Controlling is one of the four core elements and also the last element of management. A management of an organization is not an accurate one without the controlling part. In the first step of management, a plan is developed in which an organization’s goals and objectives are clarified. Additionally, the methods to achieve those goals and objectives are established. In controlling, a process is developed in which the current status of actual performance against the planned goals of the organization is measured and evaluated.
The controlling process involves establishing a set of standards to measure organizational performance, measure actual performance, and compare it with the standards.
The traditional process for management control consists of the following steps:
Step 01: Actual performance is compared with planned performance,
Step 02: The difference between the two is measured,
Step 03: Causes contributing to the difference are identified, and
Step 04: Corrective action is taken to eliminate or minimize the difference.
The reasons why controlling is important are elaborated below.
Importance of Controlling in Business
In business management, the only way to ensure the organization’s growth is through the utilization of the controlling process. The importance of controlling in business management can only be understood with some key aspects that are obtained by controlling in business management.
Attaining Goal: Accomplishing organizational goals is more comfortable with the step of controlling. Controlling in business management guides the whole work process and leads to the achievement of organizational goals. All the errors and lacking within the organization can be defined with controlling, and goals can be attained more quickly. All the mistakes can be easily identified and resolved in this process. Managing business management is extremely helpful for achieving organizational goals in a short amount of time.
The judgment of the Standards: Comparing the actual work and performance of the workforce can easily be judged with the step of controlling. Controlling is the very last step of the management process, yet the most important one. The judgment of the standards is more natural with managing and obtaining maximum success is possible. Controlling opens the gate for new opportunities, and the proper use of the process can help with the judging accuracy of the standards of the workforce. Controlling enhances the whole workforce and helps in the judgment process.
Enhanced Efficiency: Controlling defines the mistakes and allows resolving them and improving for the next time. Employees get enough scope to learn from their mistakes and step forward. For that efficiency enhances and the employees are more focused on their work. With proper control, the energy within the organization grows. Since the administration is aware of their previous mistakes and knows how to resolve them. It positively affects the whole organization, and it can only be achieved by controlling the business properly.
Simplifies Supervision: Supervision is a critical aspect that ensures employees’ effectiveness and efficiency. Controlling helps the heads to supervise their subordinates and brings new possibilities for the organization. Controlling helps the organization from the inside, and with close supervision, the employees constantly remind them that they have to get their job done correctly and within the given time. The employees stay motivated this way, and the workflow increases. Controlling makes it easier for the manager to ensure the organizational goal is being achieved.
Effective Delegacy of Administration: With proper controlling the whole process is under the surveillance of the administration. All the heads can use their power effectively, and the efficiency among the employee’s increases. A proper system of control helps the administration be active, and the company’s’ future growth can be ensured. All the previous mistakes can be avoided, and improvements can be made. In business management, controlling play a severe important role that develops the working process of the company. Employees get more serious about their job, and the delegacy of the administration is fully enforced.
Cost Efficiency and better planning: Proper controlling helps business management in a way that the organization gets the opportunity to be more cost-efficient and plan for bigger goals. Controlling makes sure that the organization receives a bird’s eye view on the whole period of work. The upper management gets a clear picture of everything within the organization. If any mistake or side can be resolved or improved, it is covered by the controlling process. For which the administration knows their next move and gets the scope to be cost-efficient. Having a clear view also helps the administration have the opportunity to learn from their mistakes and get the chance to make a better plan for the next business year.
Other Benefits of Controlling in Business Management
Measuring the accuracy of performance – you can measure the performance of the operations that are being processed.
Efficiency in utilizing resource – you can use your resources efficiently.
Improved employee motivation – as you evaluate and compare the performance, you in the next step give directions to your employees on how to achieve optimal performance which helps to motivate the employees.
Orders and discipline – when everything is in a controlled situation, it gives orders and discipline in an organization.
The Performance of employees –as you find out the lacking behind the bad performance, you work on improving it. It helps to ensure the higher performance of the employees.
Minimize Wastage – as you ensure the optimal utilization of resources, it helps to minimize the wastage as well.
Minimizing mistakes and errors – it helps to minimize error and mistakes.
In Conclusion
We have pointed out and elaborated the importance of controlling in business. As controlling is one of the four functions of management, it has remarkable importance in management and so in the business. It helps you to measure the performance, evaluate it, and take proper steps, and finally, eliminate discrepancies in the organization.
Sources:
- https://en.wikipedia.org/wiki/Management
- https://www.kullabs.com/classes/subjects/units/lessons/notes/note-detail/
Sheikh Faizul Haque is an internet entrepreneur and the founder of The Strategy Watch; Graduated from North South University with a double major in Accounting & Finance in Bangladesh.
With a strong interest in developing and improving Business Strategy and to Conduct Business Analysis.