Controlling is a major function among the four functions of management. Every manager needs to learn and understand planning, organizing, controlling, and decision making to survive in the corporate sector. Each function has its significance and responsibilities. Let us discuss more the function of controlling and its responsibilities.
Definition
Controlling is a management function that can be defined as the process of monitoring various activities in the organization, delegating authority and work to all levels of employees, taking care of any unplanned deviations along with the respective remedies for the growth of an organization. The person who takes care of this activity is nothing but the controller. The duties owed by a controller in an organization are named as controlling responsibilities.
Controlling Responsibilities
If we observe the job description of a controller, we can easily identify the controlling responsibilities. Let us see the controlling responsibilities in detail.
Supervising
Financial decisions
Financial reports
Knowledge
Collaboration etc
Supervising:-
As controlling is one of the major functions of management, it has high prioritized responsibilities. The controller will be in leading roles or supervising roles. They supervise several activities and also low-level employees. They need to maintain a healthy and favorable atmosphere with motivational practices. The controller needs to initiate the integration plans, personality development programs, team-based fun activities etc.
Financial Decisions:-
It is one of the most important controlling responsibilities because the beginning and end of the organization will be decided by the financial issues majorly. So taking financial decisions is not at all an easy task and it requires, more responsible and skillful person. The responsibilities like preparing the budgets, allocating funds, acquiring funds, implementing various advanced Financial systems and techniques for cost-cutting, etc.
Financial Reports:-
Recording and submitting reports of all the financial transactions is also one of the duties among the controlling responsibilities. The low level controlling employees will submit reports to the higher Financial supervisors for regular intervals of time. This helps to maintain transparency, avoids unnecessary expenses, can take spontaneous decisions and can control the over expenses, and can plan for cost cuttings within the available resources.
Collaboration:-
It is a middle-level responsibility of all the controlling responsibilities. Here the controller needs to work or spend more time with the personnel and tries to collaborate the messages from lower-level to higher-level employees and vice versa. These controllers need to maintain a friendly environment in the organization and between the employees to get more productivity. Also, the controller needs to collaborate with the stakeholders and financial audit officers to be understandable and cooperative with the management of the organization.
Knowledge:-
Knowledge is divine. As the controller needs to work with all departments in the organization, they may need to have a basic idea about different things. Besides this knowledge, the controller needs to attend sound knowledge especially on taxation, Financial issues, audits, prices and expenses, accounting methods, etc. then only the controller can take spontaneous decisions without depending on others and can analyze the scenario properly.
Other Responsibilities:-
the controlling responsibilities may not restrict to some point. They have various kinds of responsibilities in different departments. If we take the hitter department, the controller needs to hire auditors, executives, taxation agents. Similarly, in the purchasing department, if the controller has good knowledge about prices and resources, he can surely make a perfect deal with the sellers.
These are the various controlling responsibilities that can be looked after by either single or multiple controlling employees based on the size and type of organization.
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Before going to see Solved Questions on Controlling Responsibilities, let us have a glance at the controlling techniques. With the advances down generation, the employees also learned and implemented several techniques for proper controlling in the organization. They are as follows-
Direct supervision
Financial statements, reports, and budgetary control.
Break-Even Analysis
Return on Investment
Management by Objectives
Management information systems
PERT and CPM techniques
Management Audit.
These are the various techniques available for controlling. These are also a part of controlling responsibilities for the controller to learn and understand. Because the controller knows these, he can minimize the hard work and can produce more productivity by using these techniques and also can reduce defects, deviations, etc.
Solved Questions on Controlling Responsibilities
1. What are the Steps to be Taken for Effective Control?
Ans. Controlling is the key function for any kind of organization. The remaining functions were also dependent on controlling activity. For example, planning is the immediate step of controlling. Similarly, the other functions also. That's the reason to maintain effective control in the organization; we need to follow certain steps or measures. They are as follows-
One should avoid manual data and maintain automated records for accuracy.
It is always good to maintain clear communication. And should avoid every single miscommunication then and there itself.
Choosing the right persons or especially from management for the financial controllers.
It is good to give autonomy to other teams also.
2. Distinguish Between Controlling and Accounting?
Ans. Controlling is a restricted principle to be followed in the organization concerning all the data and departments like maintaining recording data, on-time activities, decision making, following standards and policies, etc. It is a large process that involves multiple tasks. Accounting is also one part of the controlling.
Whereas accounting is my third of recording all the financial transactions which may come to the company or may go out of the company. These accountant's records were helpful for future use, helping him expand the company or diversify the company. These also help in making financial decisions.
3. Who is a Business Controller?
Ans. A business controller is a person who always tries to reduce cost, optimization of resources, and gets the most effective products. He always assists the CEO, CFO, and COO in sharing information regarding the internal risks, external risks. He also acts as an advisor in making trading decisions. He doesn't involve in the taxation, audit-related issues which are completely dealt with by the financial controller.
FAQs on Key Responsibilities in Controlling
1. What are the key responsibilities in the controlling function of management?
The key responsibilities in the management function of controlling are centred on ensuring that an organisation's activities conform to its plans. These responsibilities include:
- Setting Performance Standards: Establishing clear, measurable benchmarks against which actual performance will be evaluated.
- Measuring Actual Performance: Systematically gathering data on the work accomplished and the results achieved.
- Comparing Performance with Standards: Analysing any gaps or deviations between the actual results and the established benchmarks.
- Taking Corrective Action: Implementing necessary adjustments to fix negative deviations or capitalize on positive ones, thereby ensuring efficient resource use and goal attainment.
2. What is the main purpose of controlling in a business organisation as per the CBSE syllabus?
The main purpose of controlling is to ensure that all activities within an organisation are performed according to the pre-determined plans and established standards. It is a goal-oriented function designed to identify deviations from the plan at an early stage. By finding errors and initiating corrective actions, controlling helps in the efficient utilisation of resources and the timely achievement of organisational objectives, making it an indispensable function of management.
3. What are the essential steps involved in the process of controlling?
The controlling process, as a core management responsibility, follows a systematic sequence of steps to ensure performance aligns with organisational plans. The essential steps are:
- Setting Performance Standards: Defining the specific criteria for performance.
- Measurement of Actual Performance: Objectively measuring the work that has been completed.
- Comparing Actual Performance with Standards: Identifying the nature and extent of any deviation.
- Analysing Deviations: Determining the significance and cause of deviations, often using principles like Critical Point Control.
- Taking Corrective Action: Implementing measures to correct significant deviations and prevent their recurrence.
4. How does the responsibility of controlling ensure that organisational goals are met efficiently?
The responsibility of controlling ensures goals are met efficiently by creating a feedback loop for continuous improvement. By measuring actual performance against planned standards, managers can promptly identify inefficiencies, resource wastage, or procedural flaws. Taking timely corrective action not only rectifies the immediate issue but also provides valuable insights for refining future plans. This systematic process ensures that all organisational resources—such as time, capital, and materials—are used optimally, minimising waste and keeping all activities focused on the intended objectives.
5. Why is it often said that the management function of planning is meaningless without the controlling function?
Planning is considered meaningless without controlling because controlling is the function that validates and ensures the execution of plans. Planning sets the objectives and maps the course of action, but it remains a theoretical exercise on its own. The controlling function is responsible for translating plans into reality by:
- Tracking progress against the set targets.
- Identifying any deviations from the intended path.
- Implementing corrective measures to bring performance back in line with the plan.
Without controlling, a manager would have no mechanism to know if the plans are being followed or if goals are being achieved, making the initial planning effort unproductive. Essentially, planning sets the course, and controlling ensures the organisation stays on it.
6. Can a manager effectively fulfil the responsibility of controlling without first setting clear performance standards? Why or why not?
No, a manager cannot effectively fulfil the responsibility of controlling without first setting clear performance standards. The entire controlling process is fundamentally based on comparison. If there are no established standards or benchmarks, there is no basis for measuring performance. It becomes impossible to determine if work is proceeding as planned, if there are deviations, or if any corrective action is required. Clear standards, both quantitative and qualitative, serve as the foundation of the controlling function; without them, any attempt at control is merely guesswork and ineffective.
7. How do modern controlling techniques, like Management by Exception (MBE), help managers fulfil their controlling responsibilities more effectively?
Modern controlling techniques help managers fulfil their responsibilities more effectively by enabling a more strategic and efficient approach. For example, Management by Exception (MBE) is a key technique where managers focus their attention only on significant deviations from the standard. Instead of reviewing every activity, they manage by exception, which allows them to:
- Save valuable time and effort.
- Concentrate on the most critical issues that require their expertise.
- Empower subordinates to handle routine matters, fostering delegation and motivation.
This makes the controlling process more efficient and strategic, ensuring that managerial attention is directed where it is most needed.
