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Controlling and Management

Updated: Apr 16


Barbora from Vision Factory

Author: Barbora Bělová

Date of Publication: 30/03/2023




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Controlling and Management


Controlling is an important function of management that involves monitoring and measuring the performance of an organisation. In particular, the purpose of controlling is to ensure that the organisation achieves its objectives effectively and efficiently.



Characteristics of controlling


Controlling has four steps:

  1. setting performance standards,

  2. measuring actual performance,

  3. comparing actual performance to standards, and

  4. taking corrective action as necessary.


controlling, management, control, management planning, management accounting

Performance standards are the desired level of performance for a particular task or activity, and they should be specific, measurable, and achievable. Specifically, actual performance is measured using various tools and techniques such as financial statements, quality control charts, and employee feedback. Therefore, the comparison between actual performance and performance standards helps identify any deviations or variances. So, the next step is to take corrective action to bring the performance back on track.



Essence of controlling


Controlling is important because it helps managers to:

  • Monitor progress towards achieving objectives

  • Identify potential problems or issues

  • Take corrective action to prevent or minimise negative impact

  • Improve performance over time

  • Evaluate the effectiveness of policies and procedures

Moreover, controlling is a continuous process that requires ongoing monitoring and adjustment. In addition, effective control requires clear communication, accurate measurement tools, and a commitment to continuous improvement.


Types of controlling


In fact, there are a lot of types of controlling. Actually, they depend on the specific needs and goals of the organisation. Some of the most common types:

  • Strategic controlling

  • Tactical controlling

  • Operational controlling

These types are connected with management planning.


The following types of controlling depend on the focus of the company or its department:

  • Personnel controlling

  • Production controlling

  • Logistics controlling

  • Process controlling

  • Financial Controlling

  • Cost controlling


Controlling and management accounting


Controlling and management accounting are two concepts that are closely related and often used together in the field of management. Management accounting is the process of collecting, analysing, and reporting financial and non-financial information. That is used by managers to make informed business decisions. Controlling, on the other hand, is the process of monitoring and regulating the activities of an organisation. So, the goal is to ensure that they are consistent with the goals and objectives of the organisation.


Navigating Organizational Performance


Management accounting provides the information necessary for controlling. The data provided by management accounting includes financial statements, budget reports, cost accounting reports, and other relevant financial and non-financial data. This information can be used to measure the performance of the organisation and to identify areas where improvements can be made.


Controlling, on the other hand, is the process of taking action based on the information provided by management accounting. Specifically, it involves monitoring the activities of the organisation to ensure that they are consistent with the organisation's goals and objectives. For example, if deviations from the plan come up, controlling takes corrective action to bring the activities back in line with the plan.



Conclusions


In summary, management accounting provides the information necessary for controlling. Controlling involves using that information to monitor and regulate the activities of an organisation. This is important to ensure that they are consistent with the goals and objectives of the organisation.


In today's rapidly changing business environment, control is more important than ever. This is because organisations need to be agile and able to adapt quickly to new challenges and opportunities. As such, the role of controlling is likely to evolve and become even more critical in helping organisations stay competitive. As a result, they will achieve long-term success.


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