Controlling

Source of information: http://extension.osu.edu/~mgtexcel/Control.html

Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.

Performance standards come from the planning function. No matter how difficult, standards should be established for every important task. Although the temptation may be great, lowering standards to what has been attained is not a solution to performance problems. On the other hand, a manager does need to lower standards when they are found to be unattainable due to resource limitations and factors external to the business.

Corrective action is necessary when performance is below standards. If performance is anticipated to be below standards, preventive action must be taken to ensure that the problem does not recur. If performance is greater than or equal to standards, it is useful to reinforce behaviors that led to the acceptable performance.

Characteristics of the Control Process.

The control process is cyclical which means it is never finished. Controlling leads to identification of new problems that in turn need to be addressed through establishment of performance standards, measuring performance etc.

Employees often view controlling negatively. By its very nature, controlling often leads to management expecting employee behavior to change. No matter how positive the changes may be for the organization, employees may still view them negatively.

Control is both anticipatory and retrospective. The process anticipates problems and takes preventive action. With corrective action, the process also follows up on problems.

Ideally, each person in the business views control as his or her responsibility. The organizational culture should prevent a person walking away from a small, easily solvable problem because "that isn't my responsibility." In customer driven businesses, each employee cares about each customer. In quality driven dairy farms, for example, each employee cares about the welfare of each animal and the wear and tear on each piece of equipment.

Controlling is related to each of the other functions of management. Controlling builds on planning, organizing and leading.

Management Control Strategies.

Managers can use one or a combination of three control strategies or styles: market, bureaucracy and clan. Each serves a different purpose. External forces make up market control. Without external forces to bring about needed control, managers can turn to internal bureaucratic or clan control. The first relies primarily on budgets and rules. The second relies on employees wanting to satisfy their social needs through feeling a valued part of the business.

Self-control, sometimes called adhocracy control, is complementary to market, bureaucratic and clan control. By training and encouraging individuals to take initiative in addressing problems on their own, there can be a resulting sense of individual empowerment. This empowerment plays out as self-control. The self-control then benefits the organization and increases the sense of worth to the business in the individual.

Designing Effective Control Systems.

Effective control systems have the following characteristics:

1. Control at all levels in the business.

2. Acceptability to those who will enforce decisions.

3. Flexibility.

4. Accuracy.

5. Timeliness.

6. Cost effectiveness.

7. Understandability.

8. Balance between objectivity and subjectivity.

9. Coordinated with planning, organizing and leading.

Dysfunctional Consequences of Control.

Managers expect people in an organization to change their behavior in response to control. However, employee resistance can easily make control efforts dysfunctional. The following behaviors demonstrate means by which the manager's control efforts can be frustrated:

Effective control systems have the following characteristics:

1. Game playing —> control is something to be beaten, a game between the "boss and me and I want to win".

2. Resisting control —> a "blue flu" reaction to too much control.

3. Providing inaccurate information —> a lack of understanding of why the information is needed and important leading to "you want numbers, we will give you numbers".

4. Following rules to the letter —> people following dumb and unprofitable rules in reaction to "do as I say".

5. Sabotaging —> stealing, discrediting other workers, chasing customers away, gossiping about the firm to people in the community.

6. Playing one manager off against another —> exploiting lack of communication among managers, asking a second manager if don't like the answer from the first manager.

The article is represented in a shot version. You may find the original on the site: http://extension.osu.edu/~mgtexcel/Control.html