Introduction to Management Mgt 111
CHAPTER - SEVEN
MANAGERIAL CONTROL
1.1. What is controlling?
The systematic study of control is a relatively new discipline. Before touching on the
fundamentals, let us define some key terms dealing with the control process.
Control:- Control is the realigning or redirecting of efforts within predetermined standards to
assure that planned goals are reached. As used in management the control process is the
systematic establishment of goals or plans, the measurement and comparison of result with
plans, and the taking of corrective with plans, and the taking of corrective action when
necessary to assure achievement of goals.
Corrective action:- A corrective action is any effort to adjust, redirect, or bring a phenomenon
back in line with a predetermined result. Corrective action is an integral part of the control
process.
Real - time control system:- A real time control system exercises control over the system's
variables while the events and transactions are still taking place. A system which controls the output
of a paper - making machine while paper is being produced is an example of real time control.
This is contrasted with a post defect control system, which adjusts a phenomenon some time after
the events being monitored take place.
Cybernetics:- Cybernetics is the study of the automatic control process formed by the nervous
system and brain or by mechanical - electrical systems. In the automatic control process, the
output of a system is coupled back to the input. Thus the system automatically adjusts it self
based on the results produced. The study of cybernetics deals with any system that can be
automatically controlled.
Throughput:- Throughput is the total volume of work produced by a system in a given
amount of time. Throughput is a measure of an organization's or a system's output of
efficiency. The greater the throughput, the greater the volume of goods and services produced .
Turn around time:- Turn around time is a measure of the elapsed time between submitting a
job or task and the return of results. Control systems are concerned with throughput and
turnaround time. Systems with fast turn around deliver results more quickly than those with
slow turnaround.
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Introduction to Management Mgt 111
Standard cost:- A standard cost is a predetermined cost needed to produce a given good or
service. Standard costs are derived from studies of time and material costs over many
observations. They provide a basis for comparing production and operating costs over time.
Time standard:- A time standard is a predetermined time allotment necessary to produce a
given good or service. Time standards are derived from observation of many cycles in
production of a product or service. They provide a basis for comparing production time over
a number of units produced.
The Meaning of Control
Definition: - Control can be defined as the process of monitoring activities to ensure that they are
being accomplished as planned and of correcting any significant deviations. All managers should
be involved in the control function even if their units are performing as planned. An effective
control system ensures that activities are completed in ways that lead to the attainment of the
organization's goals
The Need for Controls
Controlling is the last function of management. It is last because it is the function that monitors all
other functions. Only through controlling can efficiency and effectiveness be maintained. Besides,
control is important because it is the final link in the functional chain of management: checking
up on activities to ensure that they are going as planned and, when there are significant deviations,
taking the necessary action to correct the deviation. However, the value of the control function
predominantly lies in its relation to planning and delegating.
1.2. Nature and Characteristics of Control
There are many features of control among which the following are common.
i) Controlling is a circular process
Planning and controlling the starting point and destination respectively. As the result in a
management literature they are called Siam twins of management. The planning function sets
standards or goals and controlling makes check up.
ii) Controlling is a base for future direction
Controlling is not counting back but fore ward. That is, it is a retrospective process with out
comes to be used to shape future behaviors.
iii) Controlling is a continues process
Controlling is not one time activity; rather it is continues process which checks the validity,
objectives, policies etc.
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iv) Controlling has both positive and negative outcomes
Controlling is the means by which we approve accepted performance and correct the un
acceptable results.
v) Controlling is aimed at out come not the individual
The objective of controlling process is whether the needed goals are achieved or not, not the
individual.
vi) Controlling is not interference but check up
Controlling should be viewed as check up mechanism rather than the interference of superiors on
subordinates.
Generally, an effective control system is accurate, timely, economical, flexible, and
understandable. It uses reasonable criteria, has strategic placement, emphasizes the exception,
uses multiple criteria, and suggests corrective action.
1.3. The Process Of Controlling
The basic control process is seen around us. Control is found in human and animal organism, in
nature, business, industry, hospitals, schools, and other organizations. Wherever a group of
variables interact or are subject to change, the control function is applied.
The process of controlling involves the following steps:
1) Establish standards and measuring tools.
The first step in control process is the establishment of standards by which events will be
compared. This also involves selection of measurement tools and is part of the planning
process.
In the case of business system, standards may be established for personnel and financial
performance or for quality of manufacture. Standards of performance may be established for
selected individuals, entire departments, or even whole organizations.
2) Measure phenomenon (performance)
The second phase involves measuring the phenomenon. Using standards and tools of
measurement, an assessment is made of the system's performance. In organizations, costs,
profit, return on investment, quality, throughput, and turnaround time are measured.
3) Compare with standard
In this step, the results are compared with standard. A comparison is made between what
actually occurred and what was expected to occur.
4) Readjust and correct
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The last step in the process requires the correction and readjustment of the system to bring
actual results in line with desired results, if necessary. A variety of corrective actions may be
taken, such as acquiring new equipment or personnel, changing budgets, reassigning
personnel, or even opening or closing plans.
1.4. Types Of Control
Control systems are generally developed to provide either of the two types. That are, controls on
the basis of management level (strategic control, tactical control, and operational control) or one
the basis of time frame (presentation, feed forward, and feed back ward control).
i) Based on time frame work
a) Presentation (proactive) controls:- Establish conditions that will make it difficult or
impossible for deviations from the norm to occur. This type of control is in place before
actions begin and blocks activities that are not desired.
b) Feed fore ward (concurrent) controls:- are ongoing controls as soon as the deviations
arise. These controls are future directed, in that they are designed to detect and anticipate
deviations from standards at various points when a system is operational.
c) Feed back (reactive) controls:- are post action controls and focus on the end results of the
process. A feedback control provides information for a manager to examine and apply
future activities that are similar to the present one. The purpose is to help prevent
mistakes in the future.
ii) Based on management level
a) Strategic controls:- by top managers to check strategic plans.
b) Tactical controls:- by middle level managers to check tactical plans.
c) Operational controls:- by supervisory level managers to examine & control activities at
grass root level.
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