Extended Meanings of 'Control'

The term control has acquired a variety of uses in our daily language. We speak, for example, of traffic control, arms control and pest control. It is evident, however, that in applying the term control to different situations, we are thinking of different kinds of actions. Thus, when we speak of traffic control, we are really thinking of traffic regulation; when we speak of arms control, we have in mind arms limitation; and when we are speaking of pest control, we mean pest eradication. A similar flexibility of use in the term control is to be observed in the manner in which it is employed in the context of business affairs. Control is used to describe key functions, such as production control, quality control and budgetary control. These functions, however, represent quite different types of activities; production control refers to the production process and the need to regulate that process; quality control implies the rejection of sub-standard work; and budgetary control is concerned with keeping expenditure within a firm in line with a budget plan.

The term control also may be given both a narrow and a broad definition. A narrow definition of control is associated often with the maintenance of standards and the imposition of penalties. The broad concept of control which is to be found in the literature of management science treats the term control as synonymous with management itself. In this sense, control embraces the various processes by which management determines its objectives, draws up plans to attain those objectives, organizes and supervises the operations necessary for the implementation of plans and appraises performance. Control also implies the investigation of deviations from planned objectives, so that performance levels may be brought into line with planned levels. Where necessary, plans and objectives may be changed to meet new circumstances.

One may subject the concept of control to a more complex theoretical analysis which suggests that both normative and descriptive theories of control may be developed. In either context, the crux of control is in measurement. Measurements are required in setting objectives as targets for plans, and since plans are directed towards the future, such measurements are based upon predictions. Prediction is an integral part of control, which in this sense contemplates a future course of action. A normative theory of control recognizes that numerous possible courses of action may exist, each requiring its own control procedure if a system is not to get out of control. Control theory in this sense is based upon what is known as the law of requisite variety which states that there must be at least as many variations in the controls to be applied as there are ways for a system to fall out of control. The following example illustrates this principle.

Example

A firm is experiencing a decline in sales and hence has cut back its level of production. Stocks of raw materials, however, are increasing because the purchasing function uses decision rules which are appropriate only for normal conditions, and is not scaling down its levels of purchases. Hence, the control system operating within the firm may be said not to be flexible enough to take into account abnormal circumstances, that is, it has not enough variety to cope with the range of situations with which the system is faced. To remedy this defect, two alternative steps are open to management; either new decision rules must be formulated for the purchasing function which take into account abnormal situations, or the purchasing function must be free to generate its own response to changing circumstances.

The law of requisite variety has important implications for the design of information systems. It implies that decision rules should be devised for making routine decisions. As we saw in Part 1, such decisions may be programmed, and as a result, they may be automated. On the other hand, where decisions involve judgement and experience, the law of requisite variety requires that enough information be provided so that the decision maker himself may generate appropriate responses.


Next - Payoffs From Accounting Methods

Read on: Motivation

This involves getting all the members of the organization to pull their full weight, and finding ways in which individual performance may be improved. When we study motivation, we are studying the influences on a human being and what affects his behaviour. For example, when we ask someone to perform a certain task which we know to be within his capability and experience and it is not done satisfactorily, this failure may well be the result of poor motivation rather than lack of ability.

Some motivating factors are basically biological or physiological and may be looked upon as natural or... see: Motivation