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Controlling as a Pillar of Management

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CONTROLLING AS A PILLAR OF MANAGEMENT
Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions.
According to Brech, controlling is a systematic exercise which is called as a process of checking actual performance against standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution on to …show more content…

After three months, if profit has increased by 3 percent, management might assume that plans are going according to schedule.
The Controlling Process
The controlling process involves carefully collecting information about a system, process, person or group of people in order to make necessary decisions about each. Managers must set up control systems which consist of five key steps highlighted as follows:
STEP 1: Establish standards to measure performance
Within the firm’s overall strategic plan, managers define goals for the firm’s departments in specific, operational terms that include standards of performance to compare with organizational activities. Typically performance reports simplify such comparison by placing the performances for the same period and by computing the variance, that is, the difference between each actual amount and the associated standard.
STEP 2: Measure actual performance
Companies should prepare formal reports of performance measurements that managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, If sales growth is a target, the organization should have a means of gathering and reporting sales date.
STEP 3: Compare performance with standards
At this step actual activities are compared to performance standards. When managers read computer reports or walk through

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