Controlling is the process of evaluation and correction that is needed to make certain that the business stay on track towards its goals. Planning and controlling are closely linked since planning sets the goals and standards for performance. Controlling essentially checks to make certain the plan is being followed. It also provides feedback so that the plan can be revised, if needed.
An effective control system sets standards for performance of people and processes, communicates those standards, and ensures that they are applied with appropriate monitoring and corrective action, if needed. The control process should be a continuous flow - measuring, comparing and action.
The control process is comprised of four steps:
- Establishing performance standards
- Measuring actual performance
- Comparing measured performance against established standards
- Taking corrective action
An example of how controlling can make a difference in the success of a business is Surviving in an Economic Downturn. It is possible to to stay profitable even when the world is falling apart around you. Your control system can pick up the signs of trouble and you can take appropriate steps before your business is overwhelmed by the catastrophe.