DIMENSIONS OF CONTROL

All controls can be characterized through three dimensions. These

characterizations can help us understand where a control fits within the risk
framework, enables us to better assess control capabilities, and helps us
eliminate gaps in our organizations risk management program.
IMPORTANCE OF CONTROL
The Importance of Control in management are as follows:
(1) Reduces Risk:
Control eliminates the risk of non-conformity of actual performance with the
main goals of the organisation. Control is the function which regulates the
operation to ensure the attainment of the set objectives.
Regular measurement of work in progress with proper adjustments in
operations puts the performance on the right track and helps in the
achievement of goals.
(2) Basis for future action:
Control provides the information and facts to the management for planning
and organising when the work is completed and the result is evaluated. In
fact, evaluation of results helps the management replant for non-repetitive
operations and rewarding, punishing and discipline the workers.
It would be better to say that future long term planning is not possible unless
and until control information is available in time to the managers for the
operation of work.
(3) Size of the business:
In large scale business in the modem times it is quite impossible to work
without proper policies, procedures and quality of different varieties of
goods. That is why in a large scale organisation there is always the need of a
scientific system of control to solve the day to day problems.
(4) Indicator for managerial weakness:
In the organisation there will be certain unforeseen and unknown problems
which cannot be traced out by mere planning, organising and staffing efforts.
It is the control process that can trace these out. That is why it is known as
an indicator of the managerial weakness. Control not only finds out the
weakness of managers but also provides solutions and remedial action to
solve the problems.
(5) Facility of coordination:
Management and coordination of the business activities and workers is a
very important role. It binds all the workers and their activities and motivates
them to move towards the common objectives through coordination.
Control will play the role of a middleman between the workers and
management to provide the required information in time to the workers.
(6) Simplifies supervision:
A systematic system of control helps in finding out the deviation existing in
the organisation which also simplifies the task of the supervisor in managing
his subordinates. So through control its becomes simpler for the supervisor
to supervise and guide the workers to follow the right track and fulfill the
required goals.

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(7) Extension of decentralization: Control system helps the top management
to extend the frontiers of decentralization without the loss of control.
Types of Controls

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.

Organizational Control Systems

Management of an organization requires effective organizational

control systems. These were traditionally assured by rigid organizational

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structures such as hierarchical or matrix organizations. In today's
environment we need much more flexible and dynamic organization capable
of responding to rapidly changing conditions. As a result, decision-based
management organizations are never rigidly structured but are fluid and
respond to real time decision requirements.

COMPONENTS OF CONTROL SYSTEMS

OBJECTIVES

Measurable reference points for corrective actions.

Plan what you can measure, and measure what you plan.

STANDARDS

Guideposts on the way to achieving objectives.

EVALUATION-REWARD SYSTEM

Measure and reward individual land team contributions to attaining

organizational objectives.

Steps in Control Process

1. Establishing Standards:
Standards are criteria against which results are measured. They are
norms to achieve the goals. Standards are usually measured in terms of
output. They can also be measured in non-monetary terms like loyalty,
customer attraction, goodwill etc. Some of the standards are as.

a. Time standards:
The goal will be set on the basis of time lapse in performing a task.

b. Cost standards:
These indicate the financial expenditures involved per unit, e.g. material cost
per unit, cost per person, etc.

c. Income standards:
These relate to financial rewards received due to a particular activity like
sales volume per month, year etc.

d. Market share:
This relates to the share of the company's product in the market.

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e. Productivity:
Productivity can be measured on the basis of units produced per man hour
etc.

f. Profitability:
These goals will be set with the consideration of cost per unit, market share,
etc.

2. Measuring Performance

Measurement involves comparison between what is accomplished and

what was intended to be accomplished. The measurement of actual
performance must be in the units similar to those of predetermined criterion.
The unit or the yardstick thus chosen be clear, well-defined and easily
identified, and should be uniform and homogenous throughout the
measurement process.

3. Comparing the Actual Performance with Expected Performance

This is the active principle of the process. The previous two, setting the
goals and the measurement format are the preparatory parts of the process.
It is the responsibility of the management to compare the actual
performance against the standards established.
This comparison is less complicate if the measurement units for the
standards set and the performance measured are the same and quantified.

4. Correcting Deviations:

The final element in the process is the taking corrective action.

Measuring and comparing performance, detecting shortcomings, failures or
deviations, from plans will be of no avail if it does point to the needed
corrective action.
Thus controlling to be effective, should involve not only the detection of
lapses but also probe into the failure spots, fixation of responsibility for the
failures at the right quarters, recommendation of the best possible steps to
correct them. These corrective actions must be applied when the work is in
progress. The primary objective should be avoidance of such failures in
future.

The required corrective action can be determined from the qualified

data as per the standards laid out and the performance evaluation already
done. This step should be taken promptly, otherwise losses may be
cumulative and remedial action will be all the more difficult to take.
Corrective action must be well balanced, avoiding over controlling and at the
same time letting not things to drift.

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