Note on Process and Essentials of Effective Control

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Process of Controlling

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Control is a continuous process. It is an integral part of management. It is concerned with monitoring and evaluating performance so as to obtain the best results from managerial efforts. It ensures work accomplishment according to plans. It is also the process of guiding and supervising the events in the organization. The process of control consists of the following elements:

  1. Setting of control standards
  2. Measurement of performance
  3. Comparing actual and standard performance
  4. Taking corrective action

1. Setting of Control Standards
The first step in any control process is to set the control standards against actual performance so the results can be controlled. Standards represent the criteria against which actual performance is measured. The standard of control may be quantitative or qualitative. Here, the goals are converted into quantity, value, man hour etc. Controlling becomes easy through the establishment of these standards because controlling is exercised on the basis of these standards. The standards which are measured and expressed is known as measurable standards. They can be in the form of cost, output, expenditure, time, profit, etc.The achievement of various targets can make the specific persons responsible. The levels of achievement are also decided in advance. The Control standards should also be consistent with the organizational goals.

2. Measurement of Performance
After the establishment of standards, the next step is the measurement of actual performance. Finding out deviations becomes easy through measuring the actual performance. The measurement of Performance level is sometimes easy and sometimes difficult. The tangible standards can be measured in an easy way as it can be expressed in units, cost, money terms, etc. If the performance of manager has to be measured the quantitative measurement becomes difficult. The Performance of a manager cannot be measured in quantities. The measurement of qualitative performance such as human relations, employee morale, etc. can be done through psychological tests and surveys. The measurement of performance is an important part of the control process.

3. Comparing Actual and Standard Performance
The third step in control process is the comparison of actual performance with the standard set. It is very important to compare the actual performance with the planned targets. The deviation can be defined as the gap between actual performance and the planned targets. When things are going as per plans or within the allowable limits then top management is not required to take any note of it. But on the other hand, if performance is not up to the level then top management is brought the notice to take corrective action. If the manager gives attention to every deviation then he will not be able to give enough time for important things. The major deviations like replacement of machinery, an appointment of workers, quality of raw material, rates of profits, etc. should be looked upon consciously. Minor deviations have to be ignored.

4. Taking Corrective Action
The last step of controlling process is to take corrective action on the result of the comparison. The purpose of control is not only to analyze the deviation but also to initiate remedial measures to take corrective actions. After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. The corrective action generally involves top management. Some people who are taking corrective action is not a part of the control. It is a separate managerial function. The overlapping function of control shows the unity of manager’s job only. It shows that managing process should be integrated one. But, it is only through taking corrective measures, a manager can exercise controlling. (Venkatesh)

Essentials of Effective Control

(source:www.kullabs.com)
(source:www.kullabs.com)

Every successful organization must employ control systems. Control ensures that everything is going on properly and according to plans. There are a number of essentials or requirements of adequate control, which a manager must always keep in mind. The Effective control system has certain common characteristics. The importance of these characteristics varies with the situation. In general, the effective control systems have following characteristics.

1. Simple
The Control system that is not easily understood by the user has no value. So, the good control system should be easy, clear to understand and operate. The controlling techniques which are complicated such as complex mathematical formula, charts, graphs, an advanced statistical method should be avoided as far as possible because such techniques may fail to communicate the meaning.

2. Timeliness
The information of management should be in proper time so that corrective actions can be taken in time. There are many problems in the organization which requires immediate attention. If the information about such problems does not reach management in a right time, then such information may become useless and damage may occur. To get the corrective actions in proper time the information must also be in proper time. The outdated information and outdated controlling are like date-expired medicines which cannot give positive results.

3. Flexibility
It is important that controlling system should be flexible enough to keep pace with changing conditions of the business. The effective control system must be flexible enough to adjust to any adverse changing condition of the business. Flexibility in the control system can be introduced by preparing alternative plans.

4. Pointing out exceptions at crucial points
The control system points out deviations. But all deviations do not have equal impact. Therefore, an effective control system should direct attention on same critical impact. Only significant deviations from standards whether the positive or negative, require management's attention. The more the manager concentrates on exceptions, the more efficient will be the result of control.

5. Integration
The people work in harmony with organizational policies when the controls are consistent with corporate values and culture. So, they are easier to enforce. The control system has become an integrated part of the organizational environment. It has become effective in every organization.

6. Economic feasibility
The controlling system should be economical and worth its costs. The controlling system should be economical because the expensive controlling system gives over financial burden to the organization which may affect profit. For example, a high-security system to safeguard nuclear secrets may be justified but the safeguard of office supplies to the same system in a store would not be economically justified.

7. Motivation
Controlling is based on the performance of workers. A good system of controlling should be employee centered rather than work-centered. A good control system should pay due attention to the human factor. The purpose of control should be to prevent mistakes and not to punish until necessary. There must be direct contact between the controller to make the control system motivational.

9. Corrective action
A good control system should be able to take proper corrective actions to avoid the gap between standard and actual performance. It helps to improve future performance. An effective control system not only checks and identifies deviation, It also helps in programming the solutions and correcting such deviation.

10. Emphasis on exception
A good controlling system should work according to the principle so that the important deviations are brought to the attention of management. This will ensure the managerial attention to direct towards error and not towards conformity. This will help to eliminate unnecessary and uneconomic supervision. It also helps in beneficial reporting and the wastage of managerial time. (Smriti Chand)

Bibliography

Smriti Chand, Management. Your Article Library.com. Since 1998. Electronic. 15 06 2016. http://www.yourarticlelibrary.com/management/9-characteristics-of-an-effective-control-systems-explained/3511/

Venkatesh, Controlling. Your Article Library.com. Since 1998. Electronic. 15 06 2016. http://www.yourarticlelibrary.com/management/controlling/steps-involved-in-control-process/53348/

  1. Controlling  is concerned  with monitoring and evaluating performance so as to the best results of managerial efforts.
  2. Control ensures that everything is going on properly and according to plans.
  3. Effective controls generate accurate data and information.
  4. The objective  to apply control is the essential aspect of a business where a deviation from the expected standards will do the greatest harm.
  5. A good system of control should work on the exception principle so that only important deviations are brought to the attention of management,
.

Very Short Questions

1. Simple

A good control system should be easy and clear to understand and operate. Control system that is not easily understood by the users is of no value. The instruction should be unambiguous to follow. The controlling techniques which are complicated such as complex mathematical formula, charts, graphs, advanced statistical method should be as far as possible avoided because such techniques may fail to communicate the meaning.

2. Timeliness

The information of management should be get in proper time so that corrective actions can be taken in time. There are many problems in the organization which require immediate attention. If the information about such problems is not evaluated in  a right time, then such information may become useless and damage may occur. The means of information must be collected, processed, and evaluated quickly.

3. Flexibility
It is important that controlling system should be flexible enough to keep pace with changing conditions of the business. The effective control system must be flexible enough to adjust to any adverse changing conditions of the business. Flexibility in control system can be introduced by preparing alternative plans for varios solutions of problems.

4. Focus on strategic plan

An effective control system focus on those critical areas where deviations from standards are most likely to occur or would do the greatest damage. The control system should also concentrate on those areas where corrective action can be most effectively applied.

5. Integration

The people work in harmony with organizational policies when the controls are consistent with corporate values and culture. The control system has become an integrated part of the organizational environment. It has become effective in every organization.

6. Economic feasibility

The controlling system should be economical and worth its costs. The controlling system should be economical to operate. It should be easy to comprehend and apply by the concerned person. It should never be too costly in terms of both financial and human resources.

Setting of Control Standards
The first step in any control process is to set the control standards against actual performance so the results can be controlled. Standards represent the criteria against which actual performance is measured. The standard of control may be quantitative or qualitative. The standards which are measured and expressed is known as measurable standards. The standard must be achievable. The standard must be set up keeping in mind the resources of the organization and as far as possible standards must be set up in numerical or measurable terms. The achievement of various targets can make the specific persons responsible. The levels of achievement are also decided in advance. The Control standards should also be consistent with the organizational goals. 

Measurement of Performance
After the establishment of standards, the next step is the measurement of actual performance. Finding out deviations becomes easy through measuring the actual performance. The measurement of performance should be accurate and reliable with the standards. It should be clear, simple and objective. The tangible standards can be measured in an easy way as it can be expressed in units, cost, money terms, etc. If the performance of manager has to be measured the quantitative measurement becomes difficult. The Performance of a manager cannot be measured in quantities.The measurement of qualitative performance such as human relations, employee morale, etc. can be done through psychological tests and surveys. The Measurement of performance is an important part of the control process.

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