The controlling function of management is the continuous process of comparing actual outcomes with planned outcomes. Controlling helps keep a company on track by monitoring its performance.
The control process begins by setting standards. Standards are measures against which performance is compared. Businesses use various types of standards, including time, quantity, cost, and quality standards.
The next step in the control process is to measure performance. A variance is the difference between a standard and the actual performance. For example, a quality variance occurs when the quality of a product deviates from set expectations.
After performance is measured for variances, management takes the final step in the control process, which is to take action. If the performance matches the standards, no further action is required.
If the performance does not match the standards, corrective actions must be taken. Either the standard or the performance should be revised. If products are defective, new equipment may be needed to improve performance.
Controlling attempts to keep an organization on track by providing the means to monitor the performance of individuals, divisions, departments, and the organization as a whole.