What do you mean by Managerial Control?

What do you mean by Managerial Control?

Meaning and Concept

Control is a fundamental managerial function. it is the process of regulating organizational activities so that actual performance conforms to expected organizational standards and goals and ensures that necessary corrective action is taken. There are different concepts of control which are used in different contexts. In the first concept control is an executive function. In the second concept it is intimately connected with planning. In the third concept it is a process which guides activity towards some pre-determined goals. In managerial terminology, control is ensuring work accomplishment according to plans. It is a process of ensuring that activities are producing desired results. In short, control is an executive function involving three elements, i.e., standards, evaluative and corrective action.

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Definitions of Control

Some important definition of control are as follows:

In the words of Dalton E. macfarland, “Control, in its managerial sense, can be defined as the presence in a business of that force which guise to a pre-determined objective by means of pre-determined policies and decisions.”

In the words of Koontz and O’Donnell, “Controlling is the measuring and correcting the activities of subordinates to ensure that events conform to plans.”

In the words of E.F.L. Brech, “Control is the process of checking actual performance against the agreed standards or plans with a view to ensuring adequate progress and satisfactory performances.”

According to Henry Fayol, “Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and principles established. It has for object to point out weaknesses and errors in order to rectify them and prevent recurrence.”

In the words of Theo haimann, “Control is the process of checking to determine whether or not plans are being adhered to, whether or not proper progress is being made towards the objectives and goals and acting. It is necessary to correct any deviation.”

Characteristics / Nature / Features of Control

Managerial Function: Control is a basic managerial function of every manager and the responsibility of line authority.

Continuing and Never Ending Activity: Control is a continuing and never ending activity. It involves constant analysis of objectives, policies, procedures, positions, performance standards etc. It starts from planning and continues till so long the enterprise survives.

Exercise at all levels: Control is an exercise at all levels of management, i.e., top level, middle level and bottom level.

Forward Looking: Control is a forward looking activity and not a past activity. Control initiates remedial measures to minimize the mistakes that had happened in the past.

Dynamic Process: Control is a dynamic process. It is flexible and not rigid. Control results in corrective actions which may lead to change in the performance of other functions of management. Since management is handling a business entity which keeps on changing, managerial control is also dynamic. Management will be failing in its duty if its approach is not dynamic.

Corrective Action: The purpose of control is achieved only when corrective action is taken on the basis of feedback information. It is the action which adjusts performance to predetermined standards whenever deviations occur. A good system of control facilitates timely action so that there is minimum waste of time and energy.

control is People-oriented: The approach to managerial control is people-oriented. Control is attained thought people and not thought things. It is people who exercise control.

Scope or Areas of Control or Managerial Control

The scope or areas of control or managerial control are very wide. A well-designed plan of managerial control includes all management activities. According to Holden, Fish and Smith, the main areas of control or scope of control are as follows:

• Control over Policies: The success of  any business organisation, to a large extent, depends on how far its policies are implemented. In many enterprises, policies are controlled through policy manuals.
• Control over Organisation: Control over organisation is a accomplished through he development of organisation chart and organisation manual.
• control over Personnel: The statement that management is getting the work done through people, underlines sufficiently the importance of control of personnel.
• Control over Wages and Salaries: Such type of control is done by having programmes of job evolution and wage and salary analysis. This work is done either by personnel department or industrial engineering department.
• Control over Costs: Cost control is exercised by the cost accountant by setting cost standards for material, labor and overheads and making comparison of actual cost data with standard cost. Cost control is supplemented by budgetary control system.
• Control over Methods: control over methods is accomplished by conducting periodical analysis of activities of each department. The functions performed, method adopted and time devoted y every employee is studied with a view to eliminating non-essential motions, functions and methods.
• Control over Capital Expenditure: It is exercise through a system or evolution of projects, ranking of projects in terms of their ranking power and appropriating capital to various projects.
• Control over Production: Control over production is effected through studies about market needs, attitude of customer and revision in product lines. Efforts are made to simplify and rationalize the line of products.
• Control over Research and Development: Such activities are highly technical in nature, so no direct control is possible over them.
• Control over External Relations: Public relations department is responsible for controlling the external relations of the enterprise. It may prescribe certain measures for other operating departments which are instrumental in improving external relations.
• Overall Control: It is effected the through budgetary control. Master plan is prepared for overall control and all the departments are made to involve themselves in this procedure. For effective control through the master plan, active support of top management is essential.

What are the basic steps in the process of controlling?

Managerial control system involves four steps. First of all, the manager establishes the standards of performance to ensure that performance is in accordance with the plans. After this under the second step, the manager will measure the performance, and under the third step he will compare it with predetermined standards. This will lead the manager to know whether the actual performance has come up to the expected standards or if there is any deviation. In case of any deviation, the manager will take immediate corrective action which is the final step in the step of controlling.

Establishing Standards of Performance:

The first and the foremost step in the control process is the establishment of standards for the measurement of performance. They are the expression of goals of the enterprise or the department. Standards may be tangible or intangible, vague or specific. But they must be established and expressed in such a way that people concerned can easily understand them and the accomplishment can be measured without any difficulty. standards of performance should be simple, accurate, precise, flexible, acceptable, workable and capable of achievement with reasonable amount of cost, effort and time.

Measure of Performance:

The second step in the control process is the measurement of actual performance. In this connection, the management should not depend upon guesswork as far as meeting of standards is concerned. It should measure the actual performance and compare it with the standards. The quantitative measurement should be done in cases where standards have been set in numerical terms. This will make the evaluation quite easy and simple. In other cases, the performance should be measured in terms of qualities factors.

Comparing Performance with Standards:

The third step in the control process is the comparison of performance with established standards. Managers often base their comparisons on information provided in reports that summarize planned versus actual results. Such reports may be presented verbally or in written form or through computerized process. Management by exception principle suggests that managers should be informed of a situation only when control data shows a significant deviation from the set standards. It will save manager’s time by bringing to their attention only those conditions which need their attention.

Taking Corrective Action:

The fourth and final step in the control process is taking corrective action. When significant deviation from standards are detected, corrective action obviously called for. This involves taking certain decisions by the management like re-planning or redrawing of goals or standards, reassignment or reclassification of duties. It may also necessitate reforming the process of selection and training of workers. Thus, control function may require change in all other managerial functions. If the standards are found to be defective, they will be modified or set up again in the light of observations. Joseph massie has pointed out that a manager may commit two types of mistakes at this stage: (i) taking action when no action is needed.  (ii) failing to take action when some corrective action is needed. A good and effective control system should provide some basis for helping the manager estimate the risks of making either of these types of errors. Of course, the final test of control system is whether correct action is taken at the correct time.