Chapter 13 - Control
B-Com Part 2 Management Notes
http://karachiboardnotes.blogspot.com/
Chapter 13 - Control
* Control
* Characteristics of control
* Importance of control
* Effective control system
Q.1. Define Control. Discuss the importance of Control in organizational system also explain the elements of control.
Meaning and Definitions of Control
Control is necessary function to make all other managerial functions effective. Its ensures that the corporate goals are achieved effectively and efficiently. Controlling is the process that the corporate goals are achieved effectively and efficiently. Controlling is the process by which management regulates that work activities according to designed plans, policies, procedures and programmes so as to ensure the accomplishment of the organizational resources and people in a direction leading to organizational goals.
some important definitions of control may be given as follows:
Henri Fayol
Control consists in verifying whether everything occurs in confirmatory with the plan adopted, the instruction issued and principles established. It has for object to point our weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything, things, people, action.
Theo Haimann and William Scott
Controlling is the process which check the performance against standards. It makes sure that organisation goals and objectives are being met.
Robert Anthony
Management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of an organisation's objective.
Weihrich and 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 being accomplished.
______________________________________
Q.2. Describe the characteristics, nature and feature of control.
Characteristic Or Features of Control
Controlling has the following important features, which clearly bring out its nature:
1. Control is a Continuous Process
Control is not a single step activity. Rather, it is a dynamic process that involves constant analysis of actual and planned performance and the resultant deviations as well as the revision of objectives, plans, policies, procedures, positions, incentives etc in the light of such deviations.
2. Purpose of Control is Positive
George Terry says, the function of controlling is positive - it is to make things happen, i.e. to achieve the goal within stated constraints, or by means of the planned activities. Controlling should never be viewed as being negative in character - as a hurdle in getting objectives won. Controlling is a managerial necessity and a help, not an impediment or a hindrance.
3. Controlling is a exercise at all levels in the Management Hierarchy
Control is a function of every manager, from Chairman and Managing Director to a supervisor, though it may vary in scope among managers. For example the top managers are concerned with administrative control, which is exercised through broad policies, plans and other directives. The middle level managers are concerned with the executor control for the purpose of getting the plans, policies, and programmes executed. At the lower level, supervisors exercise operational control to ensure successful performing of actual operations or production activities by their close monitoring.
4. Control Guides Behaviour of People and use of Resources and Facilities
Control guides the action and the behaviour of the people who are responsible for carrying out different activities or operation, and also guide the use by them of different organizational resources and facilities in order to effectively and efficient, contribute toward accomplishment objectives.
5. Control is mainly Forwarding Looking
Control mainly aims at the future because future is a head and past in gone. However, the experience about the criterion for future standards, but it may be noted that control may also be past control and current control. Thus it is not full correct to say that control is looking back.
6. Control Measures and Evaluate Performances
Controlling involves measurements of the actual results in order to facilitate other evaluation or comparison against the planned results. It also suggests guidelines for future course of action.
7. Control Facilities Coping with Environment
Effective controlling system foresees the likely changes in consumer preferences and demands and therefore guides the members of the organisation to modify the products or services to meet the anticipated needs and requirements of the consumers in the future market.
8. Control Closely Related to Planning
Planning is the basis of controlling. Control implies the existence of certain standards or yardsticks against which actual results are to be evaluated. Planning provides such standards, if there is no plan; it means that there is no basis for control. Planning sets the course of action and controlling monitors the operation or activities to follow such course of action. In fact, planning initiate the process of management and control completes this process. Without a plan control is blind because it does not know where to go and weather it is going on a right path or not. Control looks active in the company of a plan because then it seeks to compel events to confirm to the plan. Without a plan is handicapped. H.G. Licks comments, Planning is clearly a pre-requisite for controlling, it is utterly foolish to think that controlling could be accomplished without planning. Without planning there is no predetermined understanding of the desired performance. In fact planning without corresponding control is likely to be a hollow hope.
On the other hand, planning without control is not a reality. In the absence of a control system, best designed plans may go astray and thus will fail to reach their destination. Control ensures to the organizational activities and the functions on the right track and aligned with plans and goals. Standards for evaluation of performance are the beginning point of the control process. Controlling indicates the need for revision of plans in case the standards are not achievable or if the environment has changed. The information collected by the control system is also useful for planning in future. Without control planning will be a futile exercise remaining on the papers only. Control makes plans meaningful and effective, similarly controlling is effective only when it is specially tailored to plans.
Thus, it is correct to comment that planning is manning less without control and control is aimless without planning. Weihrich and Kortz comments, Planning and controlling may be viewed as the blades of a pair of scissors, the scissors cannot work unless there are two blades. Without plans and objectives, control is not possible because performance has to be measured against some established criteria. Similarly, without control, realization of plans is not possible be guided on the right path leading to the accomplishment of plans. This is why that Weihrich and Koontz has commented as follows. Planning and controlling are inseparable the Siamese twins of management. Any attempt to control without plans is meaningless, since there is no way for people to tell whether they are going where they want to go (the result of the tusk of control) unless they first know where they want to go (part of the task of planning). Plans thus furnish the standards of control. Thus, there is complete interdependence between planning and controlling.
____________________________
Q.3. Describe the Importance of Control.
Importance of Control
The major benefits of a good control system may enlisted as follow:
1. Stimulates Action
A good control system stimulates action by spotting the significant deviations from the original plan and by highlighting them for the people who set thing right i.e., who can take corrective action. Thus, it guides and keeps the organization's operations on the right back.
2. Facilities Decentralization and Coordination
Control encourages top management to delegate authority to subordinates throughout the organisation without completely losing their grip over it. In the context of predetermined goals, control keeps all activities and efforts within their specified limits and makes the operations to move towards organizational goals through coordinated efforts.
3. Facilities other Managerial Functions
Control and planning are closely related to each other. Control points out the deficiencies in plans and policies by verifying their quality and correctness. It helps to review, revise and update the plans and policies in order to cope with changes in the environment. By doing so, control also indicates the limitations and drawbacks of organizing staffing, motivation, leadership and decision-making.
4. Enhances Employee Morale
Control is vital to the strength and moral of company employees because it prevents the individuals form going astray from plans and thus prevents anarchy to develop. Employees do not like a situation that goes out control because in that case they may become victims to any within and cannot predict what will happen to them. Thus without control their morale may be lowered. The tremendous complexity of modern organisation and certain psychological dependencies of the employees on order and stability, make the control system a necessity.
5. Creates Psychological Pressure to Work
If there exists a sound control system in an organisation, employees have psychological pressure to work hard and perform well. Efficient control system provides order and discipline in activities and helps to minimize dishonest behaviour on the part of employees. Employees remain alert in their efforts.
6. Other Benefits
Several other benefits from good control system may be as follow:
- Control is necessary for the optimum use of organisation's scarce resources.
- It helps in organisation's growth and change
- It helps in forecasting and thus provides basis for future action.
- Control techniques like rules, procedures, budgets etc stand as effective guides to managers.
- In the absence of control, the plans will remain but mere pipedreams.
- Control helps in judging the accuracy of standards.
- In the area of their responsibility, if managers do not control events, they will be at the mercy of the events.
_________________________________
Q.4. Discuss the requirements of an effective control system.
Requirements of Effective Control System
A control system is a deliberate creation, not an automatic phenomenon. Through different organisations may design their control systems according to their unique and special characteristics or conditions, yet in designing a good and effective control system the following basic requirements must be kept in mind:
1. Focus on Objectives and Needs
The effective control system should emphasis attainment of organizational objectives and therefore it should be designed in accordance with practical needs of the enterprise. For example, the marketing department may use pre-controls for introduction of new products into the market, and current control for specific advertisements. Similarly, more sophisticated and broad ranging controls may be developed for production managers than for a shop floor supervisor. Thus, controls should be tailored to plans and positions.
2. Prompt Indicator
An ideal control system could detect and report significant deviation as promptly as possible so that necessary corrective action may be taken adequately in time. This needs an efficient system of appraisal and flow of information. Rapid reporting of variations of the core of control.
3. Forward Looking
Control should be future-oriented, marketing valuable forecasts to the managers so that they become aware of the problems likely to confront them in the future.
4. Understandable and Economical
Control tools and techniques adopted should be such as are clearly understandable by the managers. They must know all the details and critical points in the control device as well as its usefulness. If developed and complex statistical and mathematical techniques are adopted, then proper training should be imparted to the persons who are supposed to execute such control system. Besides the control system should be worth its costs. Expensive and elaborate control system will not suit, for example to small enterprise.
5. Control by Functions and Factor
Control should emphasis function, such as production, marketing, finance, human resources, etc it should also focus on four factors, quality, quantity, time use and costs. Not one but multiple controls should be adopted.
6. Strategic Points Control
Every detail or thing is not be controlled in order to save time, cost and effort. Certain strategic or vital points in the functioning of an enterprise must be identified and appropriate control devices should be designed and imposed at those stages. Thus, only critical, major deviations should be attended to and control should concentrate on exceptional problems only. Control should be selective and concentrate on key result areas of the company.
7. Flexible
It means that the control system should be able to accommodate such modifications or revisions as are made necessary in the wake of rapidly changing and complex organizational environment. Control must not become ends in themselves. They must be suited to the environment in which an organisation finds itself. Flexibility in control system is generally achieved by the use of alternative plans or flexible budgets.
8. Objective
To the maximum possible extent, controls, i.e., standards of performance should be objective (unbiased) and specific. For this purpose control measures should be verifiable or quantified. Standards should be determined based on facts and participation.
9. Indicative as well as Suggestive
Controls should not only be able to point to the deviations, but they should also suggest corrective action that is supposed to check the recurrence of variations or problems in future.
10. Correct Action at Correct Time
A significant test of the effectiveness of a control system is whether correct action is taken at correct time.
11. Attention to Human Factor or Emphasis on Self-Control Aspect
It is said that excess control causes corruption. Control system should be designed is such a way, as it does not arouse negative reactions among organizational people. Good controls are designed to develop positive feelings in the members by focusing on work and not on worker. It facilities creative action within properly laid down limits. The aim of control should be to create self-control among members. For this purpose, the tendency over the years has been toward such techniques as participative budgeting and human resources accounting.
____________________________________