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Managerial Control: Steps in A Control Process

Control involves establishing standards, measuring performance against those standards, and taking corrective actions when needed. The objectives of control are to ensure progress towards goals, identify deviations from plans, and indicate what corrective actions are required. An effective control system is suitable for the organization, provides timely information, is clear and economical, reveals exceptions, and motivates high performance without reducing other priorities. Control systems benefit organizations by increasing productivity, reducing errors, meeting deadlines, improving communication, enhancing safety, and lowering costs.

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50 views

Managerial Control: Steps in A Control Process

Control involves establishing standards, measuring performance against those standards, and taking corrective actions when needed. The objectives of control are to ensure progress towards goals, identify deviations from plans, and indicate what corrective actions are required. An effective control system is suitable for the organization, provides timely information, is clear and economical, reveals exceptions, and motivates high performance without reducing other priorities. Control systems benefit organizations by increasing productivity, reducing errors, meeting deadlines, improving communication, enhancing safety, and lowering costs.

Uploaded by

benaminsan
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Managerial Control

The main objective of control is to bring out the variations between standards set and performance and then take necessary steps to prevent the occurrence of such variations in future. Checking current Performance against Standards

Steps in a Control Process


1. Establishing Standards 2. Measuring and comparing results against standards 3. Taking corrective actions Establishing Standards Standards need to be set against which the results could be measured. Standards are of following types a. Physical standards: labour hour per unit of output, units of production per machine hour b. Cost Standards: material cost per unit, selling cost per unit of sale etc c. Revenue standard: average sale per customer d. Capital standards: rate of return on capital invested e. Intangible standards: competence of managers and employees f. Working Practice Standard: Measuring and comparing results against standards Personal observation Figures, reports, charts, statements Stages of measurement Taking corrective actions To restore normal position Analyze causes Remedial action

Need For Control


To measure progress Progress towards goal To ascertain the position relative to planned course To uncover deviations Deviations can become serious Change: market shifts, new products, new materials, new regulations may affect the organisation

Complexity: diversified products need close monitoring Mistakes: catch mistakes before they become serious Delegation: check on tasks delegated to subordinates To indicate corrective actions Corrective actions indicated by the control system is implemented Fig. 18.1 page 331

Essentials of Effective Control system


Suitable: control system should be appropriate to the nature and needs of activity Timely and Forward looking: short and quick forecast Objective and Comprehensible: understandable, clear and definite Economical Perspective and operational Acceptable to organisation members Reveal exceptions at strategic points Motivate people to high performance Should not lead to less attention to other aspects

Benefits of Control System


Increases productivity Reduces defects and mistakes Helps meet deadlines Facilitates communication Improves safety Lowers cost Gives the workers control over their environment

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