Controlling Function of Management
Posted by Economist on Feb 26, 2009 • (0)
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 (Figure 19.1)
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:
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.
