Control

In their discussion of 'control', some writers make no distinction between 'planning' and 'control', thereby giving a much wider meaning to their concept of control. We shall discuss the extended meaning of 'control'. For the purpose of our own analysis of the management process, we propose to make a distinction between 'planning' and 'control'. This distinction enables us to examine the management process as a cycle of activities.

The decisions involved in this area stem from two main activities, first, comparing actual performance against that stipulated in the plan, and, second, determining whether the plan itself should be modified in the light of this comparison.

Control is closely linked to the planning function in that its purpose is to ensure that the firm's activities conform to its plans. It is effected by means of an information feedback system which enables performance to be compared to planned targets. control is essential to the realization of long and short-term plains, mid-range planning, information feedback enables management to assess what progress has been made towards the realization of the long-range objectives specified in the long-range plan. Additionally, it allows management to review long-range objectives in the light of new circumstances which may have rendered those objectives unrealistic.

In practice, by far the greatest emphasis is attached to the control of operations so as to meet the objectives contained in the annual budget which, as we noted earlier, should be seen as part of the long-range plan. Information feedback is an integral part-of budgetary control procedures.

Their aim is to highlight deviations from the budget plan as soon as possible so that remedial action may be taken immediately.

A pre-requisite to the successful performance of the control function is an efficient information system which will reveal the need for corrective action at an appropriate time, enabling managers to judge whether their targets are still appropriate as the environment changes month by month and year by year. The control function is closely linked to the planning function by means of a feedback system which provides information on the results of past decisions. Such a system is necessary to the assessment of the quality of the decision-making process and to its improvement.

The feedback-system provides the great bulk of analytical information used in the planning process. It provides a means also of evaluating planned objectives. Should, for example, the economic climate change, the efficiency of the organization's operations will depend on the swiftness of its reaction to this change by way of alterations to the planned objectives. The feedback system is also instrumental to the making of control decisions for it provides a means of continuously assessing current performance against the strategic plan. Decision making in this sense thus involves making day-to-day adjustments to changing conditions in order to map out the most appropriate course of action needed to implement strategic decisions. Thus, information is the life-blood of any system, and the responsibility for the design of adequate information systems is of paramount concern to management.


Learn More About The Treatment of Overheads

Read on: Organizing

Organizing involves setting up the administrative structure for implementing strategic decisions. The administrative design area is therefore concerned with establishing the structure and the shape of the firm or organization, and defining responsibilities and lines of Publisherity. It involves a definition of the tasks necessary to achieve strategic goals, determining who is to perform these tasks and assigning responsibility for their performance. The function of organizing is to co-ordinate these tasks in such a way that the organization is able to work efficiently in fulfilling its objectives. The process... see: Organizing