Control Ppm

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COLLEGE OFENGINEERING &

TECHNOLOGY, BIKANERAN ASSIGNMENT ON

CONTROL(PRINCIPLES AND PRACTICE OF

MANAGEMENT)

SUBMITTED TO : Mr. MUKESH KUKNA

SUBMITTED BY : ASHISH KUMARTHANVIKHYATI KHATURIYA

M.B.A. 1ST Year(1ST Sem.)


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CONTROL (MANAGEMENT)

Control is one of the managerial functions like planning,organizing, staffing and directing. It is an important function

because it helps to check the errors and to take thecorrective action so that deviation from standards areminimized and stated goals of the organization are achievedin desired manner.

According to modern concepts, control is a foreseeing action whereas earlier concept ofcontrol was used only when errors were detected. Control in management means settingstandards, measuring actual performance and taking corrective action. Thus, controlcomprises these three main activities.

DEFINITIONS

According to Henri Fayol,

Control of an undertaking consists of seeing that everythingis being carried out in accordance with the plan which hasbeen adopted, the orders which have been given, and the

principles which have been laid down. Its object is to pointout mistakes in order that they may be rectified and

prevented from recurring.

According to EFL Breach ,

Control is checking current performance against pre-determined standards contained in the plans, with a view to

ensure adequate progress and satisfactory performance.According to Harold Koontz,

Controlling is the measurement and correction ofperformance in order to make sure that enterprise objectivesand the plans devised to attain them are accomplished.

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According to Stafford Beer,

Management is the profession of control.

In 1916, Henri Fayol formulated one of the first definitions ofcontrol as it pertains to management:

Control consists of verifying whether everything occurs inconformity with the plan adopted, the instructions issued,and principles established. It ['s] object [is] to point outweaknesses and errors in order to rectify [them] and preventrecurrence.

Robert J. Mockler presented a more comprehensive definitionof managerial control:

Management control can be defined as a systematic effort bybusiness management to compare performance to

predetermined standards, plans, or objectives in order todetermine whether performance is in line with thesestandards and presumably in order to take any remedialaction required to see that human and other corporateresources are being used in the most effective and efficientway possible in achieving corporate objectives.

Also control can be defined as "that function of the systemthat adjusts operations as needed to achieve the plan or tomaintain variations from system objectives within allowablelimits". The control subsystem functions in close harmonywith the operating system. The degree to which they interact

depends on the nature of the operating system and itsobjectives. Stability concerns a system's ability to maintain apattern of output without wide fluctuations. Rapidity ofresponse pertains to the speed with which a system cancorrect variations and return to expected output.

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A political election can illustrate the concept of control andthe importance of feedback. Each party organizes acampaign to get its candidate selected and outlines a plan toinform the public about both the candidate's credentials and

the party's platform. As the election nears, opinion pollsfurnish feedback about the effectiveness of the campaignand about each candidate's chances to win. Depending onthe nature of this feedback, certain adjustments in strategyand/or tactics can be made in an attempt to achieve thedesired result.

From these definitions it can be stated that there is close link

between planning and controlling. Planning is a process bywhich an organizations objectives and the methods toachieve the objectives are established, and controlling is aprocess which measures and directs the actual performanceagainst the planned objectives of the organization. Thus,planning and control are often referred to as Siamese twinsof management.

ORGANIZATIONAL CONTROL OBJECTIVES

Simply put, organizational control is the process of assigning,evaluating, and regulating resources on an ongoing basis toaccomplish an organization's goals. To successfully controlan organization, managers need to not only know what theperformance standards are, but also figure out how to share

that information with employees.

Control can be defined narrowly as the process a managertakes to assure that actual performance conforms to theorganization's plan, or more broadly as anything thatregulates the process or activity of an organization. Thefollowing content follows the general interpretation by

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defining managerial control as monitoring performanceagainst a plan and then making adjustments either in theplan or in operations as necessary.

The six major purposes of controls are as follows:

Controls make plans effective. Managers need tomeasure progress, offer feedback, and direct their teamsif they want to succeed.

Controls make sure that organizational activitiesare consistent. Policies and procedures help ensurethat efforts are integrated.

Controls make organizations effective.Organizations need controls in place if they want toachieve and accomplish their objectives.

Controls make organizations efficient. Efficiencyprobably depends more on controls than any othermanagement function.

Controls provide feedback on project status. Notonly do they measure progress, but controls also providefeedback to participants as well. Feedback influencesbehavior and is an essential ingredient in the controlprocess.

Controls aid in decision making. The ultimatepurpose of controls is to help managers make betterdecisions. Controls make managers aware of problemsand give them information that is necessary for decisionmaking.

Many people assert that as the nature of organizations haschanged so must the nature of management controls. Newforms of organizations, such as self-organizing organizations,self-managed teams, and network organizations, alloworganizations to be more responsive and adaptable in today'srapidly changing world. These forms also cultivate

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empowerment among employees, much more so than thehierarchical organizations of the past.

Some people even claim that management shouldn't

exercise any form of control whatsoever, and should onlysupport employee efforts to be fully productive members oforganizations and communities. Along those same lines,some experts even use the word coordinating in place ofcontrolling to avoid sounding coercive. However, someforms of controls must exist for an organization to exist. Foran organization to exist, it needs some goal or purpose, or itisn't an organization at all. Individual behaviors, group

behaviors, and all organizational performance must be in linewith the strategic focus of the organization.

FEATURES OF CONTROLLING FUNCTION

Following are the characteristics of controlling function ofmanagement-

1. Controlling is an end function- A function whichcomes once the performances are made in conformitieswith plans.

2. Controlling is a pervasive function- which means it isperformed by managers at all levels and in all type ofconcerns.

3. Controlling is forward looking- because effectivecontrol is not possible without past being controlled.Controlling always looks to future so that follow-up canbe made whenever required.

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4. Controlling is a dynamic process- since controllingrequires taking reviewal methods; changes have to bemade wherever possible.

5. Controlling is related with planning- Planning and

Controlling are two inseparable functions ofmanagement. Without planning, controlling is ameaningless exercise and without controlling, planning isuseless. Planning presupposes controlling andcontrolling succeeds planning.

THE ELEMENTS OF CONTROL The four basic elements in a control system (1) thecharacteristic or condition to be controlled, (2) the sensor, (3)the comparator , and (4) the activator occur in the samesequence and maintain a consistent relationship to eachother in every system.

The first element is the characteristic or condition of the

operating system which is to be measured. We select aspecific characteristic because a correlation exists between itand how the system is performing. The characteristic may bethe output of the system during any stage of processing or itmay be a condition that has resulted from the output of thesystem. For example, it may be the heat energy produced bythe furnace or the temperature in the room which haschanged because of the heat generated by the furnace. In an

elementary school system, the hours a teacher works or thegain in knowledge demonstrated by the students on anational examination are examples of characteristics thatmay be selected for measurement, or control.

The second element of control, the sensor, is a means formeasuring the characteristic or condition. The control

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subsystem must be designed to include a sensory device ormethod of measurement. In a home heating system thisdevice would be the thermostat, and in a quality-controlsystem this measurement might be performed by a visual

inspection of the product.

The third element of control, the comparator, determines theneed for correction by comparing what is occurring with whathas been planned. Some deviation from plan is usual andexpected, but when variations are beyond those consideredacceptable, corrective action is required. It is often possibleto identify trends in performance and to take action before

an unacceptable variation from the norm occurs. This sort ofpreventative action indicates that good control is beingachieved.

The fourth element of control, the activator, is the correctiveaction taken to return the system to expected output. Theactual person, device, or method used to direct correctiveinputs into the operating system may take a variety of forms.It may be a hydraulic controller positioned by a solenoid or

electric motor in response to an electronic error signal, anemployee directed to rework the parts that failed to passquality inspection, or a school principal who decides to buyadditional books to provide for an increased number ofstudents. As long as a plan is performed within allowablelimits, corrective action is not necessary; this seldom occursin practice, however.

EFFECTIVE ORGANIZATIONAL CONTROLSYSTEMS

The management of any organization must develop a controlsystem tailored to its organization's goals and resources.Effective control systems share several commoncharacteristics. These characteristics are as follows:

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A focus on critical points. For example, controls areapplied where failure cannot be tolerated or where costscannot exceed a certain amount. The critical points includeall the areas of an organization's operations that directly

affect the success of its key operations.

Integration into established processes. Controlsmust function harmoniously within these processes andshould not bottleneck operations.

Acceptance by employees. Employee involvement inthe design of controls can increase acceptance.

Availability of information when needed. Deadlines,

time needed to complete the project, costs associatedwith the project, and priority needs are apparent in thesecriteria. Costs are frequently attributed to timeshortcomings or failures.

Economic feasibility. Effective control systems answerquestions such as, How much does it cost? What willit save? Or What are the returns on the investment?In short, comparison of the costs to the benefits ensuresthat the benefits of controls outweigh the costs.

Accuracy. Effective control systems provide factualinformation that's useful, reliable, valid, and consistent.

Comprehensibility. Controls must be simple and easyto understand.

Controlling as a management function involvesfollowing steps (PROCESS):

1. Establishment of standards- Standards are the plansor the targets which have to be achieved in the course ofbusiness function. They can also be called as thecriterions for judging the performance. Standardsgenerally are classified into two-

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a. Measurable or tangible Those standards which canbe measured and expressed are called asmeasurable standards. They can be in form of cost,output, expenditure, time, profit, etc.

b.Non-measurable or intangible- There are standardswhich cannot be measured monetarily. For example-performance of a manager, deviation of workers,their attitudes towards a concern. These are calledas intangible standards.

Controlling becomes easy through establishment ofthese standards because controlling is exercised on the

basis of these standards.

2. Measurement of performance- The second majorstep in controlling is to measure the performance.Finding out deviations becomes easy through measuringthe actual performance. Performance levels aresometimes easy to measure and sometimes difficult.Measurement of tangible standards is easy as it can beexpressed in units, cost, money terms, etc. Quantitative

measurement becomes difficult when performance ofmanager has to be measured. Performance of amanager cannot be measured in quantities. It can bemeasured only by-

a. Attitude of the workers,b. Their morale to work,c. The development in the attitudes regarding the

physical environment, and

d. Their communication with the superiors.

It is also sometimes done through various reports likeweekly, monthly, quarterly, yearly reports.

3. Comparison of actual and standard performance-Comparison of actual performance with the planned

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targets is very important. Deviation can be defined asthe gap between actual performance and the plannedtargets. The manager has to find out two things here-extent of deviation and cause of deviation. Extent of

deviation means that the manager has to find outwhether the deviation is positive or negative or whetherthe actual performance is in conformity with the plannedperformance. The managers have to exercise control byexception. He has to find out those deviations which arecritical and important for business. Minor deviationshave to be ignored. Major deviations like replacement ofmachinery, appointment of workers, quality of raw

material, rate of profits, etc. Should be looked uponconsciously. Therefore it is said, If a manager controlseverything, he ends up controlling nothing. Forexample, if stationery charges increase by a minor 5 to10%, it can be called as a minor deviation. On the otherhand, if monthly production decreases continuously, it iscalled as major deviation.

Once the deviation is identified, a manager has to thinkabout various cause which has led to deviation. Thecauses can be-

a. Erroneous planning,b. Co-ordination loosens,c. Implementation of plans is defective, andd. Supervision and communication is ineffective, etc.

4. Taking remedial actions- Once the causes and extentof deviations are known, the manager has to detectthose errors and take remedial measures for it. Thereare two alternatives here-

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a. Taking corrective measures for deviations whichhave occurred; and

b.After taking the corrective measures, if the actualperformance is not in conformity with plans, the

manager can revise the targets. It is here thecontrolling process comes to an end. Follow up is animportant step because it is only through takingcorrective measures, a manager can exercisecontrolling.

KINDS OF CONTROL

Control may be grouped according to three generalclassifications: (1) the nature of the information flowdesigned into the system (that is, open- or closed-loopcontrol), (2) the kind of components included in the design(that is man or machine control systems), and (3) therelationship of control to the decision process (that is,organizational or operational control).

Open- and Closed-Loop Control

The difference between open-loop control and closed-loopcontrol is determined by whether all of the control elementsare an integral part of the system being regulated, andwhether allowable variations from standard have beenpredetermined. In an open-loop system, not all of theelements will be designed into the system, and/or allowablevariations will not be predetermined.

A Street-lighting system controlled by a timing device is anexample of an open-loop system. At a certain time eachevening, a mechanical device closes the circuit and energyflows through the electric lines to light the lamps. Note,however, that the timing mechanism is an independent unitand is not measuring the objective function of the lighting

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system. If the lights should be needed on a dark, stormy daythe timing device would not recognize this need andtherefore would not activate energy inputs. Correctiveproperties may sometimes be built into the controller (for

example, to modify the time the lights are turned on as thedays grow shorter or longer), but this would not close theloop. In another instance, the sensing, comparison, oradjustment may be made through action taken by anindividual who is not part of the system. For example, thelights may be turned on by someone who happens to pass byand recognizes the need for additional light.

If control is exercised as a result of the operation rather thanbecause of outside or predetermined arrangements, it is aclosed-loop system. The home thermostat is the classicexample of a control device in a closed-loop system. Whenthe room temperature drops below the desired point, thecontrol mechanism closes the circuit to start the furnace andthe temperature rises. The furnace-activating circuit is turnedoff as the temperature reaches the preselected level. Thesignificant difference between this type of system and anopen-loop system is that the control device is an element ofthe system it serves and measures the performance of thesystem. In other words, all four control elements are integralto the specific system.

An essential part of a closed-loop system is feedback; that is,the output of the system is measured continually through theitem controlled, and the input is modified to reduce any

difference or error toward zero. Many of the patterns ofinformation flow in organizations are found to have thenature of closed loops, which use feedback. The reason forsuch a condition is apparent when one recognizes that anysystem, if it is to achieve a predetermined goal, must haveavailable to it at all times an indication of its degree of

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attainment. In general, every goal-seeking system employsfeedback.

Man and Machine Control

The elements of control are easy to identify in machinesystems. For example, the characteristic to be controlledmight be some variable like speed or temperature, and thesensing device could be a speedometer or a thermometer.An expectation of precision exists because the characteristicis quantifiable and the standard and the normal variation to

be expected can be described in exact terms. In automaticmachine systems, inputs of information are used in a processof continual adjustment to achieve output specifications.When even a small variation from the standard occurs, thecorrection process begins. The automatic system is highlystructured, designed to accept certain kinds of input andproduce specific output, and programmed to regulate thetransformation of inputs within a narrow range of variation.

For an illustration of mechanical control, as the load on asteam engine increases and the engine starts to slow down,the regulator reacts by opening a valve that releasesadditional inputs of steam energy. This new input returns theengine to the desired number of revolutions per minute. Thistype of mechanical control is crude in comparison to themore sophisticated electronic control systems in everyday

use. Consider the complex missile-guidance systems thatmeasure the actual course according to predeterminedmathematical calculations and make almost instantaneouscorrections to direct the missile to its target.

Machine systems can be complex because of thesophisticated technology, whereas control of people is

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complex because the elements of control are difficult todetermine. In human control systems, the relationshipbetween objectives and associated characteristics is oftenvague; the measurement of the characteristic may be

extremely subjective; the expected standard is difficult todefine; and the amount of new inputs required is impossibleto quantify. To illustrate, let us refer once more to aformalized social system in which deviant behavior iscontrolled through a process of observed violation of theexisting law (sensing), court hearings and trials (comparisonwith standard), incarceration when the accused is foundguilty (correction), and release from custody after

rehabilitation of the prisoner has occurred.

The speed limit established for freeway driving is onestandard of performance that is quantifiable, but even in thisinstance, the degree of permissible variation and the amountof the actual variation are often a subject of disagreementbetween the patrolman and the suspected violator. Thecomplexity of our society is reflected in many of our laws andregulations, which establish the general standards foreconomic, political, and social operations. A citizen may notknow or understand the law and consequently would notknow whether or not he was guilty of a violation.

Most organized systems are some combination of man andmachine; some elements of control may be performed bymachine whereas others are accomplished by man. Inaddition, some standards may be precisely structured

whereas others may be little more than general guidelineswith wide variations expected in output. Man must act as thecontroller when measurement is subjective and judgment isrequired. Machines such as computers are incapable ofmaking exceptions from the specified control criteriaregardless of how much a particular case might warrant

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special consideration. A pilot acts in conjunction withcomputers and automatic pilots to fly large jets. In the eventof unexpected weather changes, or possible collision withanother plane, he must intercede and assume direct control.

Organizational and Operational Control

The concept of organizational control is implicit in thebureaucratic theory of Max Weber . Associated with thistheory are such concepts as "span of control", "closeness ofsupervision", and "hierarchical authority". Weber's view

tends to include all levels or types of organizational controlas being the same. More recently, writers have tended todifferentiate the control process between that whichemphasizes the nature of the organizational or systemsdesign and that which deals with daily operations. Toillustrate the difference, we "evaluate" the performance of asystem to see how effective and efficient the design provedto be or to discover why it failed. In contrast, we operate and

"control" the system with respect to the daily inputs ofmaterial, information, and energy. In both instances, theelements of feedback are present, but organizational controltends to review and evaluate the nature and arrangement ofcomponents in the system, whereas operational control tendsto adjust the daily inputs.

The direction for organizational control comes from the goals

and strategic plans of the organization. General plans aretranslated into specific performance measures such as shareof the market, earnings, return on investment , and budgets.

The process of organizational control is to review andevaluate the performance of the system against theseestablished norms. Rewards for meeting or exceedingstandards may range from special recognition to salary

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increases or promotions. On the other hand, a failure to meetexpectations may signal the need to reorganize or redesign.

In organizational control, the approach used in the

program of review and evaluation depends on the reason forthe evaluation that is, is it because the system is noteffective (accomplishing its objectives)? Is the system failingto achieve an expected standard of efficiency? Is theevaluation being conducted because of a breakdown orfailure in operations? Is it merely a periodic audit-and-review

process?

When a system has failed or is in great difficulty, specialdiagnostic techniques may be required to isolate the troubleareas and to identify the causes of the difficulty. It isappropriate to investigate areas that have been troublesomebefore or areas where some measure of performance can bequickly identified. For example, if an organization's outputbacklog builds rapidly, it is logical to check first to see if theproblem is due to such readily obtainable measures asincreased demand or to a drop in available man hours. When

a more detailed analysis is necessary, a systematicprocedure should be followed.

In contrast to organizational control, operational controlserves to regulate the day-to-day output relative toschedules, specifications, and costs. Is the output of productor service the proper quality and is it available as scheduled?

Are inventories of raw materials, goods-in-process, and

finished products being purchased and produced in thedesired quantities? Are the costs associated with thetransformation process in line with cost estimates? Is theinformation needed in the transformation process availablein the right form and at the right time? Is the energyresource being utilized efficiently?

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The most difficult task of management concerns monitoringthe behavior of individuals, comparing performance to somestandard and providing rewards or punishment as indicated.Sometimes this control over people relates entirely to their

output. For example, a manager might not be concerned withthe behavior of a salesman as long as sales were as high asexpected. In other instances, close supervision of thesalesman might be appropriate if achieving customersatisfaction were one of the sales organization's mainobjectives.

The larger the unit, the more likely that the control

characteristic will be related to some output goal. It alsofollows that if it is difficult or impossible to identify the actualoutput of individuals, it is better to measure the performanceof the entire group. This means that individuals' levels ofmotivation and the measurement of their performancebecome subjective judgments made by the supervisor.Controlling output also suggests the difficulty of controllingindividuals' performance and relating this to the totalsystem's objectives.

SPAN OF CONTROL

Span of control (sometimes called span of management)refers to the number of workers who report to one manager.For hundreds of years, theorists have searched for an ideal

span of control. When no perfect number of subordinates fora manager to supervise became apparent, they turned theirattention to the more general issue of whether the spanshould be wide or narrow.

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A wide span of management exists when a manager has alarge number of subordinates. Generally, the span of controlmay be wide when

The manager and the subordinates are very competent. The organization has a well-established set of standard

operating procedures. Few new problems are anticipated.

A narrow span of management exists when the manager hasonly a few subordinates. The span should be narrow when

Workers are located far from one another physically. The manager has a lot of work to do in addition to

supervising workers. A great deal of interaction is required between

supervisor and workers. New problems arise frequently.

Keep in mind that the span of management may change fromone department to another within the same organization.

Centralization versus decentralization

The general pattern of authority throughout an organizationdetermines the extent to which that organization iscentralized or decentralized.

A centralized organization systematically works toconcentrate authority at the upper levels. In a

decentralized organization, management consciouslyattempts to spread authority to the lower organization levels.

A variety of factors can influence the extent to which a firm iscentralized or decentralized. The following is a list of possibledeterminants:

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The external environment in which the firmoperates. The more complex and unpredictable thisenvironment, the more likely it is that top managementwill let low-level managers make important decisions.

After all, low-level managers are closer to the problemsbecause they are more likely to have direct contact withcustomers and workers. Therefore, they are in a betterposition to determine problems and concerns.

The nature of the decision itself. The riskier or themore important the decision, the greater the tendency tocentralize decision making.

The abilities of low-level managers. If these

managers do not have strong decision-making skills, topmanagers will be reluctant to decentralize. Strong low-level decision-making skills encourage decentralization.

The organization's tradition of management. Anorganization that has traditionally practicedcentralization or decentralization is likely to maintainthat posture in the future.

In principle, neither philosophy is right or wrong. What worksfor one organization may or may not work for another. KmartCorporation and mcdonald's have both been very successful both practice centralization. By the same token,decentralization has worked very well for General Electricand Sears. Every organization must assess its own situationand then choose the level of centralization ordecentralization that works best.

MANAGEMENT CONTROL TECHNIQUES

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