Essential Elements of Effective Control
Prerequisites of a Effective Control System For having an effective control system, certain prerequisites are enumerated below:
1. Emphasis on Objectives: Before planning a control system, it is essential to know clearly the objectives of the organisation. The control system must be directed towards the potential or actual deviation from plans early enough to permit effective corrective action.
2. Efficiency of Control Techniques: Control techniques are efficient when they detect deviations from plans and make possible corrective action with the minimum of unsought consequences.
3. Responsibility for Control: The main responsibility for controlling should rest in the manager charged with the implementation of plans.
4. Direct Control: Any control system should be designed to maintain direct contact between the controller and controlled. Even when there are a number of control systems provided by staff specialists, the foreman at the first level is still important because he has direct knowledge of performance.
5. Suitability: Controls should be tailored to fit the needs of the organisation. The flow of information concerning current performance should correspond with the organisational structure employed. If a superior is to be able to control overall operations, he must find a pattern that will provide control for individual parts. Budgets, quotas and other techniques may be useful in controlling separate departments.
6. Flexibility: A good control system must keep pace with the continuously changing pattern of a dynamic business world. It must be responsive to changing conditions. It should be adaptable to new developments including the failure of the control system itself. Plans may call for an automatic system to be backed up by a human system that would operate in an emergency; likewise, an automatic system may back up a human system.
7. Self-Control: Units may be planned to control themselves. If a department can have its own goals and control system, much of the detailed controls can be handled within the department. These sub-systems of self-control can then be tied together by the overall control system.
8. Control by Exception: This is also known as ‘management by exception’. According to this principle, only significant deviations from standards, whether positive or negative, require management’s attention as they constitute exceptions. An attempt to go through all deviations tends to increase unnecessary work and decrease attention on important problems. In practice, it is not possible for a manager to check each and every item being produced because of limited time available with him. An attempt to control everything may prove to be a futile exercise. Therefore, the control system should be designed in such a manner that only significant deviations from the standard performance are reported to the higher level managers. This will ensure effective action by the manager.
9. Strategic Point Control: It is not sufficient merely to look at exceptions. Some deviations from standards have rather little impact and others have a great deal. Small deviations in certain areas may have greater significance than large deviations in other areas. For example, deviation of 5 per cent in budgeted labour cost may be more troublesome to a manager than a deviation of 20 per cent in budgeted postal charges. Therefore, the principle of exception must be accompanied by the principle of strategic point control which states that effective control can be achieved if critical, key or strategic points can be identified and close attention directed to adjustment at those point. It is not enough just to look for exceptions, a manager must look for exceptions at critical points.
10. Corrective Action: Merely pointing of deviations is not sufficient in a good control system. It must lead to corrective action to be taken to check deviations from standards through appropriate planning, organising and directing.
11. Forward-looking Control: The control system should be directed towards future. It should report all the deviations from the standards quickly in order to safeguard the future. If the control reports are not directed at future, they are of no use as they will not be able to suggest the types of measures to be taken to rectify the past deviations.
12. Human Factor: A good system of control should find the persons accountable for results, whenever large deviations take place. They must be guided and directed, if necessary. Thus, human factor must be given proper attention while controlling. The use of controls should not be resisted by the employees. A technically well-designed control system may fail because the human beings may react unfavourably to the system.
13. Economical : The systems of control must be worth their costs. They must justify the expenses involved. A control system is justifiable if the savings anticipated from it exceed the expected costs in its working. Small scale production units cannot afford elaborate and expensive control systems.
14. Objective Standards: As far as possible, standards should be objective. If they are subjective, a manager’s or a subordinate’s personality may influence judgements of performance. Effective control requires objective, accurate and suitable standards. Objective standards may be quantitative or qualitative. However, in either case, the standard should be determinable and verifiable.
From the analysis of the requirements of a good control system, it is quite obvious that planning is the basis of control, action its essence, delegation its key, and information its guide.
