Controlling, the 4th management function

This entry was posted on November 14, 2014 under production control, Uncategorized. Written by:

Controlling management function

Most of management theoreticians agree about the four major functions of management. The planning function decides the direction, the organizing function provides the resources, the leader pulls after him the organization.

It looks like a complete circle, BUT. We still need something to ensure that the organization performs up to the objectives. The fourth element of management the CONTROLLING provides the regulation, it allows to leaders – managers to use different tools – methods for monitoring performance and taking corrective action if necessary.

Controlling can be defined as the management function regulating the activity of organizations so that organizations achieves the performance level according to the expected organizational goals and standards: total production, resources expended, production costs per unit, market targets, human resource efficiency and motivation, quality of products, customer’s satisfactions etc.

The basic model of controlling is the following:
– the managers (/owners) develop standards and set goals, then
-they compare actual performance against those standards and goals.
-if necessary they take decisions to correct actions till achieving the standards and goals.

A control system is a set of methods and mechanisms with the role of increasing the probability of meeting the objectives and standards of organizations.

The major roles of control systems:
– remarking irregularities: at a first glance we could thing on undesirable surprises, such as cost increasing, losing personnel. But sometimes to fast increasing of demand, profit margins growing to fast can be a sign that something is changing and we have to be prepared with new strategies or tactics. This relates to the following role.
– identifying new opportunities: sometimes market, production, human resources change very quick. Maybe it looks like favorable, but it can be a trap. A management team with the right info on the right time can identify new directions of business, new markets.
– managing complex problems: especially when organization is growing fast, number of products and divisions grows. We still have to be aware all the time to coordinate development, resources and objectives.

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In order to improve productivity, manufactures need a vigorous production control. As new company develops managers are not able to simply observe all employee's efficiency. They need managerial and technical tools to measure, control their production and find ways to improve it.