Ouchi and Maguire did a study on retail department stores, they found that the control mechanism in an organisation is not a limited, single-purpose process. They also referred to two independent forms of control:
- Behavioural control, which is based on direct personal supervision. Suits the needs of individual managers as it attempts to control subordinates in a single department. The use of this type of control is responsive to the needs of the tasks.
- Output control, this is based on the measurement of outputs and the results achieved from these outputs. This type of control is concerned with the entire business as a whole. It is used, as quantifiable business performance results are wanted, usually to find trends and to use for analysis.
Control is a very important part of management. Management control is a process for motivating and inspiring people to help achieve preset business goals. It is also used to find and correct errors by staff. There are different approaches to management control. The classical approach which emphasis is made on the structure of the organisation, lets Fayol describe control as “In an undertaking, control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established. It has for object to point out weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything, things, people, actions.”
The Human relations approach is to do with the importance of groups in the business and informal relationships. Control is seen to be a negative element of management. Writers such as Maslow and Herzberg gave their view through the human relations approach. Maslow’s Hierarchy of needs is very much associated with it, as individual goals are given importance not the general business objectives.
The Contingency approach is an approach, which states that there is no best structure. It depends on the contingencies of the situation. It is really saying that different situations call for different approaches. The writers on this approach include Woodward and Burns and Stalker, with their characteristics of mechanistic and organic organisations. The last approach is the Radical approach, people associated with this approach include Braverman and Marx. These views were very extreme, and had a political direction.
A control system is the process, which directs and guides the organisation to its desired goals. This is done by collecting information and comparing it to the desired state. A management control system implies that the organisational control is done through managers.
There are five main elements to a management control system, they include planning what is desired. This involves getting people to know what is expected from them. Their objectives are set through this means. Establishing standards of performance, which can show their level of success. Monitoring actual performance, requiring feedback. It has to be accurate, as comparison with the plan will have to be made. Comparing actual achievement against the planned target. This is the analysis aspect of the process, and the conclusions are given back to the managers who started the process. Rectifying and taking corrective action. This only happens when there are problems, which need to be looked at. Action is taken when objectives are not met, and further analysis is made to give reasons why the targets have not been met.
In an ordered and a well controlled business productivity is usually increased. This has been seen through the adoption of Japanisation in many western companies. Control systems should make business actions more efficient, because problems such as two members of staff are doing the same job, will not happen. These types of mistakes could have a knock on effect on other business activities so control must be exercised.
Control systems help management know what is happening, and what should be happening. Through span of control, which is the number of subordinates reporting directly to a particular manager. Managers can find out exactly what is going on down to the shop floor. These small details are all very important in a continually improving system.
The process like the management control system is quite simple, and these steps can be repeated as many times as is needed. Critical analysis can be made through these systems easily. Which makes it able to rectify the problems, and seeing if they have worked by repeating the same process again.
Control systems can help motivate staff, as they know they are part of a big strategy which can help them work better for themselves and the company. Some people work better when they know where and how they are going wrong, because they want to be as productive as possible especially if they are rewarded through fringe benefits and other such bonuses.
Delegation can take place more easily when there is some sort of control system in place. It is much more organised, and would be structured better, than just telling someone to go and do a certain little task. Empowerment and Problems for staff to solve become easier to start, which is linked to motivation (McGregor’s Theory-Y).
Controlling the recruitment of staff, so that the ones who best fit the job as well as the culture of the company are employed. This is part of the Theory-Z organisational style. Their training would be monitored so that they can work effectively for the company, with the business knowing exactly what they are being taught, thus able to do for the company.
Budgetary control systems can get everyone in the business involved, through managers to the shop floor workers. They are all focused on one thing, so they would have to work as a team to achieve a certain financial target. This could also be another motivating factor, which would affect everyone across the companies’ hierarchy.
Sometimes working in groups can be a de-motivating factor. Working with machines caters for this. For example, workers in a supermarket scanning at a checkpoint, they are set targets for how many scans per hour. If they reach this they would be rewarded. This coincides with control through reward and punishment (McGregor’s Theory-X).
Limits of control systems include the whole de-motivating factor. This is because people generally don’t like being controlled, they would prefer some sort of autonomy involved in their work. Control over behaviour is generally resented by subordinates. A good control system should be accepted willingly by subordinates, however if it were a badly run one, then there would be attempts of non-compliance by those subordinates, which are involved. Control systems may not suit the culture of the business, it also may not be needed in certain areas. If it was put into the wrong place it could upset other procedures and systems already in place.
Subordinates following rules and procedures through organisational control systems achieves predictability and stability. This has a knock on effect on the ability to follow changes. It is generally thought of that lower down employees find it difficult to incorporate change in their operations. However change in organisations of any sort is hard for all the people involved normally.
Bibliography
Management and Organisational Behaviour, Mullins, 5th Edition, Financial Times Pitman Publishing.
Management Control Systems, Anthony, Dearden, Bedford, 5th Edition, Richard D. Irwin Inc.
