CONTROLLING

Controlling in business management refers to the process of monitoring and evaluating organizational performance to ensure that it is in line with the predetermined objectives and standards. The controlling function involves comparing actual performance against planned performance, identifying deviations, and taking corrective actions to ensure that the organization is on track to achieve its goals.

Controlling involves establishing standards, measuring performance, comparing actual results with the standards, and taking corrective action when necessary. The goal of controlling is to ensure that organizational resources are being used efficiently and effectively, and that the organization is achieving its objectives in a timely manner.

Examples of controlling activities include monitoring financial performance, tracking inventory levels, measuring customer satisfaction, evaluating employee performance, and analyzing market trends. By implementing effective controlling practices, organizations can improve their decision-making processes, optimize their resources, and increase their chances of success in the marketplace.

Controlling is a crucial function of business management that involves monitoring, evaluating, and adjusting business activities to ensure that they are in line with the company’s objectives. There are several reasons why controlling is essential in business management, including:

1. Achieving organizational goals: Controlling helps ensure that the company is on track to achieve its goals by monitoring progress towards those goals and making necessary adjustments.
2. Improving performance: By monitoring performance and identifying areas where improvements can be made, controlling helps improve overall performance.
3. Cost control: Controlling helps identify unnecessary costs and eliminate them, leading to cost savings for the company.
4. Resource utilization: By controlling the use of resources, businesses can maximize their use and avoid waste, ensuring that resources are allocated efficiently.
5. Correcting deviations: Controlling helps identify deviations from the planned course of action and take corrective action to get back on track.
6. Ensuring compliance: Controlling helps ensure that the company complies with laws, regulations, and policies.
7. Enhancing decision-making: Controlling provides feedback that can be used to make informed decisions about future activities.

Steps in controlling

The steps involved in controlling in business management are as follows:

1. Establishing Standards: The first step in controlling is to establish standards or benchmarks against which performance can be measured. These standards should be specific, measurable, achievable, relevant, and time-bound (SMART).
2. Measuring Performance: The second step in controlling is to measure actual performance against the established standards. This is done through various tools like budgets, balance sheets, profit and loss statements, etc.
3. Comparing Performance with Standards: After measuring performance, the next step is to compare actual performance with the established standards. This helps in identifying any deviations or variances from the expected performance.
4. Analyzing Deviations: Once deviations are identified, the next step is to analyze the reasons for the deviations. This involves identifying the root cause of the problem and determining the appropriate corrective action.
5. Taking Corrective Action: Based on the analysis of deviations, corrective action needs to be taken to bring the actual performance back in line with the established standards. This can involve changing processes, training employees, or re-allocating resources.
6. Follow-up: The final step in controlling is to follow up to ensure that the corrective action has been successful in bringing the actual performance back in line with the established standards. This step involves monitoring performance on an ongoing basis to ensure that it remains within acceptable limits.

Tools for controlling

There are many tools available for controlling in business management. Here are some examples:

1. Budgeting: This involves setting financial targets and monitoring performance against them. It helps to identify areas of overspending or underspending and allows for adjustments to be made.
2. Key Performance Indicators (KPIs): These are specific metrics used to measure the success of an organization or a particular activity. KPIs help to monitor progress, identify trends, and measure performance against goals.
3. Dashboards: These are visual representations of data that provide an overview of the key performance indicators. Dashboards can help managers quickly identify trends and take corrective action if needed.
4. Performance Reviews: This involves regular reviews of employee performance to identify areas of strength and weakness. Performance reviews can help to motivate employees, set goals, and identify areas for improvement.
5. Project Management Software: This is software used to plan, organize, and manage projects. It can help to track progress, identify risks, and manage resources.
6. Customer Relationship Management (CRM) Software: This is software used to manage customer interactions and relationships. It can help to track customer behavior, identify trends, and improve customer satisfaction.
7. Quality Control: This involves ensuring that products or services meet certain quality standards. Quality control can help to identify defects, improve processes, and reduce waste.