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Leading
Leading involves the social and informal sources of influence that you use to
inspire action taken by others. If managers are effective leaders, their subordinates
will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this
function of management. Personality research and studies of job attitudes provide
important information as to how managers can most effectively lead subordinates.
For example, this research tells us that to become effective at leading, managers must
first understand their subordinates’ personalities, values, attitudes, and emotions.
Studies of motivation and motivation theory provide important information
about the ways in which workers can be energized to put forth productive effort.
Studies of communication provide direction as to how managers can effectively and
persuasively communicate. Studies of leadership and leadership style provide
information regarding questions, such as, “What makes a manager a good leader?”
and “In what situations are certain leadership styles most appropriate and effective?”
Controlling
Controlling involves ensuring that performance does not deviate from
standards. Controlling consists of three steps, which include (1) establishing
performance standards, (2) comparing actual performance against standards, and (3)
taking corrective action when necessary. Performance standards are often stated in
monetary terms such as revenue, costs, or profits but may also be stated in other
terms, such as units produced, number of defective products, or levels of quality or
customer service.
The measurement of performance can be done in several ways, depending on
the performance standards, including financial statements, sales reports, production
results, customer satisfaction, and formal performance appraisals. Managers at all
levels engage in the managerial function of controlling to some degree.
The managerial function of controlling should not be confused with control in
the behavioral or manipulative sense. This function does not imply that managers
should attempt to control or to manipulate the personalities, values, attitudes, or
emotions of their subordinates. Instead, this function of management concerns the
manager’s role in taking necessary actions to ensure that the work-related activities of
subordinates are consistent with and contributing toward the accomplishment of
organizational and departmental objectives.
Effective controlling requires the existence of plans, since planning provides
the necessary performance standards or objectives. Controlling also requires a clear
understanding of where responsibility for deviations from standards lies. Two
traditional control techniques are budget and performance audits. An audit involves
an examination and verification of records and supporting documents. A budget audit
provides information about where the organization is with respect to what was
planned or budgeted for, whereas a performance audit might try to determine whether
the figures reported are a reflection of actual performance. Although controlling is
often thought of in terms of financial criteria, managers must also control production
and operations processes, procedures for delivery of services, compliance with
company policies, and many other activities within the organization.

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