Karnataka 2nd PUC Business Studies Notes Chapter 8 Controlling
→ Control: It is the power or authority to direct or order to confirm the standard performance.
→ Controlling: It is the continuous process of evaluating actual performance with standard performance of an individual, group or department.
→ Definitions: Controlling is the measuring & correcting of activities of subordinates to ensure that events conform according to the plan.
→ Importance:
- Controlling help for execution of plans
- Controlling improves employee’s efficiency
- Improve organizational efficiency & effectiveness
- Controlling is a basis for future action
- Controlling facilitates coordination
- Delegation of Authority
- Controlling simplifies supervision
- Controlling is responsible for ultimate performance.
→ Controlling Process: It involves
- Standard setting
- measurement of performance
- Comparison and locating deviations
- Analyzing causes of deviation
- Corrective action
- Attainment of standards.
→ Setting standards: Different types of standards are used for measuring the performance of different individuals. Standards may be of two types’ qualitative standard and quantitative standard.
→ Quantitative Standards: It includes Quantity, Quality, Cost, Time & etc.
→ Qualitative Standards: It includes Employee morale, consumer satisfaction, Brand leadership etc.
→ The standards for control should satisfy the following requirement:
- It should be simple & easily understandable
- It should be flexible not rigid
- It should be in accordance with the people responsible to achieve them.
- It should be consistent with the overall objective of firm.
→ Measurement of Actual performance: Once these standards are fixed for desired performance the next step is to measure the actual performance. Measurement of performance should be clear, simple, rational, relevant, and understandable without complaints and interpretation.
→ Comparing the actual performance with standards: It involves two steps
- Finding out the extent of deviations
- Identifying the causes of such deviations
- While comparing the actual performance with the standards the deviations are revealed. Once the deviations are noticed and causes for the same are determined corrective measures are adopted.
→ Analyzing the deviations: Deviations means variations from the standards. Every deviation is analyzed to find out why it has occurred and who is responsible for the same. Deviations may be Negative, Positive or Zero.
- Negative Deviations: If actual performance is less than standard that leads to negative deviations.
- Zero Deviations: If actual performance is equal to the standard that leads to Zero deviations.
- Positive Deviations: If actual performance is more than standard that leads to Positive deviations.
→ Taking corrective actions: After finding what has gone wrong, where and why, management will initiate corrective action. The remedial actions may involve:
- Review and revision of goals or standards,
- Change in the assignment of tasks
- Provisions for additional resources or new facilities
- Improvement in the selection and training of worker or reform in the technique of direction.