Controlling as a function of management refers to the process of comparing actual performance with the planned performance to ensure that all activities are up to the standards.
The steps in the process of controlling are:
(i) Setting performance standards: It sets quantitative and qualitative standards of performance as the criteria for controlling. The standards must be flexible, so that they can be modified to incorporate changes in the internal and external business environment.
(ii) Measurement of actual performance: In this step the actual performance is measured in the same units in which the standards are set. Small organisations measures the performance of every task performed but large scale organisations measures the performance by conducting sample testing.
(iii) Comparing actual performance with standards: In this step the actual performance is compared with the standard performance to check if there are any deviations between actual performance and desired results.
(iv) Analysing deviations: In this step the causes of deviations in the actual performance are analysed by using critical point control method or management by exception method.
(v) Taking corrective action: In this step the corrective and preventive actions are taken for the deviations which are beyond permissible limits, so that such deviations do not occur again and standards are accomplished effectively.