Business Laws and Management · Functions of Management

Controlling Function of Management for CSEET

Updated 11 October 2026 · Fact-checked

Controlling is the management function of checking whether actual performance matches planned performance and correcting any gap. The process has five steps: set standards, measure performance, compare with standards, find deviations, and take corrective action. Planning sets the targets; controlling keeps the organisation on track to reach them.

Understand Controlling

Controlling means making sure that work is going as planned. A manager sets a target, watches what is actually happening, and acts if the two do not match. Think of a driver checking the speedometer and slowing down when the speed is above the limit.

Controlling is closely tied to planning. Plans give the standards against which results are checked. Without plans, there is nothing to compare with. Without controlling, plans stay on paper and nobody knows if they worked. This is why planning is called the base of controlling, and controlling is called the follow-up of planning.

Controlling is a continuous process. It applies at every level of management and in every department. It looks forward as well as backward. Findings from control help managers make better plans next time, so planning and controlling form a cycle.

Control techniques are of two broad types. Traditional techniques include personal observation, statistical data, breakeven analysis and budgetary control. Modern techniques include return on investment (ROI), ratio analysis, responsibility accounting, management audit, PERT and CPM, and management information system (MIS). Budgetary control uses budgets, which are statements of expected results in numbers, as the standard for checking actual results.

Controlling has limits. It can be costly, it is hard to set exact standards for qualitative areas such as employee morale, and employees may resist being checked. Good control focuses on important points and does not try to watch everything.

Key formulas to remember

Steps in the control process: Set standards → Measure actual performance → Compare with standards → Analyse deviations → Take corrective action; Learn the order. Exam options often swap two steps.
Deviation: Deviation = Actual performance − Standard performance; A negative figure means performance is below the standard. Whether that is bad depends on the item: lower cost is good, lower sales is bad.
Planning and controlling link: Planning sets the standards; controlling checks results against them; Planning looks ahead. Controlling looks at results and feeds back into the next plan.
Return on investment (ROI): ROI = (Net income ÷ Investment) × 100; A modern technique that judges how well capital is used.

How to solve Controlling questions

Use this method for any question on controlling, whether it is an MCQ or a short written answer.

1Read the question and decide what is asked: meaning, a step, a technique, or the planning link.
2If it asks about a step, place it in the five-step order and check what the step actually does.
3If it describes a technique, match the clue: budgets point to budgetary control, capital returns to ROI, network of activities to PERT or CPM, and personal checking to observation.
4Decide if the technique is traditional or modern when the question asks for that.
5For planning and controlling questions, remember that planning sets standards and controlling checks against them.
6Eliminate options that mix up controlling with other functions such as directing or staffing.
7For a written answer, define the term, list the points in order, and add one short example.

Quickest way: Clue-word matching

When to use it: Use this in the OMR paper when you have under a minute per question.

Spot the clue word in the question: standard, deviation, budget, ROI, network, audit.
Standard means step one; deviation means step four; corrective action means step five.
Budget means budgetary control; return on capital means ROI; activities with time estimates mean PERT or CPM.
Pick the option that matches the clue and drop options naming other functions.
If two options remain, choose the one that mentions comparing actual with planned.

Common mistakes in Controlling

Putting 'measure performance' after 'compare with standards'.
Students think comparison comes first because it sounds like the main step.
Fix: You cannot compare until you have actual figures. Remember the order: set, measure, compare, analyse, correct.
Saying controlling is only about finding faults.
The word control sounds like punishment.
Fix: Its aim is to keep work on plan and correct it. It also shows where standards were wrong.
Treating planning and controlling as unrelated.
They are taught as separate functions.
Fix: Say that planning gives the standards, and controlling gives feedback for future plans. Both are needed.
Mixing up traditional and modern techniques.
The lists look similar and students memorise them without grouping.
Fix: Keep budgetary control, breakeven analysis, statistical data and personal observation as traditional. Keep ROI, responsibility accounting, PERT, CPM, MIS and management audit as modern.
Assuming every deviation needs action.
Students forget about tolerance limits.
Fix: Small deviations may be acceptable. Managers act on critical or large deviations, following management by exception.

Worked examples

Example 1

A company plans to produce 10,000 units a month. In one month it produces 8,500 units. Name the step of the control process used to find that production is 1,500 units short, and state the next step.

Show the solution

The standard is 10,000 units and the actual is 8,500 units.
Deviation = 8,500 − 10,000 = −1,500 units, so production is 1,500 units below standard.
Finding the size and cause of this gap is the step of analysing deviations, after comparing actual with standard.
The step that follows is taking corrective action, such as fixing machine breakdowns or adding shifts.

Answer: The 1,500-unit shortfall is found by comparing actual with standard and analysing the deviation. The next step is corrective action.

Example 2

Explain how planning and controlling are related.

Show the solution

Define both terms: planning decides in advance what to do, and controlling checks whether it is being done.
Planning gives the standards. Controlling needs these standards to measure performance.
Controlling without planning has no yardstick, so it is meaningless.
Planning without controlling is not checked, so targets may be missed unnoticed.
Results from controlling feed back into new plans, making the two a continuous cycle.

Answer: Planning and controlling are closely linked. Planning sets the targets and standards, and controlling compares actual results with them and corrects deviations. Each depends on the other, and controlling findings improve future plans.

Exam tips

Learn the five steps of the control process in order. MCQs often test the sequence.
Group techniques as traditional or modern. Questions often ask which one is not in a group.
Link each technique to its clue word: budget, ROI, network, audit.
For planning and controlling, use the phrase 'planning sets standards, controlling checks them'.
There is no negative marking in Paper 4, so attempt every question.

Practice questions from Functions of Management

Controlling: frequently asked questions

What is the controlling function of management?

Controlling is checking actual performance against planned standards and correcting any gap. It keeps the organisation moving toward its goals. It is a continuous function at every level.

What are the steps in the control process?

There are five: set standards, measure actual performance, compare with standards, analyse deviations, and take corrective action. Learn them in this order for MCQs.

What is budgetary control?

Budgetary control uses budgets as standards. Actual results are compared with budgeted figures, and differences are studied and corrected. It is a traditional control technique.

How are planning and controlling related?

Planning sets the objectives and standards. Controlling checks results against them and corrects deviations. The findings then help in making better plans, so they work as a cycle.