control Process

• The Control Process

▫ Step 1: Establishment of standards
 The first step in the control process is establishing standards. Standards are the targets
against which subsequent performance will be compared
 They are, by definition, simply criteria of performance. They serve as the benchmarks
because they specify acceptable levels of performance.

 Standards could be either quantitative or qualitative.

 Quantitative standards are generally expressed in physical or monetary terms.

 Such standards are typically set up in respect of production, finance, sales etc.
Quantitative standards could be based on time, cost, productivity, or revenue.

 Qualitative standards, on the other hand, are based on the level of perfection desired
in respect of certain intangible items such as goodwill, employee morale, industrial
relations, customer satisfaction etc.

 Such standards are difficult to be measured directly and precisely.

 Step 2: Measurement of actual performance
 The second step in control process is the measurement of actual performance. Here, the
actual performance of employee is measured against the standard fixed for his job.
▫ Where standards are expressed in numerical terms, measurement does not create problems.
E.g.; in production, finance or sales.
 ▫ However, where standards are expressed in qualitative terms, measurement becomes difficult.
E.g.; in HR, Customer Care etc.
▫ Generally speaking, the measurement of performance is more difficult at the higher levels of
management.

▫ Measurement can be done directly through personal observation or indirectly through regular
reports (oral or written).
▫ Step 3: Comparison of actual performance with standard
 In the third step of controlling process, actual performance is compared with the
standard.

 It helps to determine the degree of variation between actual performance and the
standard.
 Some variation in the performance can be expected in all the activities. It is important at
this stage to determine the acceptable range of variation.

 Deviations in excess of this range become significant and receive manager’s attention.
 Step 4: Taking corrective action
 The last and final step in the control process is taking corrective action, when required.
Corrective steps are initiated by managers with a view to rectify the defects in actual
performance.
 Corrective action may include a whole range of activities, such as, changing the
strategy, methodology, rules, compensation practices, redesign of jobs, replacement of
personnel, reestablishment of budgets and even redefining the standard itself.
Types of Control

• Types of Control
▫ Feedback Control – It is the process of gathering information about a completed activity,
evaluating that information and taking steps to improve similar activities in the future.

▫ It is a post mortem examination of events, the purpose of which is to improve performance in

future.
▫ Concurrent Control – Concurrent control consists of monitoring ongoing activities to ensure
they are consistent with standards. It is also known as real time control.

▫ The navigator of an aircraft who adjusts the aircraft’s movements is an example of concurrent
control.

▫ Feed forward Control – Here, the control system anticipates problems that the management
encounters in future. Cash budget is an example of this type where the finance manager is in a
position to estimate the next year’s flow of cash.
▫ It is, thus, a more aggressive, proactive approach to control, allowing corrective action to be
taken ahead of the occurrence of the problem.

▫ This type of control is also known as predictive control since it attempts to anticipate problems
in advance of their occurrence.

• In a large, multi-product, multi-plant and multi-location organization, it is not possible to check

everything and initiate timely, remedial steps wherever things go off the track.

• Managers, therefore, focus attention on key or critical areas which have a significant bearing on the
performance of the various departments in an organization.

• Exercising control in the above said manner is known as critical or strategic point control.

• It puts emphasis on measuring the performance and checking deviations in respect of key result areas
which are highly critical to the success of a firm.
• Another, modern way to exercise control is by controlling only those things which are unusual or
exceptional.

• This type of control is known as management by exception and it tries to focus attention on
exceptionally serious deviations from the plans and standards.
• In management by exception, the managers intervene only when asked by the subordinates for their
intervention or when they find a serious deviation from the plans and standards.

• The intensity and type of control depends on a variety of factors, such as, the nature of the task, the
competence of the personnel, the level of management, and the management philosophy etc.