THE NATURE OF CONTROL

Control is the regulation of organizational activities so that some targeted element of performance
remains within acceptable limits.
Organizational control refers to the systematic process of regulating organizational activities to make
them consistent with the expectations established in plans, targets, and standards of performance.
Without this regulation, organizations have no indication of how well they are performing in relation to
their goals. Control, like a ship’s rudder, keeps the organization moving in the proper direction.

Features of Controlling
An effective control system has the following features:
It helps in achieving organizational goals. Facilitates optimum utilization of resources.
It evaluates the accuracy of the standard. It also sets discipline and order. Motivates the employees and
boosts employee morale. Ensures future planning by revising standards. Improves overall performance
of an organization. It also minimises errors.

The Purpose of Control

control provides an organization with ways to adapt to environmental change, to limit the accumulation
of error, to cope with organizational complexity, and to minimize costs. These four functions of control
are worth a closer look.

1)Adapting to Environmental Change

In today’s complex and turbulent business environment, all organizations must contend with change. If
managers could establish goals and achieve them instantaneously, control would not be needed. But,
between the time a goal is established and the time it is reached, many things can happen in the
organization and its environment to disrupt movement toward the goal—or even to change the goal
itself.

Limiting the Accumulation of Error

Small mistakes and errors do not often seriously damage the financial health of an organization. Over
time, however, small errors may accumulate and become very serious.

Coping with Organizational Complexity When a firm purchases only one raw material, produces one
product, has a simple organization design, and enjoys constant demand for its product, its managers can
maintain control with a very basic and simple system. But a business that produces many products from
myriad raw materials and has a large market area, a complicated organization design, and many
competitors needs a sophisticated system to maintain adequate control.

Minimizing Costs When it is practiced effectively, control can also help reduce costs and boost output.
For example, Georgia-Pacific Corporation, a large wood products company, learned of a new technology
that could be used to make thinner blades for its saws. The firm’s control system was used to calculate
the amount of wood that could be saved from each cut made by the thinner blades relative to the costs
used to replace the existing blades.
 Steps in the Control Process

Regardless of the type or levels of control systems that an organization needs, each control process has
four fundamental steps.

Establishing Standards

The first step in the control process is establishing standards. A control standard is a target against which
subsequent performance will be compared. Employees at a Taco Bell fast-food restaurant, for example,
work toward the following service standards:

A minimum of 95 percent of all customers will be greeted within 3 minutes of their arrival.
Preheated tortilla chips will not sit in the warmer more than 30 minutes before they are served to
customers or discarded.
Empty tables will be cleaned within 5 minutes after being vacated.

Measuring Performance
The second step in the control process is measuring performance. Performance measurement is a
constant, ongoing activity for most organizations. For control to be effective, performance measures
must be valid. Daily, weekly, and monthly sales figures measure sales performance, and production
performance may be expressed in terms of unit cost, product quality, or volume produced. Employees’
performance is often measured in terms of quality or quantity of output, but for many jobs,measuring
performance is not so straightforward.

Comparing Performance Against Standards

The third step in the control process is comparing measured performance against established standards.
Performance may be higher than,lower than, or identical to the standard. In some cases, comparison is
easy.

Considering Corrective Action

The final step in the control process is determining the need for corrective action. Decisions regarding
corrective action draw heavily on a manager’s analytic and diagnostic skills.
For example, as health-care costs have risen,many firms have sought ways to keep their own expenses in
check. Some have reduced benefits; others have opted to pass on higher costs to their employees.
After comparing performance against control standards, one of three actions is appropriate:

1. Maintain the status quo (do nothing),

2. correct the deviation, or

3. change the standards.

Maintaining the status quo is preferable when performance essentially matches the standards, but it is
more likely that some action will be needed to correct a deviation from the standards.
 Types of Control

Feedforward Control :
Before starting the production process, organisation needs inputs in the form of men, material, money
and other resources. Feedforward control chooses the best inputs to avoid defective outputs which do
not conform to standards.
Concurrent Control : Feedforward controls are based on future. Concurrent controls are, therefore,
more practical than feedforward controls. They control the activities while they are being performed. It is
controlling the process of production before the goods and services are produced.
Feedback Control : Feedback control analyses the final output, compares it with standard output, finds
deviations and checks the deviations. It brings actual performance in conformity with planned
performance

Key Interrelationships:

Planning Sets Standards for Control:

Planning establishes the benchmarks and performance standards that controlling measures against.
Without a clear plan, managers wouldn't know what to measure or control, making it difficult to assess
progress.

Control Ensures the Achievement of Plans:

Controlling ensures that the activities within the organization are aligned with the plans. Through
monitoring, evaluating, and taking corrective actions, managers can adjust operations as needed to meet
the planned goals.
Feedback Loop:
Controlling provides feedback on the effectiveness of plans. This feedback helps managers assess
whether plans are realistic and need adjustment. It also informs future planning by identifying gaps,
challenges, or successes in current operations.

Importance for Managers to Integrate Planning and Controlling:

Goal Achievement:Integration ensures that the organization is continuously aligned with its goals.
Controlling acts as a corrective mechanism to bring the organization back on course when performance
deviates from the plan.
Resource Optimization:Effective control allows managers to adjust resources, eliminate inefficiencies,
and ensure that the organization uses its resources to achieve the objectives laid out in the plan.
Proactive Management:By integrating controlling with planning, managers can identify potential issues
early and take preventive measures rather than reacting to problems after they occur.
Adaptability:The feedback from the controlling function enables managers to adapt plans to changing
conditions, making the organization more flexible and responsive to internal and external changes.

• In summary, planning and controlling are interdependent. A well-structured plan is ineffective

without control, and controlling has no meaning without a plan. Together, they form a
continuous cycle that ensures organizational efficiency, effectiveness, and success.