Explain the importance of controlling in an organisation. What are the problems faced by the organisation in implementing an effective control system?

The importance of controlling is highlighted in the following points:

a. Controlling helps to acheive the desired objectives. and measure the progress towards them. If there is any deviation, the manager may take corrective actions. It keeps the management on the right track.

b. It helps to identify whether or not the standards set are accurate. It keeps a check on the changes taking place in the organisation. It helps to revise the standards set in the context of these changes.

c. The usage of the resources can be controlled and its wastage and spoliage can be reduced. It helps for the optimum utilisation of resources.

d. It ensures that employees know what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It motivates them and helps to contribute positively to the organization.

e. It provdies a direction to all the activities in the organization. Each department and employee is governed by predetermined standards. This ensures that overall organisational objectives are accomplished.

f. It creates order and discipline in the organisation. It also helps to eliminate the dishonest behaviour of the employees by keeping a close check on their activities.

The problems faced by the organisation in implementing an effective control system are:

a. The controlling system loses efficiency in determining quantitative standards. Some of them cannot be measured in terms of quantity. It makes the measurement of performance a difficult task. It is also not easy to compare it with standard performance. For example, job satisfaction and employee morale.

b. It is not possible to control the external factors such as a change in the government policies and technological changes.

c. Employees may see it as a restriction on their freedom.

d. It is costly in terms of cost, price and effort.It is not possible for a small enterprise.Managers must ensure that the costs of installing and operating a control system should not exceed the benefits derived from it.