Controlling is the last function of management and ensures that all earlier functions are performed as desired and planned.
It is defined as a management function which aims at ensuring that organisational activities are performed as planned by comparing the actual execution with the plans made. Further, on comparison, if any deviations are found, then controlling also finds out the reasons for such deviations and suggests remedial actions.
Control in an important function of management. It is an essential feature of scientific management. In fact much of the precision of managerial education is focused on the improvement of control techniques.
Learn about: 1. Introduction to Controlling 2. Meaning of Controlling 3. Definitions 4. Features and Concept 5. Characteristics 6. Elements 7. Nature and Purposes 8. Scope 9. Principles 10. Objectives 11. Types
12. Techniques 13. Interdependence Between Planning and Control 14. Essentials of a Good Control System 15. Measures to Overcome Resistance to Control 16. Danger and Limitations 17. Suggestions.
Controlling: Meaning, Definitions, Characteristics, Principles, Nature, Scope, Types, Techniques and Objectives
Controlling – Introduction
All organizations, business or non-business, face the necessity of coping with, problems of control. Like other managerial functions, the need for control arises to maximize the use of scarce resources and to achieve purposeful behaviour of organization members. In the planning stage, managers decide how, the resources would be utilized to achieve organizational objectives; at the controlling stage; managers try to visualize whether resources are utilized in the same way as planned.
Thus, control completes the whole sequence of management process. One reason control is needed is that the best of plans can go awry. But control also helps managers monitor environmental changes and their effects on the organization’s progress. Given the pace of change in the organizational environment in recent years, this aspect of control has grown steadily more important.
Control is the process of comparing actual performance with established standards and initiate corrective steps if deviations occur. Planning, organising, coordinating, and staffing and directing are only preparatory steps for getting the work done; it is only through the process of control that management is able to maintain the “equilibrium between ends and means, output and effort.” It is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organization’s objectives (Robert Anthony).
Once the plans are put into operation through directing, it becomes necessary to judge regularly whether the actual results are consistent with the planned results. This process of evaluating the actual performance in comparison with the planned targets and taking suitable corrective actions whenever, necessary is known as controlling.
Control in an important function of management. It is an essential feature of scientific management. In fact much of the precision of managerial education is focused on the improvement of control techniques.
The term ‘control’ may give different meaning in different contexts owing to its non-standardised use in diverse fields. It is generally used for putting restrains over the elements being controlled.
It is also used for providing information and data for appropriate actions such as control room of a railway station or ship yard. In managerial terminology, control is ensuring work accomplishment according to plans. Thus, basically, control is a process that guides activity towards some pre-determined goals.
A properly designed system of control alerts managers of the existence of potential problems and allows them to take corrective actions when necessary. The basic purpose of a well-designed control system is to ensure that results are achieved according to plan. Control is not just score-keeping. It is not just plotting the course and getting locations’ reports. It is rather, steering the ship.
According to Fred Gsteingraber, some of the most pulsing environmental changes are the changing nature of competition the need to speed up the order-to-delivery cycle, the importance of “adding value” to products and services as a way of creating customer demand, changes in workers and organizational cultures, and the increasing need for delegation and teamwork within organization.
Control is a fundamental management function. It ensures the accomplishment of work according to plans. Control can be described as that part of management function which continuously regulates the activities of a concern to obtain the expected results. In the past, managers believed that the necessity of control arose only when something went wrong.
The object of control, then, was to find out the person responsible for wrong events and to take action against him. This is a negative view of control. According to scientific management, the primary object of control is to reveal the variations between performance and standard, and to take steps to prevent such variations in future.
Controlling – Meaning
Controlling consists of the steps taken in management to confirm that plans are being implemented and results being obtained as per the expected and pre-stated standards and guidelines. Where the performance deviates from the agreed and benchmarked levels, corrective action is immediately taken.
Controlling can be thought of as a process of monitoring performance and taking corrective action wherever necessary to get the desired results. This will involve checking performances, comparing with targeted results, issuance of instructions and rectification of errors, etc.
Given below are the two main objectives of controlling:
1. It facilitates coordination.
2. It helps in planning.
Thus, we see that controlling ensures that all actions are being carried out as per the plan, checks any deviation from the charted plan and takes corrective measures to make certain that the pre-decided course is being steered. Now, this is not as easy as it looks.
For better controlling, standards of performance have to be established, information systems have to be designed to get timely feedback, areas of weakness have to be identified and worked upon, workforce has to be given required training and the actual performance has to be compared with established standard. Benchmarks have to be established or changed as and when required. All these activities have to be done on a continuing basis.
It is the process managers go through to control. It is the process of regulating organisational activities so that actual performance conforms to expected organisational standards and goals. Thus, controlling means that managers develop- (i) appropriate standards (ii) compare ongoing performance against those standards and (iii) take steps to ensure that connective actions are taken when necessary. A good controlling system is generally designed to keep things from going wrong, not just to correct them afterwards. Like a ship’s rudder, controlling keeps the organisation moving in the proper direction.
Controlling – Definitions
Controlling is the last function of management and ensures that all earlier functions are performed as desired and planned. It is defined as a management function which aims at ensuring that organisational activities are performed as planned by comparing the actual execution with the plans made. Further, on comparison, if any deviations are found, then controlling also finds out the reasons for such deviations and suggests remedial actions.
Thus, controlling is a checkpoint to see that efforts put in earlier managerial functions, i.e., planning, organising, staffing and leadership is being reaped by proper execution. In this sense, controlling is symbolic to ‘looking back’ as it determines whether actual execution is according to the plans; performance of employees is in congruence with organisational goals; and finally taking corrective measures if any deviations are observed.
Although control is listed as a last function of management, but it is not one-time exercise. As other functions of management arc continuous and pervasive, so is the control function. The requirement for control function is felt immediately after execution which may occur at different levels at different point of times. In fact, control being the last function and planning being the first function of management are strongly connected.
Effective planning provides a foundation for control function, i.e., in the absence of planning, control function has no role to play as it does not have benchmark to evaluate the performance. Similarly, in the absence of control, planning is purposeless as there is no corrective measure for deviations from plans thus making planning a redundant exercise. Control function, thus, is one of the most essential functions of management.
Control has been defined by different authors differently.
The following are some popular definitions of control:
(1) “Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and the principle established. Its object is to point out the weakness and error in order to rectify them and prevent reoccurrence. It operates on everything, i.e., things, people and action.”…………..H. Fayol
(2) “Control is checking current performance against predetermined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance and also recording the experience gained from the working of these plans as guide to possible future need.”…………….E. F. L. Brech
(3) “Controlling can be defined as the process of determining what is to be accomplished, that is the standard; what is being accomplished, that is the performance; and if necessary applying corrective measures so that performance takes place according to plans, that is, in conformity with the standard.”…………….G. R. Terry
(4) “Controlling is the measuring and correcting of activities of subordinates to ensure that events conform to plans.”…………………. Koontz and O’Donnell
(5) “Control is the function of constraining and regulating action is accordance with the plans for the achievement of specified objectives.”……………….. R. C. Davis
(6) “Control, in its managerial sense, can be defined as “The presence in a business of that force which guides it to a predetermined objective by means of per- determined policies and decision.”…………….. Dalton E. Mc. Farland
Thus, we see that control is fundamental management function that ensures work accomplishment according to plans. It is concerned with measuring and evaluating performance so as to secure the best results of managerial efforts.
Few more such definitions are listed below:
George R. Terry, “Controlling is determining what is being accomplished, that is, evaluating the performance and, if necessary, applying corrective measures so that the performance takes place according to plans.”
Koontz and O’Donnell, “Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans.”
Harold Koontz – “Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished.”
Henri Fayol – “Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from recurring.”
Dale Henning – “Control is the process of bringing about conformity of performance with planned action.”
Robert J. Mockler – “Management control can be defined as a systematic effort by business management to compare performance to pre-determined standards, plans or objectives in order to determine whether performance is in line with these standards and presumably in order to take any remedial action required to see that human and other corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives.”
E.F.L. Brech – “Control is checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance.”
Controlling – Features and Concept
The main features and concept of control are briefly described below:
1. Control is a continuous process – Control is a continuous process. The superior has continuous watch over the entire operations. Besides, he ensures that all the efforts are made to achieve the desired objectives.
2. Control is universal – Control is applied at all levels of management. The managers of business and non-business concerns use control to obtain desired goals.
3. Control is forward-looking – Control aims at future because one can control future events and not the past. The future activities may be controlled on the basis of past experience.
4. Control is a dynamic process – Control is flexible and not rigid. Control involves frequent review of standards of performance.
5. Control involves measurement – Control requires measuring results against pre-established targets. In fact, the heart of control process is evaluation and measurement.
6. Control is an influence process – The behaviour of a responsible person is influenced by the control process. Control influences the people to conform to the norms and standards in performance.
7. Control involves corrective action – The management takes corrective action if there is any deviation from the standards. If it does not do so, the purpose of control will not be achieved.
8. Control is a managerial function – Control is one of the managerial functions. It is not only the function of chief executive but is the duty of every manager. A manager is responsible for whatever work is assigned to him.
9. Control involves review of past events – Control leads to appraisal of past activities. Thus, it is looking back. The deviations in the past are revealed by the control process. This is also known as feedback information.
Controlling is the process of evaluating actual performance and, if necessary, taking corrective actions so that the performance is in accordance with planned performance.
Thus, controlling as an element of management process involves analyzing whether actions are being taken as planned and taking corrective actions to make these to conform to planning.
Controlling has the following features:
1. Controlling is both backward looking as well as forward looking. It is backward looking because control action is based on the past performance. It is forward looking because one can control future happenings and not the past. In the light of the past performance, managers suggest corrective actions for future period.
2. Controlling is relevant at all management levels though nature, scope, and limit of controlling function may be different at different management levels.
3. Controlling is a continuous process. It follows a definite pattern and time-table, month after month and year after year on a continuous basis.
4. Controlling system is action-oriented as it indicates the areas of performance in which control actions may be taken.
Planning and controlling are closely related to each other. If you do not decide on the targets and goals there is nothing for you to control i.e., if you do not know the direction in which to go where is the question of controlling. And remember, controlling is the basic function of every manager.
Controlling – Top 8 Characteristics
These are following characteristics of controlling:
1. Control is Based on Planning – Control is designed to evaluate actual performance against predetermined standards. Planning sets the course, and control ensures action according to the chosen course of action. Control is said to be last step in management process but really speaking it begins with the setting of a plan. It implies the existence of plans or standards.
2. Information is the Guide to Control – Control depends upon the information regarding actual performance accurate and timely availability of feedback is essential for effective control action. This requires continuous monitoring and review of operations.
3. Action is the Essence of Control – The essence of control lies in the action to taken to satisfy actual performance. Mere reporting of actual performance is not sufficient so it is only action which adjusts performance to predetermined standards. Timely action to correct defects minimises waste of time, money and efforts.
4. Delegation is the Key to Control – An executive can take corrective action only when he has being delegated necessary authority for it. Control becomes necessary when authority is delegated because delegator remains responsible for the duty control standards help a manager to expand his span of management.
5. Control aims of Future – Control is looking at the future through the eyes of the past. A sound control is preventive in nature, it does not curtail freedom of action but it serves as a cheque on the performance.
6. Control is a Universal Function – Every manager has to exercise control over the subordinate’s performance. No manager can get things done without the process of controlling. Therefore, control is an essential managerial function at every level and the process of management is incomplete without it.
7. Control is Continuous – It is a never-ending and dynamic process involving continuous review of results and standards.
8. Control has an Objective – Control is not an end in itself but it is the means of accomplishing desired objectives. The function of controlling is positive i.e. to make things happen rather than to create hurdles in performance.
Thus, planning is the basis of control, action its essence, delegation its key and information its guide.
Controlling – 4 Essential Elements (With Steps)
The essential elements of any control system are:
1. Establishment of standards;
2. Measurement of performance;
3. Comparison of performance with standards ; and
4. Taking corrective action.
These steps are discussed below:
The first step in control process is the setting up of standards of measurement. Standards represent criteria for performance. A standard acts as a reference line or a basis of appraisal of actual performance. Standards should be set precisely and preferable in quantitative terms. It should be noted that setting standard is also closely linked with and is an integral part of the planning process. Standards are used as the criteria or benchmarks by which performance is measured in the control process. Different standards of performance are set up for various operations at the planning stage. As a matter of fact, planning is the basis of control.
Establishment of standards in terms of quantity, quality and time is necessary for effective control because it is essential to determine how the performance will be appraised. The second step in the control process, i.e., measurement of performance, has no sense unless it can be compared with some predetermined standards. Standards should be accurate, precise, acceptable and workable. Standards should be flexible, i.e., capable of being changed when the circumstances require so. Standard is bound to fail if it is based on records of past performance which show either too high or too low achievement.
After establishing the standards, the second step is to measure actual performance of various individuals, groups or units. Management should not depend upon the guess that standards are being met. It should measure the performance and compare it with the standards. The quantitative measurement should be done in cases where standards have been set in numerical terms.
This will make evaluation easy and simple. In all other cases, the performance should be measured in terms of qualitative factors as in case of performance of industrial relations manager. His performance can be measured in terms of attitude of workers, frequency of strikes and morale of workers. Again, attitude and morale of workers are not capable of being measured quantitatively. They have to be measured qualitatively.
Appraisal of performance or comparing of actual performance with predetermined standards is an important step in control process. Comparison is easy where standards have been set in quantitative terms as in production and marketing. In other cases, where results are intangible and cannot be measured quantitatively, direct personal observation, inspection and reports are a few methods which can be used for evaluation. The evaluation will reveal some deviations from the set standards. The evaluator should point out the defects or deficiencies in performance and investigate the causes responsible for these.
All deviations need not be brought to the native of top management. The deviations should be brought to the notice of top management when they are too high. A range of deviations should be established beyond which the attention of top management is warranted. Only such cases should be reported up which pinpoint exceptional situations. This is what is known as ‘management by exception.’
According to Dale, the control reports should meet there criteria. Firstly, control reports must produce figures that are truly comparable from one period to another and from one section of the business to another. Secondly, they must be coordinated so that they not only portray the results in different sections of the business, but also make plain the reasons why the business is or is not doing so well as could be expected. Finally, they must be presented in such form that the manager can get the bird’s eye view.
The final step in the control process is taking corrective action so that deviations may not occur again and the objectives of the organisation are achieved. This will involve taking certain decisions by the management like replanning or redrawing of goals or standards, reassignment or clarification of duties. It may also necessitable reforming the process of selection and training of workers. Thus, control function may require change in all other managerial functions. If the standards are found to be defective, they will be set up again in the light of observations.
Joseph Massie has pointed out that a manager may commit two types of mistakes at this stage – (1) taking action when no action is needed, and (2) failing to take action when some corrective action is needed. A good control system should provide women basis for helping the manager estimate the risks of making either of these types of errors. Of course, the final test of a control system is whether correct action is taken at the correct time.
Controlling – Nature and Purpose
We cannot choose a way of life in which there is no control internal and or external. We can only change the controlling conditions. In management chain, control has unique importance as it ensures the realisation of stated goals and objectives. At the lower levels of management hierarchy, e.g., at supervisory level, control is the real essence of management.
At present, management experts view control as comprising of two components. One part is related to the achievement of effective control by a manager on his subordinates through leadership, supervision and motivation of their activities and performance. This means controlling the human element in the enterprise.
This is the vital aspect of controlling as a manager has to implement the plans, policies and procedures only through human resources and human resources are our greatest assets in any joint effort. A manager must control people. If people are controlled properly, actions and events will take place as per plans.
Managers, therefore, control things by controlling people. The second part of controlling is related to the evaluation of actual work performance or output and the initiation of timely correction when necessary to rectify errors and deviations or variances.
This is the control mechanism with a feed-back loop present in the planning-control-feedback cycle. Control from this point of view can be defined as regulation of work activities in accordance with pre-determined plans so as to ensure the achievement of organisation objectives.
The management function of control aims at:
1. Verifying the actual performance and standard performance,
2. Regulating the actual performance in accordance with the standard,
3. Finding out the variations from the standard performance,
4. Rectifying the variations,
5. Preventing such variations in future,
6. Minimizing waste at all levels, and
7. Increasing efficiency, production and productivity.
Controlling – Scope
It is significant to know the critical areas where effective control can be exercised. The scope of control is very wide. A well-designed control system covers almost all management activities.
The main areas of control are as follows:
i. Control over organization – This is accomplished through the development of organization charts and organization manuals.
ii. Control over policies – Policies of an organization are controlled by policy manuals. The success of an organization depends on the proper implementation of its policies.
iii. Control over personnel – The personnel manager prepares a control plan for controlling personnel. Employees working at different levels in the organization must perform their assigned duties well.
iv. Control over wages and salaries – This type of control is exercised through job evaluation programmes and wage (salary) analyses. Wage (salary) committees are formed for controlling wages and salaries.
v. Control over costs – This control is exercised by the cost accountant through setting cost standards for various elements of costs (such as materials, labour, and overheads). Cost control is implemented through standard costing and budgetary control techniques.
vi. Control over methods – This control is accomplished by conducting periodic analysis of activities of each department. This control is exercised with a view to eliminate non-essential motions, functions, and methods.
vii. Control over capital expenditure – A capital budgeting committee is constituted to review the project proposal and to approve the project. This control is exercised through a system of evaluation and ranking of projects.
viii. Control over research and development – Indirect control is exercised on research and development, as such activities are highly technical in nature. Control is exercised by improving the ability of research staff through training programmes and other devices.
ix. Control over external relations – The public relations department is responsible for controlling the external relations of the enterprise. It prepares policies and takes action in improving external relations.
x. Overall organizational control – Overall control is effected through budgetary control. A master plan is prepared for overall control and all the departments are involved in this process.
Controlling – 4 Important Principles
According to Lyndall (Lyndall) Urwick, there are four principles of managerial control. These are uniformity, comparison, utility and the exception. An understanding of these principles has been considered as important for grasping and appreciating the idea of managerial control.
A brief discussion of these principles is as follows:
(1) The Principle of Uniformity:
The object of control is to derive the best work performance. In business, it is necessary that principle of uniformity must be observed. It requires the presentation of data, information, figures and reports for control purposes in terms of organisation structure. The principle of parity between authority and responsibility must be followed.
(2) The Principle of Comparison:
A good control system must provide quick comparisons, so that the manager of control can attend to possible trouble, while the operation is ‘in control’. The purpose of comparison is not only to determine the deviation and mistake but to enable the manager to predict future results. Such control is supposed to pose a challenge to each individual.
(3) The Principle of Utility:
Under this Principle the value of reports for control changes directly with the suitability of the period covered by report keeping in view of the purpose of control. With ‘utility’ the concept of ‘unity’ should also be there. A manager can be successful in controlling by uniting the ideas of the men around him. This inter-action is the psychological aspect of control. The control system should be acceptable to the persons being controlled.
(4) The Principle of Exception:
Management control also emphasises on exception principle. The exception principle holds that the manager should devote greater attention to the strategic points of unusual time. Optimum control can be achieved only if critical points can be identified and a close attention is paid to them. Good control does not necessarily mean maximum control. Control has been considered as expensive. Therefore, principle of exception has been considered as important.
Controlling – Objectives: Adjustments in Operations, Policy Verification, Managerial Responsibility, Psychological Pressure and a Few Others
Organizations try to achieve their objectives through various actions. From this point of view, all the actions lead to the achievement of organizational objectives. However, the organizations must also monitor whether they are achieving their objectives or not. Thus, control is an integrated action of an organization or manager.
It offers help in the following directions:
Objective # 1. Adjustments in Operations:
A control system acts as an adjustment in organizational operations. Every organization has certain objectives to achieve which become the basis for control. It is not sufficient merely to have objectives but also to ensure that these objectives are being achieved by various functions. Control provides this clue by finding out whether plans are being observed and suitable progress towards the objectives is being made, and action, if necessary, to correct any deviation. This may result in taking actions more suitable for the achievement of organizational objectives.
Objective # 2. Policy Verification:
Various policies in the organization generate the need for control. For organizational functioning, managers set certain policies and other planning elements which later become the basis and reason for control. They become basis in the sense that organizational performance is reviewed in these lights. They also become the reason for control because through these, an organization tries that its various individuals adhere to such framework. In this process, the organization and its management can verify the quality of various policies.
Objective # 3. Managerial Responsibility:
In every organization, managerial responsibility is created through assignment of activities to various individuals. This process starts at the top level and goes to the lower levels. However, when a manager as a superior assigns some activities to his subordinates, he remains accountable for the performance of total portion of the activities. It is quite natural that when a person is responsible for the performance of his subordinates, he must exercise some control over them. Thus, the control is required because of the very basic nature of the organization itself.
Objective # 4. Psychological Pressure:
Controlling process puts psychological pressure on the individuals for better performance. The performance of the individuals is evaluated in the light of achievement of targets set for them. A person is likely to put better performance if he is aware that his performance will be evaluated. He may feel pressure to achieve the results according to the standards fixed for him. Since reward for performance is based on the achievement of performance results which are measured by controlling, it puts pressure on individuals to contribute to their maximum ability.
Objective # 5. Coordination in Action:
Though coordination is the essence of management and is achieved through the proper performance of all managerial functions, controlling affects this aspect significantly. In organizations, control systems are designed in such a way that they focus not only on the responsibility of a manager for performing assigned activities but also on his accountability to achieve desired results.
This forces the manager to coordinate the activities of his subordinates in such a way that each of them contributes positively towards the objectives of the superior. Since this is followed throughout the organization, coordination is achieved in the organization as a whole.
Objective # 6. Organizational Efficiency and Effectiveness:
Proper controlling ensures organizational efficiency and effectiveness. Efficiency is achieved when the desired outputs have been produced with least possible cost. Controlling involves cost control too to ensure least cost of production. Effectiveness emerges when the desired objectives are achieved. Controlling puts focus on achieving objectives as standards against which actual performance results are measured are derived from the objectives.
Controlling – Types of Control Systems
Control systems differ according to the following:
1. Their location within an organisation,
2. Their orientation in time and
3. The management function.
A major difference between control systems depends upon whether the control is located in a separate authority within an organisation (centralised control) or whether responsibility for control is widely dispersed throughout the organisation (decentralised control).
Centralised control exercises power along the lines outlined by Weber. It emphasises a hierarchical structure, rules, procedures and the uniformity of their application. Everything is well defined and standardised. Control resides in a formally constituted authority such as quality control or inspectors.
Centralised control shares its philosophy with McGregor’s Theory X – employees cannot be trusted and they will do things wrong unless they are closely supervised. However, employees can be channeled into doing things correctly using a mixture of threats (e.g. dismissal) and extrinsic rewards (e.g. wages or promotion). Organisations using bureaucratic control tend to be rigid and produce high volumes of standardised products or services. Centralised control is sometimes called “bureaucratic” or “extrinsic” control.
Decentralised control has a more organic approach. It uses trust and shared values to guide the behaviour of employees. Power is dispersed throughout the organisation. It shares its philosophy with McGregor’s Theory Y – employees want to do things right and can be trusted to monitor their own work. Organisations using decentralised control tend to be flexible, adaptive and produce one-off “creative” products or services.
Decentralised control is sometimes called “intrinsic” or “organic” control. Authors such as Ouchi (1980) and Robbins and Decenzo (2003) refer to decentralised control as “Clan Control” because control is exercised by the group rather than an external authority.
Comparison of Centralised and Decentralised Control:
i. Organisational Structure – Top down, formal, many levels, rigid, distrusting
ii. Control Mechanisms – Rules and procedures that are systematically enforced
iii. Enforcement – Quality control, inspectors and auditors
iv. Rewards – Extrinsic (e.g. pay, security, status, etc.)
v. Outputs – High-volume, standardised, mature products and services
vi. Environment – Stable or slow changing
i. Organisational Structure – Egalitarian, informal, flat, flexible, trusting
ii. Control Mechanisms – Socialisation, norms, values and self-control
iii. Enforcement – Teams in which everyone monitors quality- especially their own work
iv. Rewards – Intrinsic (e.g. pride, satisfaction, work interest, self-development, etc.)
v. Outputs – Small batch, novel or creative or individual products and services
vi. Environment – Volatile or quick changing
Few organisations are pure examples of either centralised or decentralised control- most occupy intermediate positions. However, the modern trend is to move away from centralised towards decentralised control. Decentralised control is a component of empowerment which means giving junior employees the ability to control their activities, take decisions within prescribed limits and assume responsibility for their actions.
Control systems are frequently classified according to their timing and are divided into feed-forward control, concurrent control and feedback control. Most organisations use a combination of all three types.
Feed-forward Control anticipates problems and controls the resources an organisation puts into the transformation process. It attempts to prevent deviations from performance standards before they occur. Generally, this means specifying the correct standards for inputs and then examining them to check that they meet those standards.
The exact nature of feed-forward controls will depend upon the nature of the resource being input. For example, manufacturers of Blackberry palm computers will set a high specification for computer chips in order that the chips will perform the required functions reliably over a long period of time. They will then carefully inspect the chips from suppliers to ensure that they meet the specifications.
Similarly, top-notch consultancy practices will attempt to control the quality of their future employees by recruiting people with high qualifications from prestigious universities and colleges. Another example of feed forward control is the screening of potential borrowers by credit agencies to eliminate those who are likely to default on repayments. Feed-forward control is sometimes called “preliminary” control or “preventative” control. Unfortunately, it is impossible to anticipate all the problems, so concurrent control and feedback control may be needed.
Concurrent control takes place at the same time as resources are transformed. Faults are never given the chance to “build up”, and produce waste. A major feature of concurrent control is constant monitoring of the work process. Concurrent control is particularly important in continuous process industries such as refining oil.
Instruments constantly measure the process and make adjustments if anything is going wrong. Instruments also alert a human being when any major deviation from standards occurs. Another example of concurrent control is satellite tracking of an organisation’s fleet of lorries to establish their progress at all times.
Concurrent control occurs in many other situations – especially when a supervisor (sometimes called an “overlooker”) works in the same room. The overlooker watches employees at work and, should something go wrong, takes immediate corrective action by steering and guiding the employee. Concurrent controls are sometimes called “steering” controls.
Feedback control evaluates products or services after they have been transformed. It focuses upon the end results. The archetypal form of feedback control is when a batch of completed work is sent to a quality-control department, where an inspector checks each item and rejects any that are faulty. Faulty work is then returned to the operative for appropriate rectification or, if this is not possible, the faulty item is scrapped.
Feedback control takes many forms. For example, many retail organisations employ “mystery shoppers” who make purchases while posing as members of the general public. They complete a report form on the shop and the service received. The report is then logged and sent to the shop manager and the shop assistant. Other organisations use satisfaction surveys. For example, most colleges and universities use questionnaires at the end of a course to gather data on student satisfaction.
Financial reports are also a form of feedback control since they give information on, say, a completed financial year. Feedback control has two big advantages. First, it enables managers to compare actual outcomes with their plans. Hence, it gives useful information on the efficiency of the planning process and allows plans to be improved. Second, it gives employees clear information about how well they are performing.
This information may be a powerful source of motivation. However, feedback control has one very major disadvantage – by the time faults have been detected a great deal of damage may have been done and corrective action may be very costly or impossible. A system that relies exclusively upon feedback control will produce a great deal of waste. Sometimes feedback control is called “post” control.
Although the principles of control remain constant they are applied in different ways by different management functions.
For example, the purchasing function of an organisation will have specialised methods for ensuring the quality of its inputs. In some sectors of the manufacturing industry, such as metal refining, this will involve high-tech equipment and specialists who scientifically test the composition of the ores they use.
Most organisations will also have some form of inventory control which aims to minimise the cost of maintaining large stocks of supplies. Some organisations, such as a large supermarket, will operate a system of inventory control using economic order quantities. They calculate the optimal size of an order in terms of transport and storage costs. They will then set a minimum level of stock and when the actual level of stock reaches this minimum level a new batch of items will be ordered.
Because purchases are scanned at checkout, the processes can be automated so that a computer can generate the order which is sent to the supplier. The Argos chain of stores in the UK provides an excellent example of inventory control. Each store holds only a handful of each item in the catalogue – the exact number is determined by the previous buying patterns of its customers.
As soon as an item is sold, a computerised system registers the sale and a replacement is immediately requisitioned from the warehouse. Perhaps the ultimate form of inventory control is just-in-time scheduling (JIT). These systems, pioneered by Japanese industry, aim to use feed-forward control so that the need for an item is anticipated and an order placed so that the item will arrive “just-in-time” to be used. Just-in-time scheduling needs very careful planning and implementation but it can reduce stocks almost to zero, saving considerable amounts of money.
Production functions usually have highly developed control systems that use both concurrent control and feedback control. In some sectors such as the pharmaceutical industry the control will involve high-tech methods where samples taken at each stage of the manufacturing process are subject to analysis in the laboratory. Even in less high-tech contexts the production function will carefully check its output. Techniques such as Total Quality Management (TQM), Statistical Process Control (SPQ) and Quality Circles are common components of control systems in manufacturing operations.
The Human Resource Function has a distinctive set of controls to ensure that people meet performance standards. They may include feed-forward controls which specify the qualifications and licences that people in certain posts must possess. They include concurrent controls such as arrangements for supervision. The Human Resource Function will also control people’s work behaviour through a system of appraisal and reward. Perhaps the final example of control systems concerning people will be disciplinary procedures that will aim to correct major deviations from expected performance.
Sales Function use obvious controls such as sales turnover per month. They may also measure the profitability of sales. However, monitoring the performance of sales representatives presents particular problems- they operate away from the organisation and it is not easy to supervise their work. Control of sales staff is made even more difficult because of the high turnover.
A sales representative can make all kinds of exaggerated claims to close a sale, collect the commission and then quit before the consequences of her or his technique come home to roost. In the 1990s many UK insurance companies failed to exercise adequate control over their sales staff. As a result many members of the public were sold inappropriate insurance policies. When this was discovered, the insurance companies were required to compensate victims to the tune of £2 billion.
Financial functions are particularly keen on controls to reduce levels of fraud, theft or misappropriation of money. They establish comprehensive accounts which can be audited. The finance function will also control spending commitments to ensure that the organisation does not spend more money than it can afford. Furthermore, the finance function will produce financial reports which management can use to control an organisation’s financial health. Such reports use indices such as value added per employee, gross profit margin, return on equity and economic value added.
Controlling – Techniques: Traditional and Modern Techniques (With Formulas)
Modern business enterprises use a large number of techniques of managerial control.
These may be grouped into two categories as follows:
1. Traditional or Conventional techniques such as personal observation, statistical reports, break-even analysis, standard costing, budgetary control, etc.
2. Modern or contemporary techniques such as Management Audit, PERT, CPM and Management Information System.
i. Personal Observation:
This is the oldest method of controlling under which the manager observes the performance of his subordinates. Thus, he is enabled to get quick information about what is happening. Personal observation creates a psychological pressure on the employees to work properly and avoid wastage of time and material. However, personal observation has limited applicability. A manager can’t observe all the employees simultaneously and he may not have sufficient time for personal observation.
Statistical data are widely used for the purpose of managerial control. Statistical data may be presented in the form of statistical tables, graphical charts or special reports. The quality of presentation of essential data will determine their efficiency for the purpose of managerial control.
A report is a form of systematic presentation of information and statistical data relating to some aspect of business. It may arise out of available factual data, thorough enquiry, investigation or experiment. The information provided by the report may be used for the purpose of managerial control. It will help in knowing whether the policies of the management are being followed and if not, what steps should be taken to implement them.
The task of making reports is generally entrusted to certain specialists who will collect the desired information and present the same in the form of a report.
Responsibility accounting is a system of accounting in which costs and revenues are identified with persons assigned to their control rather than with products or functions. It classifies costs and revenue according to the responsibility centres that are responsible for incurring the cost and generating the revenues. It also classifies the cost assigned to each responsibility centre according to whether they are controllable or non-controllable.
Controllable costs are classified by items. The aim is to show the results of operation by each section or division having control over resources and their use.
A responsibility centre is an organisational unit such as division, department or section headed by a manager who is responsible for specified targets. There are four types of responsibility centres, namely, cost centre, revenue centre, profit centre and investment centre. In a cost centre, financial performance is measured, by the degree to which assigned tasks are accomplished within the budgeted amount of expense.
In a revenue centre, financial performance is measured by the success in achieving budgeted levels of sales revenue. In a profit centre, financial performance is measured by comparing actual profits with budgeted profits. In an investment centre, the manager is held responsible for the effective use of capital or for the budgeted return on investment.
Break-even analysis is concerned with the effect which changes in fixed costs, variable costs, sales volume, sales prices and sales mix will have on profits. In other words, it establishes relationship between costs of production, volume of production, profits and sales. This analysis helps in determining the volume of sales at which total cost will be fully covered and beyond which profits will accrue. The volume of sale at which there is no profit or loss is known ‘break-even point’.
The break-even point can be calculated with the help of the following formula:
For example, a company producing electronic toys wants to ascertain the break-even points. It has the annual fixed cost of two lac rupees, a variable cost of Rs. 6 per unit and sale price per unit of Rs. 10.
The break-even point can be calculated as follows:
Break-even point can also be shown by a chart as in figure. The shaded area represents profits which start accruing once the break-even point is crossed.
In this figure, break-even point has been shown at 50,000 units where total cost and revenue both are equal. It is a point of no profit and no loss. The spread to the right of this point (shaded area in the figure) represents the profit potential and the spread to the left presents the loss potential. Break-even analysis can help the management to know the minimum volume of sales it should aim at to avoid losses.
Rate of return on investment (ROI) is regarded as a useful technique of control to evaluate the success of a business enterprise. It determines the ratio of earnings of the enterprise to its investment. That is why, it is also called return on capital employed. The essence of this approach is that profit is not taken as an absolute figure, but is considered in relation to the invested capital. This helps in comparing the rate of return of two companies whose profit figures and capital investment are different.
Rate of return on investment can be calculated by the following formula:
ROI = E/ I
where E stands for net earnings and I stands for investment (i.e., capital and free reserves).
The advantages of ROI are as follows:
(a) It focuses attention on profits and relates them to the most important stake in the company, i.e., capital invested. It indicates how effectively they are employed.
(b) Rate of return on investment is useful to compare the performance of a company over the years. It also helps in comparing performance of different divisions, products and also different companies.
(c) It helps in locating areas where capital is being fruitfully utilised and in planning future operations accordingly.
i. Programme Evaluation and Review Technique (PERT):
PERT is a basic network technique which includes planning, monitoring and controlling of project. In addition to its use in schedule planning and control, the network concept in PERT provides the framework for treating a wide range of project management problems.
The steps in PERT are as follows:
(a) Identify the component activities that must be performed.
(b) Show the sequencing of the component activities in a network.
(c) Perform an analysis of the time required to complete individual activities and the entire project.
(d) Improve upon the initial plan through modifications.
(e) Control the project.
PERT is used in construction of ships, buildings and highways, in the planning and launching of new products, in the publication of books, in the installation and debugging of computer systems. Frequently, PERT systems are used in conjunction with computers. A computer programme is employed that permits calculations to be made without reference to a flow chart or diagram.
CPM is applied in those projects where activity timings are relatively well-known. It is used for planning and controlling the most logical sequence of activities for accomplishing a project.
Critical Path Method is basically a technique of project management, which is useful in planning, scheduling and control. The planning of any project involves the listing of various jobs that have to be performed to complete the venture. Requirements of men, materials and equipment are drawn up along with the estimates of costs and durations for the various jobs, in the process of planning.
Scheduling is the arrangement of the actual jobs of the project in order of time in which they have to be performed. Estimation of human resources and materials required at each stage of production is made along with the expected completion time of each job. The process of control commences with comparison of the difference between schedules and actual performance, once the project has begun. The analysis of the differences and the remedial action taken is the essence of control.
Management audit may be defined as a comprehensive and constructive review of the performance of management team of any organisation. It is an important aid for evaluation of management techniques and performance. It undertakes a systematic search of the effectiveness and efficiency of the management. It investigates formally and in depth the performance of management as contrasted with day-to-day informal impressions.
Management performs many functions like planning, organising, staffing, fating and controlling. The chief objective of management audit is to see whether these functions are being performed efficiently or not. Management audit locates deficiencies in the performance of various functions and suggests possible improvements. This will help the management in managing the operations of the enterprise in a more efficient manner.
Management Information System (MIS) is a system designed to supply information required for effective management of an organisation. An organization is managed by taking various decisions at the various levels of its management hierarchy. Information is needed to take these decisions. Quality of decisions will largely depend upon the nature and type of information provided for taking the decisions.
Therefore, designing of an effective information system is vital for the efficient working of an organisation. It is built around electronic computers in case of big organisations. Management Information System is vital to supply information required for effective management of the organisation.
A modern enterprise is managed by means of a variety of its hierarchy. A wide range of information is needed to make such decisions. Quality of decisions will largely depend on the nature and quality of information provided for making the decisions. Thus, installation of an efficient management information system is vital for the effective functioning of an organisation.
Controlling – Interdependence between Planning and Control
There is a deep relationship between the controlling and planning functions of management. Showing the importance of their relationship it is generally said that Planning is meaningless without control and control is blind without Planning.
Both the aspects of the interdependence of planning and control have been detailed below:
(i) Planning is Meaningless without Controlling:
In the first part of interdependence between planning and control it has been said that planning can be successful only in the presence of control. It means that if the control is not present it is useless to have planning. Under the process of planning future activities are determined beforehand. It is decided as to what is to be done, how it is to be done and by whom it is to be done.
In reality all these questions determine the standards for future activities and their aim is that the actual work performance should be in accordance with those standards. Bui how it should be ascertained that to what extent the plans are successful or have been successful. The reply to this question can be obtained only by implementing the control system. Under the control system the actual work performance is compared with standards and in case of unfavourable results corrective action is taken.
If the process of control is taken away from management no person working in the enterprise will take it seriously to work according to the plans and consequently, the plans will fail.
The importance of control in planning is also reflected in the fact that the plans are based on anticipation which are about uncertain future. Hence, a mistake can happen. Through the medium of control the information about these mistakes is obtained in time and the success of plans is ensured by introducing changes in the plans.
Apart from this, control gives the managers information about those fields where planning is needed and so far there has been no planning.
The above facts make it clear that the success of planning depends on control.
(ii) Controlling is Blind without Planning:
Under the system of control actual work performance is compared with the standards. Hence, if the standards are not determined there is no justification left for control, and the standards are determined under planning. It is, therefore, said that control is blind without planning or it is without any base.
Not only this, it is made clear under planning how the determined standards can be achieved or arrangement for necessary resources and facilities is made. After having provided these resources and facilities, no employee can complain, in case of unfavourable results, that he had not been provided with a certain resource or certain facility. In this way through the medium of planning the work of control can easily be accomplished.
Apart from this, it is essential to make plans for taking corrective action to eliminate the deviations detected through the process of control. It means what is to be done by way of corrective action, when it is to be done, how it is to be done and by whom it is to be done.
On the basis of the above facts it can be said that control is blind without planning. It means that it cannot observe what is happening and with which it should be compared, how the deviations should be found out and thus there is no question of any corrective action.
In conclusion, we can say that both the planning and control are very intimately connected and both are incomplete without each other.
Controlling – 10 Essentials of a Good Control System
The following are the essentials of a good control system:
Feedback is the process of adjusting future action based upon information about past performance. The idea of feedback is to make the control instantaneous. Feedback is based upon inter-dependence of different parts of a system. A manager responsible for control needs a continuous flow of information relating to actual performance so that deviations are promptly detected and corrected.
Information which flows back to the manager for this purpose is feedback. In every organization, information may be feedback informally or formally. Informal feedback is through personal contact, informal discussions and personal observation. Financial statements, reports, statistical analysis, and other written communications furnish examples of formal feedback.
2. Control should be Objective:
Controlling is exercised keeping the achievement of goals or objectives at the centre. A control system is a powerful means to obtain the results expected by management. Such result may be higher level of efficiency of the employees, better performance both in quantitative and qualitative terms, smooth flow of work, discipline and high employee morale.
3. Prompt Reporting of Deviations:
Control system should be devised so as to direct deviations before they actually occur. Manager should be provided with information as soon as possible so he can adopt proper control measures to correct such deviations.
4. Forward Looking Control:
Ideal control is instantaneous, self-correcting and forward-looking in the sense that it should be directed towards future. Information regarding deviations be collected and evaluated quickly in order to take corrective actions. Controlling always looks to future so that follow-up can be made whenever required.
5. Flexible Control:
The control system should have the flexibility to adjust itself to the changing requirements of the organization. The internal and external conditions in business are ever-changing so control system should remain workable under dynamic business conditions.
6. Organizational Suitability:
The control system should be designed to suit the requirements and needs of the activity. Each managerial position should be provided with adequate authority to exercise self- control and take corrective actions. Flow of control information should be consistent with organization structure employed.
7. Control should be Economical:
A control system should be economical in the sense that the cost of its installation and maintenance should be justified by its benefits. Simply stated, the cost of operation of the control system should be within limits. Through cost-benefit analysis, it should be ensured that the benefits of the system outweigh its cost. In short, control must worth its cost. An elaborate control system may sometimes have to be discarded because cost and benefit considerations do not warrant its installation.
8. Strategic Point Control:
Deviations cannot be eliminated altogether. However, all deviations are not of equal importance and do not require same account of attention. It is thus one of the essential requirements of an effective control system to highlight the critical or limiting points that deserve close management attention for appraisal and adjustments. Thus, efficient control system discriminates between important and unimportant factors and makes the system more effective and less costly.
9. Control should be Simple to Understand:
Those who administer control should understand it. While launching a system of control, management should take into account the present qualifications and abilities of executives and also their potential abilities to be developed soon. The control system must be simple and understandable to the higher level as well as lower level managers.
It is further to be noted that any such control technique should be properly understood by all those who have to manage it. Mathematical formulae, complex charts and detailed statistical summaries, though very useful, may fail to prove as effective control devices if their meaning is not properly communicated to the executives who have to use them.
10. Control should Suggest Corrective Action:
An essential requirement of the effective control system is that it should not merely indicate deviations but also suggest corrective actions promptly. Merely, recording of deviations and errors and fixing responsibility for their occurrence is not sufficient in fact it should follow suitable actions to prevent its further occurrence.
11. Worker-Focused Control:
Modern control system is worker-focused rather than work or job oriented. Control is affected by people who handle material resources for producing certain work results. If any corrective action is called for, then persons accountable for results are to be located.
Research studies have proved that because of greater freedom allowed and special interest shown by it in the people worker-focused control is generally associated with higher productivity.
Controlling – 9 Measures to Overcome the Peoples’ Resistance to Controls
Various measures have been suggested to overcome the peoples’ resistance to controls and important among them are as follows:
(1) Control system should be flexible, realistic and without being irrational. It should make allowance for general human behaviour.
(2) Controls should be built into organisational goals, activities, processes, roles and responsibilities of people. They should be administered in an informal, indirect, selective and subtle manner.
(3) Managers should adopt a suggestive, facilitative and reformative type of approach rather than a fault-finding and punishment oriented approach in administering controls.
(4) It is very essential that the communications system should be strengthened at all levels to smoothen the control function. Bottlenecks and break-downs in the communication system have to be avoided and attended to promptly, especially at the stage of feedback of performance results.
(5) More emphasis is given to Self Control and Self-direction of people. Opportunities may be provided to people to learn how to direct and regulate their own functioning in accordance with certain norms and guidelines.
(6) It will be more effective if there is decentralisation and democratisation of control system in their implementation, design and reviews.
(7) Conformity may be emphasised for the sake of consistency and order but not at the cost of creativity and initiative. Controls should not serve to suppress the genuine aspirations of people for self-expressions and development of talents.
(8) All suitable facilities be provided for developing and updating their skills, so that they may meet confidently the performance standards of the organisation.
(9) If possible the reward system should be properly integrated with the content system so that people may feel motivated to accept the control system.
Controlling – Dangers and Limitations
Control processes are a vital part of good management. However, they have their dangers, which should be minimised when designing and implementing any control system. The main dangers are the elimination of good fortune, cost, rigidity, distortion of the organisation and ethical issues.
Controls are used to ensure that plans are properly implemented. However, plans are the products of people’s minds and it is not possible for people to anticipate all eventualities. Hence, from time to time, managers will encounter favourable situations produced by good fortune (serendipity). If they are working in an organisational climate which has strict and rigid controls, there is a danger that they will eliminate such possibilities or ignore opportunities given by serendipity.
For example, a strict control system would have prevented Alexander Fleming from discovering penicillin. Modern quality assurance procedures would have made certain that the laboratory conformed to a sterile environment. No windows would have been allowed to be open. Consequently, dust containing the penicillin fungus would not have been allowed to contaminate the agar jelly lying around in a Petri dish – indeed an open Petri dish would have been disallowed in any modern laboratory with half-decent controls.
Furthermore, had Fleming been subject to management controls to enforce a production rate of experimental results, he would not have had the time to ponder the significance of a momentous chance event. In a similar vein many universities have instigated draconian controls over the content of lecture courses. The time and effort needed to obtain consent to deviate from an “approved syllabus” inhibits teachers from making changes in response to contemporary events. Eliminating serendipity has greatest consequences when an organisation’s mission involves some kind of creativity.
A control system should save more than its own costs. While this principle seems obvious, in practice it is very easy to break. For example, some financial systems try to control fraud by insisting that expenditures greater than £10 are ordered via a central purchasing system. Naturally, such controls are favoured by people in purchasing departments – it ensures their future employment. However, since the labour costs of processing an order via the central system is £17, this control does not make sense for orders under, say, £20.
Control systems may be appropriate when they are first installed. However, as the internal and external environment continues to change, control systems become less aligned with organisational needs. The tendency for control systems to stay the same over long periods inhibits organisational change.
Control systems are designed, on purpose, to alter people’s behaviour. This would not create problems if all aspects of organisational activity were covered by control systems of equal merit. However, this is rarely the case. Some activities, usually the shorter-term quantitative activities, will be covered by robust controls while other activities will have either poor controls or none at all.
This results in people being motivated to perform only those areas with visible controls. The control systems therefore distort the behaviour of employees. For example, where sales volume is the only area with controls, sales staff will concentrate only upon achieving high sales figures at the expense of profitability. They may then forsake activities known as “organisational citizenship” which includes training colleagues and public relations activities to promote the organisation in general.
In universities and colleges there are highly visible control data for research activities (i.e. the number of published papers). Similar data for teaching activities are subjective and harder to collect. Consequently, in some situations there is a tendency for staff to focus upon research to the detriment of teaching. Strict control systems can result in competitive organisations where there is a great deal of stress and tension.
However, it is important to note here that control systems often raise ethical issues – especially issues of privacy and freedom. For example, some organisations may wish to control the quality of their workforce by requiring all members of staff to be tested for drug use. Other organisations may wish to control the level of theft by insisting that all bags and purses are inspected by security staff when employees leave the premises. Other organisations monitor staff using closed circuit television.
Finally, some organisations check emails using work computers. The ethical issues involved are very complex. At a minimum, control systems that invade privacy should be explained to potential recruits at the time they make an application. Surveillance by closed-circuit television should be in the full knowledge of everyone who is observed. It must not be used where decency would be infringed (i.e. toilets and changing rooms). While the courts have upheld the rights of employers to inspect all emails sent from work computers, employees should be made aware of the practice when they apply.
Controlling, however, is not always’ on the credit side of the ledger. An enterprise has very little control over external influences. Employees, too, do not like to be watched from closed quarters and offer resistance when the regulations are too tight and rigid. Setting control points over important areas is not easy. It is expensive, takes lot of time and effort on the part of managers.
After all such difficult exercises, to compound the problems further, the evaluation process throws in additional challenges. Certain areas can be measured precisely. But many areas, unfortunately, defy measurement in quantitative terms. For example human behaviour, employee morale and job satisfaction etc. are difficult to measure. While establishing the control points, management has to pay attention to these problems, and proceed in a cautious way without rubbing individuals on the wrong side.
Controlling suffers from the following limitations:
(i) External Forces – An organisation cannot control the external factors such as – government policy, technological changes, fashion changes, etc.
(ii) Expensive – Control is an expensive process as it requires a lot of time and effort for the achievement of the organisational goals.
(iii) Difficulty in Setting Standards – Control system is effective when standards are defined in quantitative terms. Controlling fails when standards cannot be defined in quantitative terms like human behaviour, employee morale, etc.
(iv) Resistance from Employees – The effectiveness of control mainly depends on the acceptance of subordinates in the organisation. They may resist control because they may feel restrictions on their freedom.
Controlling – Suggestions
Control is a very important aspect of managers’ work.
The following suggestions aim to provide useful guidance:
(a) Investigate the costs and benefits of controls carefully. Remember to include less obvious costs such as increased workplace tension. Eliminate those controls where the benefits do not exceed the costs by a clear margin.
(b) Examine the relationship between the organisation’s strategy and plans and the control system. Eliminate those controls which are linked to neither. Introduce new controls where major elements of the plan or strategy are currently unrepresented.
(c) Examine existing controls to determine whether they distort the balance of the organisation or if they could be manipulated with ease.
(d) Examine cases of failures that have occurred in the past. Consider what extra feed forward controls, concurrent controls or feedback controls will be needed to eliminate such failures in the future.
(e) Reprimands to employees who do not meet standards should-
i. Be immediate. Bad practice should not be given a time to establish itself.
ii. Be applied consistently each time standards are not met.
iii. Focus upon actions and behaviour rather than the person’s characteristics. They should emphasise the correct standards and behaviour rather than dwell upon incorrect and past behaviour. They should provide information which helps the person produce the correct actions.
iv. Be given in a supportive and friendly way.
Some organisations adopt a policy of progressive discipline whereby the strength of any reprimand depends upon the severity of the deviation from standards and its frequency. A minor deviation which is an infrequent occurrence would receive only a light reprimand whereas a minor deviation which is frequent receives a strong sanction. A major deviation from standards or a minor one which has occurred frequently in the past would attract a very strong reprimand.
(f) Adherence to standards should be recognised as actively as deviations from standards. People should be congratulated when they have achieved objectives as planned.
Above all, managers must remember that the vast majority of control systems cover less than 80 per cent of the performance of an employee. This 80 per cent of performance is unlikely to be measured with more than 70 per cent accuracy – especially if actual performance is gauged using subjective opinions of supervisors. It is therefore an arithmetical calculation that many control systems are, at best, about 56 per cent accurate!