Chapter 8: Controlling

Planning is the process of creating a structure in advance regarding the work that needs to be done. It is helpful in defining the objectives and goals that need to be achieved by an individual or organisation. Therefore, it is said that planning is about looking ahead, which involves predicting about future. Controlling takes into consideration the assessment of past performance and comparing them with set standards. Due to these characteristics, it can be said to be a backward-looking future. But all these statements are partially correct, as planning is done based on past experiences and how to do better, similarly controlling although looks at past performance, its aim is to improve future performance. Hence, it can be said that both planning and controlling are forward and backward-looking functions.

This statement is with regard to the principle of management by exception. As stated in this rule, it is not possible to control everything effectively. This principle states that instead of trying to control all the deviations, there should be some defined ranges that are set up, and only when the deviations go beyond the range they should be notified to managers for control measures.

Budgetary control is a technique that is related to preparing plans in the form of budgets. It is a financial statement that tells us what needs to be achieved and the policies that need to be followed for the time period. Performance is compared with the standards that were set in the budget. Such a comparison helps in the identification of deviation and helps in taking corrective steps. There can be different budgets for different divisions. Budgets act as motivation for employees and encourage them to reach their objectives. With proper budgeting measures, resources can be evenly distributed and utilised appropriately.

Management audit is the process of appraisal of the management in an organisation. It is useful in improving the effectiveness of the management to carry out its objectives. It evaluates the functions of the managers and highlights areas where deficiencies are observed. The following point will be helpful in explaining the importance of management audit as a technique of controlling:

1. It helps in identifying deficiencies in the work, which will help in taking corrective measures necessary for improvement.

2. By performing a management audit, various management activities can be monitored, which helps in improving the overall efficiency of the organisation.

3. Enhanced coordination can be observed between employees and departments as work is monitored for effectiveness.

4. Helps organisation to adapt to environmental changes, and this can be ensured by having strategies and policies updated continuously.

In this situation, the principle of management by exception should be followed. This principle states that any effort to control everything may end up having control of nothing. Only deviations that are beyond the limit will need to be acknowledged, and appropriate actions need to be taken. Therefore, Mr. Bhanu should not be terminated for such a small reason.