Control

Simon’s theory of decision-making has been widely criticised. Simon does not acknowledge the importance that in decision making it is the role of intuition, tradition and faith in decision making. The Simon theory is criticized by the general as providing the framework and providing no detail to guide organizational planners. Using Simon’s actual-based administrative theory Simon’s approach will be much more meaningful when dealing in business administration than in public administration according to scholars.

Controlling is seeing that actual performance is guided towards expected performance. It is an important function of management and is related to all other management functions. All other management functions cannot be completed effectively without the performance of the control function. Control is a comparison and verification process and with the help of this process, a balance in the organisational activities directed towards predetermined goals can be achieved and maintained. It helps in taking corrective measures in case of deviation from the planned course of action.

According to Ernest Dale, “The modern concept of control envisages a system that not only provides a historical record of what has happened to the business as a whole but pinpoints the reasons why it has happened and provides data that enable the chief executive or the departmental head to take corrective steps if he finds he is on the wrong track” Koontz and O’Donnell have defined controlling as the measurement and correction of the performance of activities of subordinates to make sure that enterprise objectives and the plans devised to attain them are being accomplished. Thus, the managerial function of control implies measurement of actual performance, comparing it with the standards set by plans and correction of deviations to assure attainment of objectives according to plans.

Nature Of Control

Managerial control has the following characteristics: –

1. Control is a Function of Management

It is, in fact, a follow-up action to the other functions of management. This function is performed by all the managers in the organisation to control the activities assigned to them.

2. Control is a Dynamic Process

It involves continuous reviews of standards of performance and results in corrective action which may lead to changes in other functions of management.

3. Control is a Continuous Activity

It does not stop anywhere. According to Koontz and O’Donnell. “Just as the navigator or continually takes reading to ascertain whether he is relative to a planned action, so should be the business manager continually take reading to assure himself that his enterprise or department is on course.

4. Control is Forward Looking

It is related to the future as the past cannot be controlled. It is usually preventive as the presence of control systems leads to minimizing wastages, losses, and deviations from standards. It should be noted that control does not curtail the rights of individuals. It simply keeps a check on the performance of individuals.

5. Planning and Controlling are closely related to each other

According to Billy E. Goetz, “Managerial planning seeks consistent, integrated and articulated programme while managerial control seeks to compel events to conform to plans”. : As a matter of fact, planning is based on control and control is based on planning. The process of control uses certain standards for measuring performance which is laid down by planning. The control process, in turn, may reveal the deficiency of planning and may lead to the revision of planning. It may also lead to the setting of new goals, changing the organisational structure, improving staffing and making major changes in the techniques of directing.

6. The Essence of Control in Action

The performance of control is achieved only when corrective action is taken based on the feedback information. It is the only action that adjusts performance to predetermined standards whenever deviations occur. A good system of control facilitates timely action so that there is a minimum waste of time and energy.

Significance Of Controls

Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and principles established. It has for object to point out weaknesses and errors to rectify them and prevent a recurrence. It operates on everything, things, people, action. Control is an important function of management. Without control, a manager cannot do a complete job of managing. All other functions are the preparatory steps for getting the work done and control is concerned with making sure that there is proper execution of these functions. Control is necessary whenever a manager assigns duties and delegates authority to a subordinate. He must exercise control over the actions of his subordinates so that he can ensure that the delegated authority is being used properly.

The road signals at a busy road crossing appropriately illustrate the significance of control. Just as road signals are essential to ensure accident-free and smooth traffic management control devices are necessary for any organisation for its smooth functioning. By controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives. A good control system provides timely information to the manager which is very much useful for taking various operations. Control simplifies supervisions by pointing out the significant deviations from the standards of performance. It keeps the subordinates under check and brings discipline among them. It also enables the expansion of the span of supervision at various levels in the organisation.

Advantages of An Effective System of Control

The following are the advantages of an effective system of control:

Control provides the basis for future action. It will reduce the chances of mistakes being repeated in future by suggesting preventive steps.
Control facilitates decision making. The process of control is complete only when corrective measures are taken. This requires taking the right decision as to what type of follow up action is to be taken.
Control facilitates the decentralisation of authority. As the top executives get the feedback information constantly which helps them to ensure that the decisions taken at the lower levels are consistent with the policies of the enterprise and are in the interest of the enterprise.
Control and planning go hand in hand. Control is the only means to ensure that the plans are being implemented in a real sense. Control points out the shortcomings of not only planning but also other functions of management such as organising, staffing and directing.
The existence of a control system has a positive impact on the behaviour of the employees. They are cautious while performing their duties as they know that they are being observed by their superiors, Control helps in coordination of the activities of the various departments of the enterprise by providing them unity of direction.

Limitations Of Control

A control system may be faced with the following limitations:

World An enterprise cannot control external factors such as government policy, technological changes, fashion changes, etc.
Control is an expensive process because sufficient attention has to be paid to observe the performance of the subordinates. This requires the expenditure of a lot of time and effort.
Control system loses its effectiveness when standards of performance cannot be defined in quantitative terms. For instance, it is very difficult to measure human behaviour and employee morale.
The effectiveness of control mainly depends on the acceptance of subordinates. They may resist control because they may feel that it will reduce or curtail their freedom. Control also loses its significance when it is not possible to fix the accountability of the subordinates.

Scope Of Managerial Control

The scope of managerial control is very wide. It virtually covers all the areas of business, namely, policies, procedures, men, money, machines and equipment, public relations, human relations research and development and so on. Generally, control is exercised by the concentration of key areas of business on which the success of the business depends. It is known as `key-point control. The key points vary from enterprise to enterprise.

Control may be (i) physical, and (ii) financial.

Physical control may be either quantitative or qualitative. They are exercised by personal supervision and checking. Either the entire lot or the sample is compared with the standards. financial control is exercised through budgetary’ control and cost accounting control.

Standards Of Performance

A standard is a criterion against which the performance of the individual is measured. The standard should be based on scientific analysis and should not be subjective in nature. They should possess the following characteristics :

The standard should be capable of achievement with a reasonable amount of effort and time. Standards should concentrate on results and not the procedures.
Standards should not be rigid. They should be capable of being changed whenever the need arises.
As far as possible standard should be expressed in quantitative terms and should be based on the result of work measurement carried with the help of time and motion studies
Standards should be consistent with the overall organisation objectives.
Standards may be expressed in physical terms or monetary terms.
Physical standards are generally applied at the operative levels where the quantity and quality of production are to be controlled.
Monetary standards are expressed in terms of costs and revenues.

Steps In The Control Process

To perform his control functions, a manager follows three basic steps. First of all, he establishes the standards of performance to ensure that performance is in accordance with the plan. After this, the manager will appraise the performance and compare it with a predetermined standard. This step will lead the manager to know whether the performance has come up to the expected standard or if there is any deviation. If the standards are not being met, the manager will take corrective actions which is the final step in controlling as shown in the figure. A detailed discussion of these steps is given below.

The Control Process

1. Establishing Standards

A standard acts as a reference line or basis for the comparison of actual performance. Standards should be set precisely and preferably in quantitative terms. It should be noted that setting standards is also closely linked with and is an integral part of the planning process. Different standards of performance are set up for various operations at the planning stage which serves as the basis of any control system. The establishment of standards in terms of quantity, quality or time is necessary for effective control because it is essential to determine how the performance is going to be appraised. Standards should be accurate, precise, acceptable and workable. Standards should be flexible, i.e., capable of being changed when the circumstances require so.

Different types of standards are used for measuring the performance of different operations. Many standards are of a physical nature, such as a number of units, manhours, etc. and other standards are expressed in monetary terms relating to sales, revenues, expenses; costs and so forth. In addition to these standards, there are also standards of an intangible it is essential to lay down qualitative factors which will determine where the standards are being met or not. AVIAN

2. Appraising Performance

This step involves measuring the actual performance of various individuals, groups or units and then comparing it with the standards which have already been set up at the planning stage. The quantitative measurement should be done in cases where standards have been set in quantitative terms. In other cases, performance should be measured in terms of qualitative factors as in the case of the performance of the industrial relations manager. Comparison of performance with standards is comparatively easier when the standards are expressed in quantitative terms. The process of performance appraisal will reveal the deviations from the standards The appraisal should try to analyse the various deviations and investigate their causes. It is also important to establish a range of deviation beyond which the attention of top management is warranted. Only such cases should be reported up which pin-point exceptional situations. This is what is known as management by exception. To

3. Taking Corrective Action

The final step in the control process is taking corrective actions 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 necessitate reforming the process of selection and training of workers. thus, the control function may require a change in all other managerial functions. If the standards are found to be defective, they will be modified in light of the observations.

Requirements Of An Effective Control System

Following are the essential pre-requisites of an effective control system:

1. Emphasis On Objective: Before planning a control system, it is essential to know clearly the objectives of the organisation. The control system should aim at accomplishing the organisational objectives.

2. Suitability: Control should be tailored to fit the needs of the organisation. The flow of information concerning current performance should correspond with the organisational structure employed.

3. Flexibility: A good control system must keep pace with the continuously changing pattern of the dynamic business world. It should be adaptable to new developments including the failure of the control system itself.

4. Forward-Looking: The control system should be directed towards the future. It should report the deviation from the plans quickly in order to safeguard the future.

5. Objectivity: Standards of performance should, as far as possible, be objective and specific. They should be based on facts and participation so that control is acceptable and workable.

6. Economical: The systems of control must be worth their costs. They must justify the expenses involved. A control system is justifiable if the saving anticipated from it exceeds the expected costs on its working.

7. Strategic Point Control: Effective and efficient control can be achieved if critical, key or limiting points can be identified and close attention directed to adjustment at those points. This is expected costs on its working.

8. Corrective Actions: Merely pointing of deviations is not sufficient in a good control system. It must lead to taking the corrective action to check deviations from standards through appropriate planning, organising and directing.

Management By Exception

Management by exception is an important principle of organizational control put forward by the classical management writers. This principle holds that only significant deviation ( exceptions) from standards of performance should be brought to the management’s attention. If actual performance is according to the planned performance (i.e., standards already laid down), it need not be brought to the attention of the concerned manager as no follow-up action is necessary. But if there is a major deviation from the standard, it should be reported to the manager. For example, a manager establishes a quality control standard that says that five defects per 100 units produce are permissible. Under the management by exception principle only significant deviations from this standard – six or more defects per 100 units in this case –should be brought to the notice of the manager.

The exception principle has been devised to conserve managerial time, effort and talent and apply these in more important areas. It is a technique of separating important information from not-so-important information. Only such information which is critical for managerial control actions is sent to the management. This facilitates the installing of an effective control system.