1. Establishing Standards
- Definition: Standards are set targets or criteria against which performance is measured.
- Types: Measurable standards (quantifiable) and non-measurable standards (intangible aspects like attitudes).
- Purpose: Provides a benchmark for evaluating performance and guiding control efforts.
2. Measurement of Actual Performance
- Process: Involves assessing actual performance against established standards.
- Challenges: Quantitative measures (like cost, output) are straightforward; qualitative measures (like managerial performance) rely on subjective assessment.
- Methods: Utilizes various reports (weekly, monthly) and observations to gather performance data.
3. Comparison of Actual Performance with Standards
- Importance: Identifies deviations (gap between actual and planned performance).
- Focus: Managers prioritize significant deviations (major impact on business operations).
- Control by Exception: Focuses management attention on critical deviations while minor ones are overlooked.
4. Identification of Causes of Deviation
- Analysis: Managers investigate reasons behind deviations.
- Factors: Errors in planning, coordination issues, implementation flaws, and ineffective supervision or communication.
- Insight: Understanding root causes informs corrective actions.
5. Taking Corrective Actions
- Steps: Address deviations through corrective measures (immediate actions to rectify issues).
- Adaptation: If necessary, revise plans based on new insights or changing circumstances.
- Importance of Follow-Up: Continuous monitoring ensures sustained control effectiveness.
Additional Information:
- Integration with Planning: Controlling complements planning by ensuring goals are achieved and deviations are corrected promptly.
- Continuous Process: Controlling involves ongoing monitoring and adjustment, reflecting dynamic business environments.
- Feedback Loop: Information gathered during control processes feeds back into future planning cycles, enhancing organizational learning and adaptation.
Summary:
The controlling process encompasses setting standards, measuring performance, comparing outcomes with standards, identifying causes of deviations, and taking corrective actions.
It is a vital managerial function that ensures organizational goals are met effectively and efficiently, promoting continuous improvement and adaptation in response to changing conditions.