Controlling

Description
• Regulation of organizational activities in such
a ways as to facilitate attainment of goals
• Accomplishment of organizational goals is
made possible by confirming the employees
performance to organizational standards
• Controlling adjusts the employees behavior in
a way that channeled towards the pursuit of
organizational objectives.
• Two major pre-requisites must exist before
devising or maintaining systems of controls
• These are planning and a clear organogram
and have been explained earlier
• In proceeding sections these have been
presented briefly with reference to controlling
 Role of control
• Control plays an important role in the following
various organizational aspects in an organizations
1. Enabling authority decentralization
2. Ascertain performance
3. Enhance co-ordination
4. Detect irregularities
5. Cope uncertainties
6. Identify opportunities
 Enable authority
• Existence of control enable decision making at
lower level in an organization but still
maintaining a handle on progress
• The managers in an organization, afford more
liberty to decentralize authority in the
presence of adequate controls
 Ascertain performance
• The presence of control systems make it possible for an
organization to ascertain performance efficiency for
achieving its goals
• The purpose of control is to provide managers with an
assessment of matching the performance of an
organization with pre-set standards
• For example production department of a pharmaceutical
industry has a performance goal of manufacturing 10,000
bottles of syrup per day
• Falling of production to 8500 bottles is an indicative of
certain problems
• On the other hand, production of 10000 bottles manifests
production department is operating effectively
 Enhance co-ordination
• Adequate controls make possible to keep track
of various major elements of organization to
ascertain their synchronization
• Thus existence of control enhances co-
ordination in an organization
 Detect irregularities
• Controls help in detecting the wrongdoings
and unwanted irregularities such as quality
defects cost over runs or excessive personal
turn-over
• The detection of irregularities in time could
prevent the transformation of fairly
controllable minor problems into
unmanageable major ones
 Cope uncertainties
• Organizational goals are set for future events
through on the basis of best knowledge at the
time yet usually uncertainty arises and the
things do not go according to the plan always
• Controlling enables managers to monitor
specific activities and react promptly to
significant uncertainties or change in
environment
 Identify opportunities
• The things may go good or better than targets
or expected in various situations
• With adequate controls managers are able to
detect these situations and that can be altered
to possible future opportunities
 Controlling process
• Regardless of the type and number of control
systems needed by an organization, there are
the following general steps in any control
process.
 Determining areas to control
• High cost coupled with the employees
resentment on control of their every move,
make it impossible to control every aspect of
organization activities
• Thus deciding the major areas to be controlled
is necessary as first step in control process
• The decision of areas to be controlled is bases
on organizational goals and objectives
predefined during the planning phase
 Establishing standards
• A standard is a target or criterion against which subsequent
performance is compared
• Standards are selected points in a planning programme
where performance is measured as an indicative of how
things are going without watching every step in the
execution of plans
• Standards may be of many kinds
• Among the best are verifiable goals or objectives stated in
quantitative or qualitative terms, regularly set in well-
operated system of management by objectives
• The end result for which the workers are responsible are
the best measures for achievement of plans and thus
furnish excellent standards of control
• The standards of goals may be stated in
physical terms such as quantities of products
unit of services labour hours speed or volume
of rejections
• These may be expressed in monitory terms
such as volume of sales costs capital
expenditure or profit
• The standards may be expressed in verifiable
quantitative terms or in any other way that
can give a clear indication of performance
• The standards of pharmacy department in a
hospital may include the following
1. Minimum of 95%of patients will be served
within 10 minutes of their arrival at
pharmacy for getting their prescriptions
2. The waiting time for a patient will not be
more then 20 mins
3. Understanding of drug utilization will be
ensured by pharmacists to 100%of patients
 Measurement of performance
• Measurement of performance is a constant and on going
activity for pharmaceutical organizations
• Effective control has a valid mean of measuring actual
performance and an appropriate frequency of this
measurement
• When a manager is concerned with controlling sales, the
daily, weekly and monthly sales figures represent actual
performance of sales force
• For a production manager performance may be expressed
in terms of units expressed in terms of units produced
quality of output or units cost
• For employees performance may be measured in terms of
quality or quantity of output as well.
• It is not easy to measure quantitatively many
aspects of performance for a number of jobs
• For example, performance of a pharmacist in
research and development may spend years
working on a single project before any
meaningful accomplishment or a major
breakthrough
• Nevertheless, some indicators can usually be
developed to assess the performance in such
cases
• The scientist progress can particularly be
assessed by minute or close review of his
performance
 Comparing performance against
standards
• In this step, the measured performance is compared
against standards develop in step 2.
• Performance may be same, higher or lower of the standard
• Assume that each of the 3 sales managers of
pharmaceutical concern have a goal of increasing sales by
10 percent during the year.
• At the end of the year, one manager has increased sales by
9.9%, another by 9.3%and the third by 8.7%.
• It is management decision that each has met the standard
or not?
• For the most part, this is management decision that must
be based on many relevant factors to reason this failure.
• Although none of the manager has attained the precise
goal of 10%
• One was very close while another may have met with
unexpected competition from a new company
• The above mentioned and other relevant factors must
be considered
• Its is important that, comparison be made as often as
necessary
• For long run and high level standards, comparisons
may be appropriate on annual basis
• In other circumstances, much more frequent
comparisons are called for.
• A business with cash shortage may need to monitor its
on hand reserves on daily basis.
 Evaluation and actions
• Evaluation and action accordingly are the final
steps in control process. The performance is
evaluated by means of comparisons made in
previous step and then appropriate action is
taken.
• This evaluation draws heavily on managers
analytical and diagnostic skills. After
evaluation, any of the following actions is
usually appropriate.
• Maintenance of status quo
• Correction of deviation
• Standard modification
 Maintenance of status quo

• One response is maintaining the status quo or to do

nothing
• This action is generally appropriate when performance
measures more or less upto the standard
• Small deviations from standards do not require
corrective action or modification of standard
• If the standard for cost reduction in a year is 4 percent
and a firm has achieved a reduction of 3.99% it is
undoubtly on right track
• Maintenance of right quo is also indicated in the
situations when other options are not available not
feasible and not cost effective
 Correction of deviation
• The control process is completed when an appropriate
action is taken to correct a deviation from standard
• For a performance measured accurately with valid
means it is easier to correct deviations
• Managers know exactly where in the assignment of
individuals and groups duties the corrective measure
must be applied
• Correction of deviation is the point at which control
can be seen as a part of whole system of management
and can be related to other managerial functions
• Managers may correct deviations by
rewarding plans, modifying goals or by
exercising organizing function through
reassignment or clarification of duties
• Deviation may be improved by additional
staffing , better selection and training of
subordinates
• better leading the explanation of jobs or
more effective leadership techniques may be
other techniques for correction of deviation
from the standard
 Standard modification
• The final response to the outcome of evaluation is
adjustment of the standards
• The standards may have been too high or too low to
begin with
• This is apparent if large number of employees exceeds
the standards by a wide margin or if no one ever meets
the standards
• In other situations a standard that was perfectly good
when it was set may need to adjusted because
circumstances have changed
• Sometimes achieving a standard may consume too
many resources
• A sales increase standard of 10% may have to
be modified when new competitors comes on
the scene
• Given new market conditions, the old
standard of 10% increase in sale may no
longer be realistic
• The forth going discussion points to that some
standards are unrealistic themselves
• Sometimes, external conditions make
perfectly good standards unrealistic. In both
cases, the standards are to be re-adjusted.
 Control as a feed back system
• Managerial control is essentially the same
basic control process as that found in physical,
biological and social systems
• Many systems control themselves, through
feedback which shows deviation from
standards and initiates changes
• In other words, systems use some of their
energy to feedback information that compares
performance with standard
•

Process or Deviation
Inputs Outputs
operation detection

Correction process
 Forms of operation control
• There are three levels of control operated by
most organizations. These includes
1. Operational control
2. Organizational control
3. Strategic control
 Operational control system
• Operational control are primarily related to
the regulation of the process
• I can take one of three forms consisting of :
1. preliminary control,
2. screening control and
3. post action control
 Preliminary control
• Attempts to monitor quality and quantity of
financial, physical, human and information
sources before they actually become part of
the system.
• Thus it involves for inputs to ensure that these
meet standards necessary for transformation
process
• These are also called as steering control, pre-
control or preventive control.
• A pharmaceutical firm that hires only graduate
pharmacists at supervisor level after several
interviews and other selection criteria has
been satisfied to control the quality of human
resources entering the organization.
• Similarly organizations usually take steps to
control material inputs financial and
information resources as they enter the
system
• For example, some pharmaceutical industries
refuse to accept the raw materials of certain
origin.
 Screening control
• This is also called as yes-no control or
concurrent control.
• It involves regulation of ongoing activities that
is the part of transformational process to
ensure that they confirm to organizational
standards
• It relies on feedback process during
transformational process
• The decision regarding whether to continue
progress, take corrective action or stoppage of
action altogether is based on screening
control
• This in-process control helps preventing the
faulty outputs. For example number of
checkpoints is established along aerosol
assembly line for purpose of screening control
• As the product moves along the line, it is
periodically checked to ensure that all of the
components assembled so far are working
properly.
• The product is being controlled during the
transformation process itself.
• Screening controls are widely applicable and
useful in identifying the cause of problem, they
tend to be used more often then other forms of
control.
• All processes in pharmaceutical industry
require an effective screening control to
produce product of high quality
• Screening control in pharmaceutical sales is
important because it gives the basis for
modification of the course of action or
necessary steps to be taken if there are some
problems.
 Post-action control
• Monitors outputs or results of a process after the
completion of a transformation process.
• This final inspection is an evaluation of finished
drug products or output of a set of activities is
one of the example.
• In a pharmaceutical industry final inspection is
extremely important and must go parallel with
that of screening control
• Relying only on this control is useful in certain
situations such as when a product or service is
fairly simple and of routine
• If a product can be manufactured in only two
or three steps, post action control may be the
most effective control.
• This is also known as feed-back control or
output control
• Post action control in pharmaceutical industry
can be effective in two important ways
• It provide information for future planning
• For example, an unacceptably high defective
rate during a quality check of finished drug
product will suggest searching out the causes
and taking steps to correct them
• Post action control of an activity provides a
basis for rewarding employees performance
by recognizing the accomplishment of given
targets
 Organizational control system
• Various organizations practice different kinds
of control over their overall design and
operating system
• Two dominant forms includes
1. Bureaucratic control
2. Clan control
 Bureaucratic control

• It is characterized by formal and mechanistic

structural arrangements
• It is based on regulation through rules,
policies, supervision, budgets, schedules and
reward systems
• The goal of Bureaucratic control is to ensure
that personnel exhibits appropriate behavior
and meet performance standards
• Organizations with this kind of controls
depend upon strict rules concentrate on
ensuring that people meet minimally
acceptable levels of performance and have a
tall structure
• They focus their rewards on individual
performance and allow only limited and
formal employee participation in management
Characteristics Bureaucratic control Clan control

Means of control Rules, policies, and Shared goals, values and

hierarchy traditions
Source of control Mainly extrinsic Mainly intrinsic
mechanisms mechanisms
Job design Doing rather than thinking Both doing and thinking

Nature of duties Fixed Flexible

Organization structure Tall, top-down control Flat, mutual influence

Reward system Extrinsic intrinsic

Innovation Less likely More likely

 Clan Control
• It relies on values, beliefs and traditions,
organization culture, share and group interactions
to regulate employees behavior to facilitate
accomplishment of organizational goals
• This is characterized by organic and informal
structural arrangements
• Its goal is employee commitment to job
performance
• Accordingly it relies heavily on group standards, a
strong corporate culture and self control of
behavior
• Organizations using this approach are usually
relatively flat and encourage the shared
influence
• Rewards are often directed at group
performance and participation is wide spread
 Strategic control
• It is aimed at ensuring that the organization is
maintaining an effective alignment with its
environment and moving towards achieving its
strategic goals
• The implementation of strategy generally involves
five basic areas like structure, leadership,
technology, human resource and information and
control system.
• Thus it follows that strategic control focuses on
these five areas in order to ensure that strategy
has been and is being effectively implemented
• This control should be focused on extent to which
the above five areas of strategy implementation
are facilitating accomplishment of the
organizations strategic goals
• If they are not being accomplished, the
organization should respond in the same way as
with other forms of control I.e., maintain the
status quo.
• If on the other hand one or more of the methods
of implementation are inhibiting the attainment
of goals it should be modified.
• Consequently, the firms might find it
necessary to alter its structure, replace key
leaders , adopt new technology modify its
human resources or change its information
and operational control systems.
 An Adequate Control
• Adequate and effective controls are able to
work efficiently and are needed to help
managers making sure that events conform to
plans
• Adequate controls are specially tailored and
require the following
 Tailored according to plans and
positions
• All control techniques and systems should
reflect the plans they are designed to follow.
• Every plan, kind and phase of an operations
has unique characteristics
• The information's for assessing progress of
marketing program is quite different from
what are needed to check and production
plan
• In the same way, controls should be tailored to
positions in an organization.
• Control for sales department differ from those
from the finance department and those for
purchasing department
• A small business will need some controls differ
from a large business
• Some control techniques, such as budgets,
standard hours and costs and various financial
ratios have general application in various
situations
• However it should never be assumed that one of
these widely used techniques is completely
applicable in any given situation.
• Managers must always be aware of critical
factors in their plans and operations requiring
control and they must use techniques and
information suited to them
 Tailored to individual managers and
personalities
• Controls must be tailored to personalities of individual
managers
• Control systems and information systems are intended to
help individual managers carryout their functions of control
• Some people such as pharmacokineticistis like
presentation of their information in the form of complex.
Tablets of data, mathematical forms or computer printouts.
• The important thing is that people get and understand the
information they need.
• Thus the control system must be tailored to meet such
individual requirements and situations
 Point out exceptions at critical points
• A general type control can not effectively be
implemented always to all situations
• a control must be able to deal with
exceptional situations occurring during a
course of action
• such control plans allow the managers to
detect those areas where their attention is
required particularly
• It is however, not enough merely to look at
exceptions one must look for them at critical
points also.
• Small deviations in certain areas may have
great significance than larger exception in
other areas
• A manager e.g., might be concerned if the cost
of office labor deviate from 5 percent of the
allocated budget , but be unworried if the cost
of postage stamps derived from budget from
budgets by 20 percent.
• Consequently, the standard of exception
should be accompanied in practice by
principle of critical-point control.
• Certainly, more the managers concentrate
their control efforts on exception, the more
efficient their control will be
• The effective control requires that managers
pay primary attention to those things that are
most important
 Objective oriented
• To the extent possible, information provided
by control system should be objective.
• However, objectivity is not everything and
managers need to look for a realistic target as
well, when making decision.
• When a sales representative is marketing an
impressive sales every month, or when a
production manager is cutting cost
consistently, the managers should be pleased.
• However this increase in sales may be due to an offer
of unauthorized discounts, unrealistic guarantees
about product performance or promising an early
delivery
• Decreasing product quality or putting unreasonable
pressure on employees can cut production costs
• For obvious reasons, the techniques followed by
medical representatives and the production manager
may not be in the best interest of the organization for
long run.
• The control system should therefore provide objective
information to manager for the evaluation and action
• However manager must take appropriate precautions
in interpreting it.
• Objective standards can be qualitative, such as
labor or cost, hours per unit or date of job
completion
• The standards can also be qualitative, as in
case of training programe having specific
characteristics or tailored to accomplish a
specific kind of upgrading of personal quality
 Able to organization climate
• An effective control system must fit the
organization climate
• Climate of different organizations differ largely. In
an organization where people have given
considerable freedom and participation, a tight
control system may not work and will sentence
failure
• On the other hand if a superior who allows little
participation in decision making has managed
subordinates
• A generalized and soft control will hardly succeed
 Flexible in nature
• An effective control system itself must be
flexible enough to accommodate change
• Consider a pharmaceutical organization whose
diverse drug product lines require certain
number of different raw materials
• The companys inventory control system must
be able to manage and monitor current levels
inventory for all materials
• When a modification in product line alters the
number of raw materials required or when there
is any change in required quantities of existing
materials, the control system should be able to
accommodate this change
• If controls are unable to accommodate change,
entirely new control system will be needed
• Designing and implementing entirely a new
control system would be an unnecessary expense
• In production scheduling, the production
manager must be prepared for failures
occurred by the breakdown of machine,
power failure or illness of a key worker
• If the control system is too inflexible to
account for such difficulties, slow down even
through temporary, may impair control.
• Much flexibility in control can be provided by
various probable situations .
• Infarct, flexible control is normally best
achieved through flexible plans
 Cost effective
• Cost must be value their cost. Although this
requirement is simple, it is often difficult to
accomplish in practice
• The expense and benefits of a particular
control vary with importance of the activity
and size of the operation. Thus the economy
of the control is assessed by their cost to
benefit ratio.
• A limiting factor of control system, is their cost,
which in turn depends upon managers selecting
for control only critical factors in areas important
to them.
• If tailored to the job and the size of enterprise,
the control will probably be economical
• Control techniques and approaches are efficient
when they bring to light actual or potential
deviations from plans with the minimum
expenditure of costs.
 Able to lead to corrective action
• An adequate system discloses where failures
are occurring and who is responsible for them
• It will ensure that some corrective action is to
be taken
• Control is justified only if deviation from plan
are corrected through appropriate planning,
organizing, staffing and leading.
 Critical control points and standards
• The critical control point is a subtask of a
complex operation that can be used to
measure the success or failure of whole
operation
• The standards used to measure the success of
whole operation based on the critical points
are called critical control points standards
• Standards are the yardsticks against which
actual or expected performance is measured
• In a simple operation, control can be achieved
through a careful personal observation of the
work being done
• However, complex operations and those
requiring long completion times make the
personal observation of the performance for a
whole day unfeasible
• In such cases, a manager chooses critical
points for special attention and the watches
them to be sure the whole operation is
proceeding as planned
• With such standards, managers can handle
larger groups of subordinates and thereby
increase their span of management, with
resulting cost savings and improvements of
communications
• Different types of standards are as follows
 Physical standards
• They are non-monetory criteria measurable in
quantitative or qualitative terms. They may
reflect quantities such as labor per unit