The process of control, and what a good control system needs

Meaning of control

Controlling means checking what subordinates do and correcting it, so that events turn out as planned: performance is measured against goals, shortfalls are found and remedial action is taken. Planning supplies the standards that control works with; without a plan there is nothing to control, and without control a plan has no follow-through.

The process of control

Control runs through a fixed sequence of steps, each depending on the one before it.

1. Setting performance standards. Standards are the yardsticks of performance. They may be quantitative, such as cost, revenue, units or time, or qualitative, such as goodwill or employee motivation; precise figures make later comparison easier, and standards should be revised when conditions change.
2. Measuring actual performance. Performance is measured objectively and reliably, preferably in the same units as the standard, through personal observation, sample checks or performance reports, and where possible while the work is in progress.
3. Comparing performance with standards. The comparison reveals the gap between actual and desired results.
4. Analysing deviations. The manager fixes an acceptable range of deviation and concentrates on key result areas (critical point control) and on deviations that exceed the permitted limit (management by exception). The cause of each significant gap, such as an unrealistic standard, a defective process or a shortage of resources, is then identified.
5. Taking corrective action. No action is needed within the acceptable range. Beyond it, especially in important areas, the manager acts at once, for example by training staff or adding workers; if a deviation cannot be corrected, the standard itself may need revision.

A courier hub in Gurugram that promises same-day delivery shows the cycle: the standard is a delivery by 6 pm, scans measure each parcel, late parcels are compared with the target, the cause (say, a short-staffed evening shift) is traced, and an extra shift is added.

Prerequisites of a good control system

1. Objective standards. Whether a subordinate is doing well should not rest on personal opinion; objective standards and up-to-date measurement make control fair and accurate.
2. Attention to exceptions at critical points. The system should flag which deviations matter, so that managers spend their effort where it counts.
3. A look ahead. Since there is a time lag between measuring and correcting, the best controls warn in advance that a problem is coming.
4. Flexibility. Controls must stay workable when plans change or the unexpected happens; a flexible budget that adjusts to actual sales is the classic case.
5. Action, not just reports. A sound system shows where things are going wrong and who is responsible, and ensures that correction follows.
6. Economy. Controls must be worth what they cost, revealing deviations at the least expense.
7. Fit with plans and positions. Each plan and each departmental head needs controls designed for that plan or post.
8. Fit with the individual manager. Information must reach each manager in a form he understands and will use.

Conclusion

Control closes the loop that planning opens. Its process moves from standards to correction, and it succeeds only when the system is objective, selective, forward-looking, flexible, economical, action-oriented and suited to the plan and the manager using it.