Measures current performance and guides it towards some predetermined objectives
Measures : Checking progress against
plans/performance standards – operates on people, things, actions
The
essence of control is action – on the basis of information –
Henry Feyol‘-- verifying whether everything occurs in
conformity with the plan adopted, the instructions issued and the principles
established.’
Definitions:
Koont’z
and O’Donnell ‘control is measurement
and correction of the performance of
activities of subordinates in order to make
sure that enterprise objectives and plans devised to attain them are being
accomplished.’
Ernest
Dale: ‘Controlling is a system which not only provides
historical record of what has happened to
the business as a whole but also pinpoints the reasons
why it has happened and provides the data that enables chief executive or
departmental head to take corrective steps
if he is on the wrong path.’
George
R Terry ‘Controlling is determining what is being accomplished i.e. evaluating the performance if necessary applying corrective measures so that the performance takes
place according to plans’
Common elements:
Fundamental
function – a process
The
essence of control is action
– on the basis of information –
Operates
on people, things, actions
Measures
current performance
and checks if objectives and plans devised to attain are followed
Guides it towards some
predetermined objectives by Evaluating and giving
Correction / corrective steps / corrective measures
Checking
progress against
plans/performance standards
– Recording at the same time Reasons why it has happened – or not happened
Elements of Control System – in context of its
necessity
Authority
Knowledge
Guidance
– expert advice
Direction
– leading – authority for corrective solutions
Constrains
– limitations – considered for fair evaluation and corrective action
Restrains
- Keep under control; keep in check – for E & E
The Basic Control Process: key factors for success –
essentially same for different activities/departments
Establishment
of Standards: tangible, intangible –meaningful, clear– in terms of
Cost
[direct/indirect costs, labour costs, transportation cost] quality,
quantity,
Physical
[material used, labour employed, goods produced, - qualify with e.g.
hardness, tolerance, fastness of colour, durability]
Capital
[operating cost, RoI, Ratios, Size and Turnover of inventories, cash
receivables/payables, bonds to stock],
Revenue
[average sales, per customer/passenger/transaction/mile, competitors’
strengths]
Time,
programmes [new product, market survey, improving quality of sales
force]–
Intangibles
[competence, loyalty, alertness, enthusiasm, innovativeness] -
employee morale, discipline, public relations, image, goodwill – not
easily quantifiable –tailor their own std. Goals [to establish entire
network of variable qualitative and quantitative goals at every level of
Mgt. PERT]
Measurement
of actual performance: observed, measured and facts collected – as
early as possible – on forward looking basis – difficult if custom made
production, less technical,
Comparison:
disclose deviations – develop a range of tolerance – possible with
knowledge and experience –
Corrective
Action: should not be just a ritual or post -mortem of events –
corrective actions could be from changing methodology, technique,
structure, communication, modifying goals, reassignment/clarification of
duties, additional/better staffing, better leading,
Motivation – either for
cure or prevention – automatic, self regulating mechanism is introduced – could
be short term – for immediate reorientation to avoid further damage – that
could be expensive – therefore expert advice/consultant/committee –
Critical Control Points and
Standards [CCP]
For Observation and corrective action – Mgt. need to
tailor their own points - CCP are either limiting factors or with better
observation capacity – these points help to increase the span of control,
reduce cost, better communication – what will reflect goals, what will show
failure, what will measure critical deviations, what will establish
responsibility for failure, what standards will cost least, what will give
information economically, e.g. quality control dept. R & D dept. safety
dept. Health & Hygiene dept. Security dept. Inspection dept.
Feedback:
in time – acts as a motivator- real time information control ‘what is
happening while it is happening’ electronic gathering, transmission,
storage of data,
Feed back system as control
device: Feed back loop
Real Time Information Control: information about what
is happening while it is happening – electronic gathering transmission and
storage of data – corrective action Programme ERP – Feed Forward Controls:
to be more effective, controls directed towards future – than postmortem –
Techniques are – Forecasting, Cash flow planning, PERT [Programme Evaluation
and Review Technique] Feed Forward in Engineering [Thermostatic control] Feed
Forward in Human System [behavior will be monitored – strikes, attitudes,
adaptiveness, initiative, insubordination]
Requirements for Feed Forward
Controls
1.Through and careful analysis of the pros and corns
system to identify more important input variables
Develop
a model of the system – continuous information – received, processed,
analyzed
Model
reviewed – realistic results
Corrective
actions in time
Objectives/importance/advantages:
·Points out weaknesses and errors – to rectify
·Prevents recurrence of weaknesses and errors
·Assessment of present/current – operations,
actions, state of affairs
·Identify desirable changes: to correct
deviations – confusion, mistakes, delays, loss of efforts, frictions,
·Encourages delegation and decentralization
·Stimulates action – essence of control
·Builds strengths and morale of the employees
·Corrective decisions –
·Planning becomes effective and meaningful
·Improves span of Mgt.
Limitations:
·Establishing Standards – intangible
activities, Quality standards – no need to observe every thing – critical
points
·External factors – beyond the scope – too
many
·Resistance from Employees – if intensive
controls
·Trained/qualified personnel needed –
·Not cohesive to creativity: interferes
with freedom of thinking/action
Characteristics:
·Control and Planning are inseparable: planning
is to be designed to fit the specifications of control – to guide the
evaluation of performance
·A continuous process: revisions, analysis
of std.s and variations