Controlling is one of the most important functions of a manager. Planning and controlling are the two sides of the same coin, they go hand in hand. One important aspect of the controlling function is what to control? Let us explore this in controlling responsibilities.
Managerial control is the comparison of the actual performances with the set standards of the company to check whether the targets and goals are being met.
When there is a deviation from such standards, an investigation must be done for the cause and corrective actions are taken.
All managers from the CEO or Chairperson of the organization to the junior supervisor perform the function of control.
However, it can be quite impossible to control every single activity of the whole organization. So the question arises – what to control?
Managers of the firm will need to decide in advance the activities and performances which are to be controlled. These can be selected based on their importance, their monetary significance in the firm, their relation to the desired results etc. Hence, controlling responsibilities leads us to two main concepts – critical point control and control by exception.
Learn the different techniques of Managerial control here in detail.
1] Critical Point Control
In a simple operating system, every activity of the firm can be closely monitored and controlled. But as the system gets more complex and layered, it gets more difficult to monitor every single activity.
In a medium, to a big sized firm, it would not be possible to control every activity of the firm. It is not economical either.
So what the management does in controlling responsibilities is to identify certain Key Areas (KRA). These are those areas whose performance is of most importance to the firm.
When there are deviations from the standards in these key areas, it will have the biggest impact on the firm and their profitability.
The underlying assumption is that these areas are critical for the survival of the firm and so they need more control.
2] Control by Exception
Control by exception is also known as management by exception. Since it is impossible to control every aspect of the firm, the managers choose to only focus on those that are significant.
So the manager will turn their attention on aspects that show significant deviation from the standards. In control by exception, only such matters deserve their attention and merit further investigation and remedial actions.
So performances that are in line with the standards or those that show minor deviations are not worthy of the attention of the managers.
So if there is no news, that will be considered good news in this system. The management presumes that if all things are going smoothly then there is no need to divert any attention to these areas.
Solved Question on Controlling Responsibilities
Q: What are the advantages of control by exception?
Ans: Some of the advantages of this way of controlling responsibilities are as follows,
- Saves time and effort of the managers. They can focus on matters that are actually in trouble
- It is also a more economical system
- Leads to optimum use of resources in the organization