LEADERSHIP

• Leadership transforms potential into reality.

• Leadership is the ability to influence a group towards the achievement of a vision or set of
goals.
• Leadership is a process by which an executive can direct, guide and influence the behavior
and work of others towards accomplishment of specific goals in a given situation.
• Leadership is the ability of a manager to induce the subordinates to work with confidence
and zeal.
• Keith Davis observes that, “without leadership, an organization is but a muddle of men and
machines… It is the ultimate act which brings to success all the potential that is in an
organization and its people”.
• “Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is
the human factor which binds a group together and motivates it towards goals.”
…… Keith Davis
• “Leadership is the ability of a superior to influence the behaviour of subordinates and
persuade them to follow a particular course of action”. …. Chester Bernard
• The ingredients of leadership are:
• 1) Power
• 2) A fundamental understanding of people
• 3) The ability to inspire followers to apply their full capabilities
• 4) The leader’s style and the development of a conducive organizational climate
Characteristics of Leadership

• Inter-personal process -manager influencing and guiding workers towards attainment

of goals.
• Qualities to be present in a person which includes intelligence, maturity and
personality.
• Group process-involves two or more people interacting with each other.
• Shaping and Moulding the behaviour of the group towards accomplishment of
organizational goals.
• Situation bound-no best style of leadership. It all depends upon tackling with the
situations.
Importance of Leadership
• To maximize efficiency and to achieve organizational goals
• 1.Initiates action- by communicating the policies and plans to the subordinates from
where the work actually starts.
• 2.Motivation- motivates the employees with economic and non-economic rewards
and thereby gets the work from the subordinates.
• 3.Providing guidance- guiding role for the subordinates. Guidance here means
instructing the subordinates the way they have to perform their work effectively and
efficiently.
• 4.Creating confidence- Confidence is an important factor which can be achieved
through expressing the work efforts to the subordinates, explaining them clearly their
role and giving them guidelines to achieve the goals effectively.
• 5.Building morale- willing co-operation of the employees towards their work and
getting them into confidence and winning their trust.
• 6.Builds work environment- helps in sound and stable growth. personal contacts with
employees and should listen to their problems and solve them. treat employees on
humanitarian terms.
• 7.Co-ordination- Co-ordination can be achieved through reconciling personal interests
with organizational goals. This synchronization can be achieved through proper and
effective co-ordination which should be primary motive of a leader
Leadership Behaviour and Styles
• Leadership style -is the manner and approach of providing direction, implementing
plans, and motivating people.
• Kurt Lewin (1939) led a group of researchers to identify different styles of leadership.
• This early study has been very influential and established three major leadership styles.
1) Authoritarian or autocratic
• 2) Participative or democratic
• 3) Delegative or free-rein These styles are characterized by the amount of control that
the leader applies on the team.
 Authoritarian or Autocratic
Leadership
• This style is used when leaders determine the actions of the group without any discussion.
• They tend to exercise total control of the team and the decision making process.
• The leader gives the directions and the team follows them.
• While, this style of leadership may save time in the short term, few new ideas are generated and
generally morale is low.
• The authoritarian or autocratic style should normally only be used on rare occasions.
• If one have the time and want to gain more commitment and motivation from other employees,
then one should use the participative style.
 Participative or Democratic
Leadership
• These leaders encourage their team to be actively involved in decision making.
• They delegate authority to suitably skilled team members and provide opportunities for others
to develop their skills.
• Because there is an ongoing exchange of information, the team tends to be productive and
efficient.
• This style of leader uses a variety of approaches to meet the specific skill levels and
motivational needs of the team members.
Free - Rein Leadership
• This type of leader tends to adopt a policy of not ‘interfering’ with the group by letting
them run themselves. This method is generally only effective in highly specialised fields.
• Due to the lack of leadership, informal leaders tend to take control of the group and
conflicts often result.
• The group tends to drift and productivity is low.
• There are variations within this simple classification of leadership styles.
• Some autocratic leaders are seen as “benevolent autocrats”. Although they listen
considerably to their followers’ opinions before making a decision, the decision is their
own. They may be willing to hear and consider subordinates’ ideas and concerns, but
when a decision is to be made, they may be more autocratic than benevolent.
• A variation of the participative leader is the person who is supportive. Leaders in this
category may look upon their task as not only consulting with followers and carefully
considering their opinions but also doing all they can to support subordinates in
accomplishing their duties.
 Transactional and Transformational
Leadership
• A leadership style whereby the objectives and goals are predefined and the leader uses reward
and punishment to motivate his followers is known as Transactional Leadership.
• It focuses on improving the current situation of the organisation by framing the steps and
controlling the organisational activities.
• Prize and penalties are the two primary tools employed by the leader to inspire his subordinates
i.e. if an employee achieves the target within the stipulated time he is given initiative for his
work, whereas if the task is not completed within the required time, then he will be penalised for
the same.
• The style of leadership in which the leader uses his influencing power and enthusiasm to
motivate his followers to work for the benefit of the organisation is known as
Transformational Leadership.
• Here, the leader seeks the requirement for a change in the existing organisation
culture, gives a vision to his subordinates, incorporates mission and implement the
change with the dedication of his followers.
• In transformational leadership, the leader acts as a role model and as a motivator too
who offers vision, excitement, encouragement, morale and satisfaction to the followers.
The leader inspires his people to increase their abilities and capabilities, build up self-
confidence and promotes innovation in the whole organisation
THEORIES OF LEADERSHIP
THEORY X AND Y-
• Theory X and Theory Y were proposed by management theorist Douglas McGregor.
Both theories rest on the assumption that management is required to coordinate all
aspects of the value delivery process to be productive.

• As part of this theory, managers must be able to motivate employees. Importantly,

different types of employees are motivated by different sorts of rewards.
THEORY X-
• This approach assumes that some employees are lazy or not motivated by the work (in fact, they have
a distaste of the work), unambitious, avoid responsibility, is self-centered, indifferent about
organizational goals, and prefers to be directed.
• It calls on the leader to be proactive in managing the employees and allocation of resources.
• LEADER -motivate the subordinate through specific directives, closely supervise their efforts, and take
steps to motivate (through reward or punishment) accordingly.
• In other words, it is an authoritative style of management.
Theory Y
• Assumes that subordinates do not dislike the work, are self-motivated, can be creative, seeks
responsibility (leadership roles), and can be self-directed.
• Leaders must respond with a participative style of management.
• As such, threats of punishment are far less effective in motivating the employee.
• Also, the employee is committed to an objective that is based upon rewards - though they may
respond to different types of rewards.
• These types of employees generally respond better to rewards leading to esteem and self-
actualization. Management attempts to get the maximum output with the least efforts on their part.
Likert’s Management System
• Rensis Likert along with his associates studied the patterns and behavior of managers to
identify the leadership styles and defined four systems of management.
• These four systems are:
• Exploitative Authoritative
• Benevolent Authoritative
• consultative system
• participative system
Exploitative Authoritative System:
• In this type of management system- the responsibility lies with the people in higher
positions in the hierarchy.
• the subordinates are not involved in the decision-making process.
• The superior has no trust and confidence in his subordinate and imposes decisions on
him leaving no room for further discussions.
• communication flows downwards, i.e. from the superior to the subordinate and hence
there is a lack of communication and teamwork.
• The management is only concerned with the completion of work; it uses any means or
threats to get the work completed through the subordinates
Benevolent Authoritative System
• Like exploitative authoritative system, here also the responsibility lies with the people at
the upper echelons of the hierarchy and the only difference is that the motivation is
based on the rewards, not on fear and threat.
• The superior has that much trust and confidence in his subordinates which is required in
a master-servant relationship.
• the subordinates are given rewards for their participation and the communication may
flow upwards i.e. from subordinate to superior, but restricted to what the superior wants
to hear.
• Thus, in the benevolent authoritative system also, the subordinates do not feel free to
discuss job-related issues with the superior.
• This results in the lack of communication and a little teamwork
Consultative System:
• In this management system, the superior has substantial but not complete, trust and
confidence in his subordinates and constructively uses the views and opinions given by
them.
• Here, the motivation is based on rewards and the amount of the individual’s
involvement in the decision-making process.
• The consultative system is characterized by a great flow of information both horizontally
and vertically.
• The subordinates feel free to discuss job-related issues with the superiors and hence, the
upward flow of communication is more into the consultative system than a benevolent
system. But still, the decisions are made by the senior people in the hierarchy
Participative System:
• In the participative system, the management has full confidence in his subordinates
and encourages them to participate actively in the decision-making process.
• Here, the subordinate feels absolutely free to discuss any issue related to a job with his
superior.
• This system is characterized by a good teamwork and teams are linked with people,
who are the members of more than one team and such people are called as “linking
pins”.
• The subordinates get motivated through rewards for their participation in the decision-
making process
Managerial Grid
• Managerial Grid Robert Blake and Jane Mouton have developed the Managerial Grid,
also called as a leadership grid. According to them, the leadership styles can be
identified on the basis of manager’s concern for people and production. The
managerial grid identifies five leadership styles based on two behavioral dimensions.
• 1) Impoverished Management (1,1): The managers with this leadership style exert
minimum effort to get the work done by the subordinates. They have minimal concern
for both the people and production, and they function merely to preserve their jobs
and seniority. Therefore, the disharmony, dissatisfaction, disorganization arises within the
organization.

• 2) Task Management (9,1): Here, the leader is more concerned with the production
and lay less emphasis on the personal needs of his subordinates. This leadership style is
also called as a dictatorial or perish style, where the subordinates are required to
perform the task as directed by the superiors. In this leadership style, the output in the
short run may increase drastically, but due to stringent rules and procedures, there
could be a a high labor turnover.
• 3) Middle of the Road (5,5): The manager with this style tries to keep a balance
between the organizational goals and the personal needs of his subordinates. Here,
the leader focuses on an adequate performance through a balance between the
work requirements and satisfactory morale. Both the people and production needs are
not completely met, and thus the organization land up to an average performance.

• 4) Country Club (1,9): Here, the leader lays more emphasis on the personal needs of
the subordinates and give less attention to the output. The manager adopts this style of
leadership with the intent to have a friendly and comfortable working environment for
the subordinates, who gets self-motivated and work harder on their own. But however,
less attention to the production can adversely affect the work goals and may lead to
the unsatisfactory results
• 5) Team Management (9,9): According to Blake and Mouton, it is the most effective
leadership style wherein the leader takes both people and production hand in hand.
This style is based on McGregor’s Theory Y, where the employees are believed to be
committed towards the goal achievement and need not require manager’s
intervention at every step.The leader with this style feels that empowerment, trust,
respect, commitment helps in nurturing the team relationships, which ultimately results
in the increased employee satisfaction and overall production of the organization
CONTROL
◦ Controlling is one of the important functions of a manager.
◦ controlling means ensuring that activities in an organisation are performed as per the plans.
◦ Controlling also ensures that an organisation’s resources are being used effectively and efficiently for the
achievement of predetermined goals.
◦ Controlling is, thus, a goal-oriented function.
◦ Controlling function of a manager is a pervasive function.
◦ Managers at all levels of management—top, middle and lower-need to perform controlling functions to keep a
control over activities in their areas.
◦ Control-
“To determine the behavior or supervise the running of, to maintain
influence or authority over...to regulate...”, “to hold sway over, to dominate,
to command. To hold in check or repress one’s passions or emotions; so to
control one’s feelings, etc.”
◦ Control is the opposite of chance, but is also at odds with an excessive dependence on external factors.
It is related to the notions of command and regulation.
◦ By analogy, management control is an approach that enables a company to produce desired results
(generally expressed in terms of “performance”) by taking action to achieve those results and by dealing with
the dangers brought on by external difficulties (particularly those related to the market, competitors and
the economic or political context) and the internal difficulties of the organisation.
◦ In other words, management control can be defined as the process whereby a company sets itself
performance objectives and strives to achieve them as best it can over time. It is a method for managing
the performance of the company.
◦ Management control is an approach that is pursued over time: we situate ourselves both before the action, in
the planning phase, and after the action in the monitoring and analysis of results phase. The approach is
therefore progressive, which is why we speak of the control process.
Control cannot be reduced to a simple exercise of “verification”, because then we would be operating “after the
fact”, once the decisions and action had already been undertaken.

In such a case the scope of control would be confined to reactions rather than fully effective action.

In seeking to control the attainment of desired outcomes and results, it is essential to prepare the action, to
organise it, to perform simulations and to anticipate its consequences. The planning phase is therefore crucial.
◦ Controlling should not be misunderstood as the last function of management. It is a function that brings
back the management cycle back to the planning function.
◦ The controlling function finds out how far actual performance deviates from standards, analyses the causes
of such deviations and attempts to take corrective actions based on the same. This process helps in
formulation of future plans in the light of the problems that were identified and, thus, helps in better
planning in the future periods. Thus, controlling only completes one cycle of management process and
improves planning in the next cycle.
◦ Managerial Control implies the measurement of accomplishment against the standard and the
correction of deviations to assure attainment of objectives according to plans.
…Koontz and O’ Donnel
THE PREREQUISITES AND CHARACTERISTICS OF EFFECTIE
CONTROL SYSTEMS

◦ The major prerequisites of control are two:

• Plan
• Structure
a) Plan: Controls must be based on plan. The more clear and complete the plans are the more effective controls
can be; plans become the standards by which the actions are measured.
b) Structure: There is need for a structure to know where the responsibility rests for deviations and corrective
action, if any needed.
As in the case of plans, the more clear and complete the organisation structure is, the more effective control
can be.
i) Appropriate: Controls should correspond to an organisation’s plans. Controlling Controls
designed for a general manager are inappropriate for a supervisor. Similarly, control systems suitable
for a line department may be inappropriate for a staff department.
ii) Strategic: Control should serve a strategic purpose and provide spotlight on positive and negative
exceptions at critical points.
iii) Acceptable: Controls will not work unless people want them to. They should be acceptable to
those to whom they apply.
iv) Reliable and objective: Controls should be accurate and unbiased. If they are unreliable and
subjective, people will resent them.
v) Cost-effective: The benefit from control should be greater than the costs. Control devices should
yield tangible benefits.
 Importance of controlling
1. Accomplishing Organizational Goals
The controlling function is an accomplishment of measures that further makes progress towards
the organizational goals & brings to light the deviations, & indicates corrective action. Therefore it
helps in guiding the organizational goals which can be achieved by performing a controlling
function.

2. Judging Accuracy of Standards

A good control system enables management to verify whether the standards set are accurate &
objective. The efficient control system also helps in keeping careful and progress check on the
changes which help in taking the major place in the organization & in the environment and also
helps to review & revise the standards in light of such changes.
3. Making Efficient use of Resources Another important function of controlling is that in this, each
activity is performed in such manner so an in accordance with predetermined standards & norms so
as to ensure that the resources are used in the most effective & efficient manner for the further
availability of resources.

4. Improving Employee Motivation Another important function is that controlling help in

accommodating a good control system which ensures that each employee knows well in advance
what they expect & what are the standards of performance on the basis of which they will be
appraised. Therefore it helps in motivating and increasing their potential so to make them & helps
them to give better performance.
5. Ensuring Order & Discipline Controlling creates an atmosphere of order & discipline in the
organization which helps to minimize dishonest behavior on the part of the employees. It keeps a
close check on the activities of employees and the company can be able to track and find out the
dishonest employees by using computer monitoring as a part of their control system.

6. Facilitating Coordination in Action The last important function of controlling is that each
department & employee is governed by such pre-determined standards and goals which are well
versed and coordinated with one another. This ensures that overall organizational objectives are
accomplished in an overall manner
 Process of Control:
a) Establishing standards
b) Measuring performance against these standards
(c) Reinforcing success / correcting deviations.
 1. Establish the Standards:
◦ Within an organization’s overall strategic plan, managers define goals for organizational departments in
specific, precise, operational terms that include standards of performance to compare with
organizational activities.
◦ Standards mean criteria of performance. Standards may be of many kinds and include verifiable goals
set in qualitative or quantitative terms.
◦ An organisation can establish standards in such areas as-
• Profitability • Productivity • Market Share • Worker Performance • Innovation • Social Responsibility
◦ However, for some of the activities the standards cannot be specific and precise.Standards, against which
actual performance will be compared, may be derived from past experience, statistical methods and
benchmarking (based upon best industry practices).
◦ As far as possible, the standards are developed bilaterally rather than top management deciding
unilaterally, keeping in view the organization’s goals.
 2. Measure Actual Performance:
◦ Essentially, it is a comparison between “what is” and “what should be” the performance.
◦ Ideally, measurement should be done on a forward-looking basis to predict probable deviations from standards
rather than merely be used as a post mortem exercise.
◦ To the extent prediction becomes possible, control becomes effective because appropriate actions can be taken well
in advance of their actual occurrence.
◦ Most organizations prepare formal reports of performance measurements both quantitative and qualitative (where
quantification is not possible) that the managers review regularly.
◦ These measurements should be related to the standards set in the first step of the control process.For example, if sales
growth is a target, the organization should have a means of gathering and reporting sales data.
◦ Data can be collected through personal observation (through management by walking around the place where things
are happening), statistical reports (made possible by computers), oral reporting (through conferencing, one-to-one
meeting, or telephone calls), written reporting (comprehensive and concise, accounting information – normally a
combination of all. To be of use, the information flow should be regular and timely.
 c) Reinforcing Success / Correcting
Deviations:
◦ When plans and organisation structures are clear, it is easy to reinforce success and avoid failures.
◦ When deviations are noticed or apprehended based on warning signs, the reasons can be analysed and appropriate
corrective actions taken promptly.
◦ This step compares actual activities to performance standards. When managers read computer reports or walk
through their plants, they identify whether actual performance meets, exceeds, or falls short of standards.Typically,
performance reports simplify such comparison by placing the performance standards for the reporting period alongside
the actual performance for the same period and by computing the variance—that is, the difference between each actual
amount and the associated standard.
◦ When performance deviates from standards, managers must determine what changes, if any, are necessary and how
to apply them.
◦ In the productivity and quality-centered environment, workers and managers are often empowered to evaluate their own
work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step— corrective
action.
CONTROL AS A FEEDBACK SYSTEM
◦ Management control is usually viewed as a feedback system. This is seen more clearly by looking at the
process involved in control system
◦ Control is more than a matter of establishing standards, measuring performance and correcting for
deviations.
◦ To initiate corrective action, there should be a programme (or a plan of action) which needs to be
implemented and monitored as to whether such implementation will give the desired performance.
 Comparison of Measurement of
Identification of Actual
actuals against actual
deviations performance
standards performance

Analysis of
Program of Implementation Desired
causes of
corrective action of corrections performance
deviations
◦ In the simple feedback system there is a time lag in the control process. The old notion is to look at planning
as looking forward and control as looking backward.
◦ But good management requires future-directed control where it is Controlling possible to get feedback
somewhat ahead of actual happening than after the event.
◦ As Harold Koontz observed, “since the past cannot be changed, effective control should be aimed at
preventing present and future deviations from plans”.
◦ Computers make it possible now to get feedback on a real-tine basis, i.e., as of now or on a here-and-now
basis. Where there are time lags in a system, corrective steps should be taken on a proactive basis predicting
or anticipating efforts.
◦ As such, effective control systems should seek to overcome the deficiency of common or simple feedback
systems to be modified as ‘feedforward systems’. Feedforward systems monitor inputs into a process to
ascertain whether the inputs are as planned; if they are not, the inputs, or perhaps the process, are changed in
order to ensure the desired action.
◦ Controlling
◦ The process of measuring performance and taking action to ensure desired
results
◦ Has a positive and necessary role in the management process
◦ Ensures that the right things happen, in the right way, at the right time
◦ Benefit: Organizational learning (Example: After-action review)
TYPES OF CONTROL
◦ Controlling helps managers eliminate gaps between actual performance and goals. Control is
the process in which actual performance is compared to company standards. Comparing this
gives visibility to whether the activities are carried out according to the strategy.
◦ Recognizing that organizational controls can be categorized in many ways, it is helpful at this point to
distinguish between two sets of controls: (1) strategic controls and (2) management controls, sometimes
called operating controls (Harrison & St. John, 2002).
 Feedforward controls
◦ Employed before a work activity begins
◦ Ensures that:
◦ Objectives are clear
◦ Proper directions are established
◦ Right resources are available
◦ Goal is to solve problems before they occur
 Concurrent controls
◦ Focus on what happens during work process
◦ Monitor ongoing operations to make sure they are being done according to plan
◦ Goal is to solve problems as they occur
 Feedback controls
◦ Take place after work is completed
◦ Focus on quality of end results
◦ Goal is to solve problems after they occur and prevent future ones
Feedforward, concurrent, and feedback controls.
 Managerial Control
◦ Internal and external control
◦ Internal control
◦ Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations
◦ External control
◦ Occurs through personal supervision and the use of formal administrative systems

◦ Self-control
◦ Internal control that occurs through self-discipline in fulfilling work and personal goals and
responsibilities
◦ Bureaucratic control
◦ Influences behavior through authority, policies, procedures, job descriptions, budgets, and day-
to-day supervision
◦ Clan control
◦ Influences behavior through norms and expectations set by the organizational culture
◦ Market Control
◦ Influence of market competition on the behavior of organizations and their members
Control Tools and Techniques
1. Project management and control
2. Inventory control
3. Breakeven analysis
4. Financial controls
5. Balanced scorecards
 Control Tools and Techniques
◦ Project Management
◦ Overall planning, supervision, and control of projects
◦ Projects – unique one-time events that occur within a defined time period
◦ Gantt chart – graphic display of scheduled tasks required to complete a project
◦ CPM/PERT – combination of the critical path method and program evaluation and review technique
 Control Tools and Techniques
◦ Inventory control
◦ Ensures that inventory is only big enough to meet immediate
needs
◦ Economic order quantity
◦ Places new orders when inventory levels fall to predetermined points
◦ Just-in-time scheduling
◦ Routes materials to workstations just in time for use
 Control Tools and Techniques
◦ Breakeven analysis
◦ Breakeven point
◦ Occurs where revenues just equal costs
◦ Breakeven analysis
◦ Performs what-if calculations under different revenue and cost
conditions
Use of breakeven analysis to make informed “what-if ”
decisions
Basic foundations of a balance sheet and income
statement
 Control Tools and Techniques

◦ Basic Financial Ratios

◦ Liquidity
◦ The ability to generate cash to pay bills
◦ Leverage
◦ The ability to earn more in returns than the cost of debt
◦ Asset management
◦ The ability to use resources efficiently and operate at minimum cost
◦ Profitability
◦ The ability to earn revenues greater than costs
 Control Tools and Techniques
◦ Balanced Scorecard
◦ Factors used to develop scorecard goals and measures:
◦ Financial performance
◦ Customer Satisfaction
◦ Internal process improvement
◦ Innovation and learning
 Limitations of Controlling:
◦ Norms cannot be defined in quantitative terms:
Controlling loses its benefits where norms and standards cannot define in quantitative terms. The employee
morale, job satisfaction and human behaviour are some areas where the controlling system is not effective.
◦ Less control over external factor:
Any organisation is running in some of the other state of a country under the government policies which is
uncontrollable by an enterprise. And also no organisation can control technical discovery, a new discovery in
information technology and a big competitor enters the market etc.
◦ Objection from employees:
When a manager applies to control to his lower subordinate, some of his colleagues may object to doing
reporting according to the norms set by the manager or organisation. This usually happens due to over-
controlling or miss communication. For example, field staff might object when their location is tracked by GPS
or office staff are kept under CCTV surveillance.
◦ Very expensive to install:
To establish an effective Controlling system is very expensive because an organisation has to appoint different
level of managers. And some of the managers cost more to the company. Hence it is their moral responsibility
to justify the cost of the control system by surpassing their sales target.
◦ Over-controlling might increase the attrition rate:
◦ Although, controlling help to enhance various performance yet if overcontrolled the employee might
irritate and move to another company. In the current scenario, senior managers often call their
subordinates multiple time to evaluate their activities in the field. This might be irritating for the lower
subordinates especially in case of newcomers and hence leads to increase alteration rate of the
organisation.
◦
◦ Thus we have learned about Controlling Function of Management. We understood how
important is Controlling Function for any organisation without this no standards can be
implemented in a proper manner.
 EFFECTIVE CONTROL SYSTEM
Control is necessary in every organization to ensure that everything is going properly. Every manager,
therefore, should have an effective and adequate control system to assist him in making sure that events
conform to plans. However, control does not work automatically, but it requires certain design.
While the basic principles involved in designing a control system in organizations may be universal the
actual system in an organization requires some specific design.
In this tailoring of control system, there are certain requirements, which should be kept in mind.
◦ Reflecting Organizational Pattern:
The control should reflect organizational pattern by focusing attention on positions in organization
structure through which deviations are corrected. Organization structure, a principal vehicle for
coordinating the work of people, is also a major means of maintaining control.
Thus, in every area of control, it is not enough to know that things are going wrong unless it is known
wherein the organisation structure the deviations are occurring. This enables managers to fix up the
responsibility and to take corrective actions.
◦ Promptness in Reporting Deviation:
The success lies in the fact that it points the deviation promptly and takes corrective actions
immediately. Similarly, an ideal control system detects deviations promptly and informs the manager
concerned to take timely actions. This is done through designing good appraisal and information
systems.
◦ Simple:
Control system must be simple and understandable so that all managers can use it effectively. Control
techniques which are complicated such as complex mathematical formulae, charts, graphs, advanced
statistical methods and other techniques fail to communicate the meaning of their control data to the
managers who use them. Effective control requires consistency with the position, operational
responsibility, ability to understand, and needs of the individuals concerned.
◦ Objectives:
The control should be objective, definite, and determinable in a clear and positive way. The standards of
measurement should be quantified as far as possible. If they are not quantifiable, such as training
effectiveness, etc., they must be determinable and verifiable. If the performance standard and measurement is
not easily determinable, many subjective elements enter into the process, which catch the controller and
controlled on wrong tooting.
◦ Motivating:
Control system should motivate both controller and controlled. While the planning and control are necessary
for economical operations, researches in human relations show that planning and control are, more often than
not, antagonistic to good human relations. Sometimes, they may even tend to deprive the people in the
organizations one of man’s basic needs-a sense of powerful and worthwhile accomplishment the design of
control system should be such that aims at motivating people by fulfilling their needs.
◦ Economical:
Control should be economical and must be worth its costs. Economy is relative, since the benefits vary
with the importance of the activity the size of the operation, the expense that might be incurred in the
absence of control and the contribution the control system can make. The economy of a control system
will depend a great deal on the manager’s selecting for control only critical factors in areas important to
him.
If tailored to the job and the size of the enterprise, control will be economical. A large-sized organization
can afford highly complicated techniques, sophisticated tools of control and more elaborate system of
control, but a small-sized organization cannot afford these because of the cost factor.
◦ Forward Looking:
Control should be forward looking. Though many of the controls are instantaneous, they must focus
attention as to how future actions can be confirmed with plans. In fact, the control system should be such
that it provides aid in planning process. This is done in two ways – it draws situations where new
planning is needed, and it provides some of the data upon which plans can be based.
◦ Pointing out Exceptions at Critical Points:
Control should point exception at critical points and suggest whether action is to be taken for deviations
or not. Some deviations in the organizations have any impact while others, though very little in quantity
may have great significance. Thus, control system should provide information for critical point control
and control on exception.
The critical point control stresses that effective control requires attention to those factors critical to
appraising performance against an individual plan. The control on exception requires that a manager
should take corrective action when there is exceptional deviation. The more a manager concentrates his
control efforts on exceptions, the more efficient will be the results of his control.
◦ Flexible:
Control system should be flexible so that it remains workable in the case of changed plans, unforeseen
circumstances, or outright failures. Having alternative plans for various probable situations can provide
much flexibility in control. In fact, flexible control is normally achieved through flexible plans.