Assignment on Controlling

What is Controlling?

Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance discovers the causes of such deviations and helps in taking corrective actions.

On other hand Controlling is one of the managerial functions like planning, organizing, staffing and directing. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner. According to modern concepts, control is a foreseeing action whereas earlier concept of control was used only when errors were detected. Control in management means setting standards, measuring actual performance and taking corrective action. Thus, control comprises these three main activities

“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.”

…………………. According to Henri Fayol,

“Control is checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance

………………… According to EFL Breach

“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.”

………………… According to Harold Koontz

“Management is the profession of control.”

………………… According to Stafford Beer

So, controlling is the regulation activities so that some targeted elements of performance remains within acceptable limits.

Organizational Control Objectives

Simply put, organizational control is the process of assigning, evaluating, and regulating resources on an ongoing basis to accomplish an organization's goals. To successfully control an organization, managers need to not only know what the performance standards are, but also figure out how to share that information with employees. Control can be defined narrowly as the process a manager takes to assure that actual performance conforms to the organization's plan, or more broadly as anything that regulates the process or activity of an organization. The following content follows the general interpretation by defining managerial control as monitoring performance against a plan and then making adjustments either in the plan or in operations as necessary.

The six major purposes of controls are as follows:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.

Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.

Controls aid in decision making. The ultimate purpose of controls is to help managers make better decisions. Controls make managers aware of problems and give them information that is necessary for decision making.

Many people assert that as the nature of organizations has changed, so must the nature of management controls. New forms of organizations, such as self-organizing organizations, self-managed teams, and network organizations, allow organizations to be more responsive and adaptable in today's rapidly changing world. These forms also cultivate empowerment among employees, much more so than the hierarchical organizations of the past.

Some people even claim that management shouldn't exercise any form of control whatsoever, and should only support employee efforts to be fully productive members of organizations and communities. Along those same lines, some experts even use the word “coordinating” in place of “controlling” to avoid sounding coercive. However, some forms of controls must exist for an organization to exist. For an organization to exist, it needs some goal or purpose, or it isn't an organization at all. Individual behaviors, group behaviors, and all organizational performance must be in line with the strategic focus of the organization.

Types of Organization Control

Control can focus on events before, during, or after a process. For example, a local automobile dealer can focus on activities before, during, or after sales of new cars. Careful inspection of new cars and cautious selection of sales employees are ways to ensure high quality or profitable sales even before those sales take place. Monitoring how salespeople act with customers is a control during the sales task. Counting the number of new cars sold during the month and telephoning buyers about their satisfaction with sales transactions are controls after sales have occurred. These types of controls are formally called feedforward, concurrent, and feedback, respectively
• Feedforward controls, sometimes called preliminary or preventive controls, attempt to identify and prevent deviations in the standards before they occur. Feedforward controls focus on human, material, and financial resources within the organization. These controls are evident in the selection and hiring of new employees. For example, organizations attempt to improve the likelihood that employees will perform up to standards by identifying the necessary job skills and by using tests and other screening devices to hire people with those skills.
• Concurrent controls monitor ongoing employee activity to ensure consistency with quality standards. These controls rely on performance standards, rules, and regulations for guiding employee tasks and behaviors. Their purpose is to ensure that work activities produce the desired results. As an example, many manufacturing operations include devices that measure whether the items being produced meet quality standards. Employees monitor the measurements; if they see that standards are not being met in some area, they make a correction themselves or let a manager know that a problem is occurring.
• Feedback controls involve reviewing information to determine whether performance meets established standards. For example, suppose that an organization establishes a goal of increasing its profit by 12 percent next year. To ensure that this goal is reached, the organization must monitor its profit on a monthly basis. After three months, if profit has increased by 3 percent, management might assume that plans are going according to schedule.
Effective Organizational Control Systems
The management of any organization must develop a control system tailored to its organization's goals and resources. Effective control systems share several common characteristics. These characteristics are as follows:
• A focus on critical points. For example, controls are applied where failure cannot be tolerated or where costs cannot exceed a certain amount. The critical points include all the areas of an organization's operations that directly affect the success of its key operations.
• Integration into established processes. Controls must function harmoniously within these processes and should not bottleneck operations.
• Acceptance by employees. Employee involvement in the design of controls can increase acceptance.
• Availability of information when needed. Deadlines, time needed to complete the project, costs associated with the project, and priority needs are apparent in these criteria. Costs are frequently attributed to time shortcomings or failures.

• Economic feasibility. Effective control systems answer questions such as, “How much does it cost?” “What will it save?” or “What are the returns on the investment?” In short, comparison of the costs to the benefits ensures that the benefits of controls outweigh the costs.
• Accuracy. Effective control systems provide factual information that's useful, reliable, valid, and consistent.
• Comprehensibility. Controls must be simple and easy to understand

CHARACTERISTICS OF EFFECTIVE CONTROL SYSTEMS

Effective control systems have certain characteristics. For a control system to be effective, it must be:

1. Accurate. Information on performance must be accurate. Evaluating the accuracy of the information they receive is one of the most important control tasks that managers face.

2. Timely. Information must be collected, routed, and evaluated quickly if action is to be taken in time to produce improvements.

3. Objective and Comprehensible. The information in a control system should be understandable and be seen as objective by the individuals who use it. A difficult-to understands control system will cause unnecessary mistakes and confusion or frustration among employees.

4. Focused on Strategic Control Points. The control system should be focused on those areas where deviations from the standards are most likely to take place or where deviations would lead to the greatest harm.

5. Economically Realistic. The cost of implementing a control system should be less than, or at most equal to, the benefits derived from the control system.

6. Organizational Realistic. The control system has to be compatible with organizational realities and all standards for performance must be realistic.

7. Coordinated with the Organization's Work Flow. Control information needs to be coordinated with the flow of work through the organization for two reasons: (1) each step in the work process may affect the success or failure of the entire operation, (2) the control information must get to all the people who need to receive it.

8. Flexible. Controls must have flexibility built into them so that the organizations can react quickly to overcome adverse changes or to take advantage of new opportunities.

9. Prescriptive and Operational. Control systems ought to indicate, upon the detection of the deviation from standards, what corrective action should be taken.

10. Accepted by Organization Members. For a control system to be accepted by organization members, the controls must be related to meaningful and accepted goals.

These characteristics can be applied to controls at all levels of the organization.

Steps in Control Process

The control process involves carefully collecting information about a system, process, person, or group of people in order to make necessary decisions about each. Managers set up control systems that consist of four key steps:

1. Establish standards to measure performance. Within an organization's overall strategic plan, managers define goals for organizational departments in specific, operational terms that include standards of performance to compare with organizational activities.

2. Measure actual performance. Most organizations prepare formal reports of performance measurements that managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data.

3. Compare performance with the standards. This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variance—that is, the difference between each actual amount and the associated standard.

4. Take corrective actions. When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centered environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step—corrective action. The most effective course may be prescribed by policies or may be best left up to employees' judgment and initiative.

These steps must be repeated periodically until the organizational goal is achieved.

Why do people dislike control?

Managers sometimes make the mistake of assuming that the value of an effective control system is self-evidence to employees. There are many reason many employee dislike control, that’s are given below.

Over control:

Occasionally organizations try to control too many things. This becomes problematic when control directly affects employee behavior. Troubles arise when employees perceive these attempts to limit their behavior as being unreasonable. A company that tells its employees how to dress, how to arrange the desks and how to wear. For this over control people dislike controlling.

Inappropriate Focus:

The control system may be too narrow, or it may focus too much on quantifiable variables and leave no room for analysis. A university reward system that encourages faculty members to publish large numbers of articles but fails to consider the quality of the work is also inappropriately focused. Employees dislike the intent of the control system by focusing their efforts only at the performance indicators being used.

Reward for inefficiency:

Imagine two operating departments that are approaching the end of their fiscal years. Dept 1expects to have $25000 of its budget left over dept 2 is

already $ 10000 in the red. As a result dept 1 is likely to have its budget cut for the next year and dept 2 is likely to get a budget increase. Thus dept 1 is punished for being efficient and dept 2 is rewarded for being inefficient. As with inappropriate focus, people dislike control.

Too much Accountability:

Effective controls allow managers to determine whether employees successfully discharge their responsibilities. If standars are properly set and performance accurately measured, managers know when problem arise and which departments and individuals are responsible. People who do not want to answerable for their mistakes or who do not want to work as hard as their boss might like therefore resist control.

At last I can say that effective control may bring success for the organization, but over control, Inappropriate Focus, Reward for inefficiency and too much Accountability is the cause of dislike control.

How to make control more effective?

There are much ways to make control more effective. If the control systems are properly integrated with organizational planning and if the control are flexible, accurate timely and objective, the organization will be less likely to control, to focus on appropriate standards, or to reward efficiency. All are geven below.

Flexible:

Control of an organization should be flexible. It should be changed at any moment and situation.

Encourage Employee Participation:

Employee Participation can make control more effective. By the same token when employees are involved with planning and implementing the control system, they are less likely to resists it . For instance employee participation in planning, decision-making and quality control has increased employees concerned.

Developed verification procedures:

Verification procedures is a part of controlling. In some organization problem found in verification procedures. It is a great barrier for effective controlling. Suppose that an employee who was fired for excessive absences argues that he was not absent “for a long time”. An effective human resource control system should have records that support the termination.