Controlling: It’s Definition, Importance and Limitations | Management Functions

Read this article to learn about the meaning, definition, importance and limitations of Controlling!

Controlling is an important function of management which all the managers are required to perform. In order to contribute towards achievement of organisational objectives, a manager is required to exercise effective control over the activities of his subordinates.

Thus, controlling can be defined as a managerial function to ensure that activities in an organisation are performed according to the plans. Controlling also ensures efficient and effective use of organisational resources for achieving the goals. Hence, it is a goal oriented function.

Often, controlling and management control are considered same. However, there is a vast difference between the two. Controlling is one of the managerial functions while management control can be defined as a process which managers follow to perform the controlling function.

Management control refers to setting of predetermined standards, comparing actual performance with these standards and, if required, taking corrective actions to ensure the achievement of organisational goals.

Definitions of Controlling:

“Managerial control implies the measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans”. Koontz And O’Donnell

“Control is the process of bringing about conformity of performance with planned action.” Dale Henning

Controlling function is performed in all types of organizations whether commercial or non commercial and at all levels i.e. top, middle and supervisory levels of management. Thus, it is a pervasive function. Controlling should not be considered as the last function of the management.

The controlling function compares the actual performance with predetermined standards, finds out deviation and attempts to take corrective measures. Eventually, this process helps in formulation of future plans too. Thus, controlling function helps in bringing the management cycle back to planning.

Importance of Controlling:

The significance of the controlling function in an organisation is as follows:

1. Accomplishing Organisational Goals:

Controlling helps in comparing the actual performance with the predetermined standards, finding out deviation and taking corrective measures to ensure that the activities are performed according to plans. Thus, it helps in achieving organisational goals.

2. Judging Accuracy of Standards:

An efficient control system helps in judging the accuracy of standards. It further helps in reviewing & revising the standards according to the changes in the organisation and the environment.

3. Making Efficient Use of Resources:

Controlling checks the working of employees at each and every stage of operations. Hence, it ensures effective and efficient use of all resources in an organisation with minimum wastage or spoilage.

4. Improving Employee Motivation:

Employees know the standards against which their performance will be judged.

Systematic evaluation of performance and consequent rewards in the form of increment, bonus, promotion etc. motivate the employees to put in their best efforts.

5. Ensuring Order and Discipline:

Controlling ensures a close check on the activities of the employees. Hence, it helps in reducing the dishonest behaviour of the employees and in creating order and discipline in an organization.

6. Facilitating Coordination in Action:

Controlling helps in providing a common direction to the all the activities of different departments and efforts of individuals for attaining the organizational objectives.

Limitations of Controlling:

The defects or limitations of controlling are as following:

1. Difficulty in Setting Quantitative Standards:

It becomes very difficult to compare the actual performance with the predetermined standards, if these standards are not expressed in quantitative terms. This is especially so in areas of job satisfaction, human behaviour and employee morale.

2. No Control on External Factors:

An organization fails to have control on external factors like technological changes, competition, government policies, changes in taste of consumers etc.

3. Resistance from Employees:

Often employees resist the control systems since they consider them as curbs on their freedom. For example, surveillance through closed circuit television (CCTV).

4. Costly Affair:

Controlling involves a lot of expenditure, time and effort, thus it is a costly affair. Managers are required to ensure that the cost involved in installing and operating a control system should not be more than the benefits expected from it.