Directing and Controlling

Learning Objectives

0 Define the term directing.0 Describe the nature of directing.0 Define the term leadership.0 Understand the importance of leadership.0 Describe different leadership styles.0 Define motivation0 Understand importance of motivation.0 Describe Maslaw’s theory of needs0 Explain Herzberg’s theory0 Understand theory X and Y0 Compare different theories of motivation.0 Define the term communication.0 Describe the importance of communication in an organization's.

0 Understand different types of communication.0 Understand the need of coordination.0 Describe the importance of coordination.0 Describe different techniques of coordination.0 Define controlling0 Understand the importance of controlling0 Understand controlling process.0 Describe essentials of controlling.0 Describe methods of controlling.

Introduction

0Directing is important function of management. Implementation of organizational plans starts from this function.

0Directing guides people and motivates them to perform there work well.

0Thus it is a managerial activity which requires leadership skills to provide direction to the subordinates and make them to work towards realization of organizational goals.

Definition of Directing

0 Directing is defined as telling people what to do and seeing that they do it to the best of their ability.

0 Directing is that function through which managers gets the work done from others.

0 Directing function consists of issuing orders and instructions, guiding and helping subordinates to perform tasks assigned to them , motivating them by designing a good work environment and providing rewards in line with their expectation and performance.

0 Directing involves three important components namely communicating, leading and motivating.

Leadership

0 It is the ability to influence people towards accomplishment of goals.

0 It is the ability to influence behaviors of others and direct them towards achievement of group or organizational goals.

0Thus most important features of leadership are:

0 Leaders possess great influential power.0 Leaders have followers and they influence the behavior of

followers.0 There is a reciprocal relationship between leaders and followers.0 Leaders have a great vision for future.0 Leaders create shared vision among followers and direct them to

work towards the achievement of common goals.0 Leaders are sensitive towards the needs of followers and they

motivate followers.0 situational and effectiveness of leaders is influenced by

situational variables like environment, interpersonal relationship, job content, group relations, size of group, group norms etc.

Importance of Leadership

0Leadership is the most important component of managing process.

0A manager can be efficient and effective only if he is a good leader.

0Significance of leadership quality in managers can be understood by the following discussions:

Leaders guide and inspire subordinates

0Motivate their followers0Guide them to accomplishment of group goals which

inturn contributes to the accomplishment of organizational goals

Leaders build good work environment

0Create a work environment in which employees can contribute by performing to the best of their abilities.

0Creates a relationship based on trust.

Leaders build confidence in followers

0Leaders recognize abilities of their followers and encourage them to develop to their potential by building confidence in them.

Leaders secure cooperation from the group

0 Influence the group members in a such a way that all the members work collectively towards group objectives

Leaders act as change agents

0Organizations operate in an environment which is subjected to continuous changes, and if the organizations do not respond to these changes then survival of the organization may be difficult.

0 It requires great leadership to reduce the resistance to change and convince the employees to accept the change.

0Thus leaders acts as a change agents of the organization and helps in implementing successful positive changes in the organization.

Leaders are the representatives of the followers

0Always take personal interest in helping their followers and protect the interests of followers while taking any major organizational decisions.

Leaders develop great vision

0Leaders are known for their great vision and they develop the vision for building great organizations.

Managers and leaders

managers leaders0 Managers position is based on

formal authority defined by organizational structure.

0 Manager gets the things done by subordinated by exercising their authority.

0 Managers are rationale in their decisions

0 Managers execute plans implement them and produce results.

0 Managers exercise positional power.

0 Leaders position is based on their personality and it is not formally defined.

0 Leaders inspire their followers and make them work towards common shared objectives.

0 Leaders are visionary0 Leaders inspire followers

articulate vision and motivates them to achieve common objectives.

0 Leaders exercise personal power.

Types of leadership

0Autocratic or Authoritarian Leadership0Democratic or Consultative Leadership.0Participative leadership.0Laissez Faire or Free Rein Leadership.

Autocratic or Authoritarian Leadership0Own decisions are made without consulting followers

0Simply order the followers and this orders are to be obeyed by followers.

0Leaders make use of their authority to enforce discipline and obedience among followers.

0Discipline is enforced by using rewards and punishments.0Decision making is completely centralized and followers

cannot have any influence on decisions.0This type of leadership is also called as dictatorship.

Communication is only one way and it always flows in the form of instructions and orders from leaders to followers or subordinates.

Merits and demerits

0Merits0 Quick decisions are made0 Leaders get the work done by making use of fear of

punishment and rewarding power.0 Leaders enforce strict discipline among the followers0 Consistent decisions are made.0 Suitable when subordinates are inexperienced and need

direction from leaders

0Demerits0 Low motivation among subordinates0 No scope for development of subordinates as they are merely

allowed to work as per the instructions of the leaders0 One way communication may result in misunderstanding.0 Too much dependence on leadership0 Subordinates may develop rebellion against leaders.

Democratic Leadership or consultative leadership

0Consult their followers before making any decisions0Try to take decisions according to the interest of their

followers0Leaders do not completely dominate the group and

provides freedom to group members and thus it results in two way communication.

Merits and demerits

0 Merits:0 Motivates people as they are consulted before decisions are

made.0 Group members get an opportunity to express their ways.0 Interests of followers are protected.0 Better productivity.

0 Demerits:0 Decision making is slow0 Maintaining absolute discipline is difficult.0 Suitable only when subordinates are more matured0 Decisions may get diluted.

Participative Leadership

0Decisions are made jointly by followers and leaders.0Decisions are based on common interests of all the

parties involved.0Subordinates get an opportunity in decision making

and use of their expertise.

Laissez Faire or Free Rein Leadership

0Free rein leaders do not lead the group but leaves the followers with complete freedom.

0Subordinates can set and develop their own plans.0The role of the leader is only to give advice when ever

it is necessary.0Leader do not exercise any control over followers0This type of leadership may not be suitable in all

situations and it requires subordinates who are knowledgeable, well trained and highly self motivated.

Merits and demerits0Merits

0 Can bring high motivation among subordinates0 Brings in innovation and creativity.0 Highly flexible.0 Open and direct communication0 Develops managerial skills among subordinates

0Demerits0 Lack of control0 Needs highly matured and knowledgeable subordinates.0 Individuals goals may get more importance than the group

goals.

Lickert’s System 4 management

0Rensis Lickert developed four models of management popularly known as systems of management and these managements are based on management philosophy of managers which identifies the leadership style.

System 1: Exploitative- Autocratic

0He exhibits autocratic style and unilaterally decides everything and subordinates are to merely follow the orders and instructions without questioning

0 It is also called carrot and stick approach- punishing those who do not obey the orders, and rewarding those work as per the instructions

System 2- Benevolent Autocratic

0They allow some freedom to subordinates to work within certain limits.

0Decision making is centralized but while making decisions manager is more responsive to the basic needs of subordinates.

System 3- consultative

0Managers consult the followers and discuss with them before decision making.

0Two way communication is established0This style accepts the importance of human factor in

leading and thus treats employees as assets and all decisions are made taking into consideration of all the employee opinions.

System 4- democratic

0Managers are very friendly, create cordial relations with their subordinates and subordinates are allowed to make active role in goal setting and decision making.

0 managers acts as guides and subordinates are allowed to take greater responsibility.

Qualities of good leaders

0 With respect to personality traits0 Intelligence: leaders are expected to possess more intelligence than their

followers 0 Character: leaders must be known for their integrity and sincerity.0 Inner drive: leaders must be self starters and they must have drive or

initiative for accomplishing the goals.0 Will power: must have courage, confidence and strength to act even in

difficult situations0 Judgment: a good leader must be capable of making sound judgment.0 Sensitive towards followers: must be capable of understanding the needs of

followers and respond accordingly. 0 Energy: leaders must possess mental and physical energy and stamina to

withstand strain.0 Emotional stability: leaders must possess capable of keeping their emotions

under control.

0 Knowledge and ability:0 Education: a business leader should have educational background

related to his functional areas.0 Technical competence: leader must be technically competent

capable of training his followers and capable of making right decisions.

0 Training ability: a good leader should also be a good trainer or good teacher to train his followers

0 Skills:0 Decision making skills: a good leader should possess decisiveness.

He must be capable of making right decisions at right time.0 Problem solving skills: must be capable of understanding

problems analyzing them and finding right solutions.0 Human relation skills: he must be capable of understanding

human behavior and developing good interpersonal relations.0 Conceptual skills, administrative skills and communication

skills

Leadership theories

0Several management scientist and psychologists have conducted investigations on successful leaders, to identify the factors influencing success of a leader.

0These investigations have resulted in proposal of several theories on leadership.

0Leadership theories can be broadly classified into three categories:0 Trait theories- personality traits0 Behavioral theories-effective behavior of leaders0 Situational or contingency theories- situational factors

Trait theories0 Based on personality traits of leaders0 Personality traits are key for success for any leaders0 Some of the leadership traits are listed below:0 Intelligence0 Vision0 Initiative0 Decisiveness0 Integrity0 Maturity0 Need for achievement0 Human relation skills0 Broadmindedness0 Environmental sensitivity

Criticism of trait theory

0Even though trait theory attempts to identify traits of successful leaders, it fails to explain leadership phenomenon, due to some limitations. These limitations are:0 There are many personality traits of leadership and all

these traits cannot be found in all successful leaders.0 There are no universal traits which can make leaders

successful in any situations at any part of the world.0 It is difficult to measure traits.

Behavioral theories

0Focused on behavior exhibited by leaders0 It proposes that there are specific behaviors which

differentiate leaders from non leaders0These behaviors can be learned and hence leaders can

be developed through training.0Some of the popular behavioral theories are discussed

below:

The Michigan studies

0 Researchers in University of Michigan conducted extensive survey on American leaders to identify successful leader behaviors.

0 Based on research two leadership styles where identified. They are:

0 Production centered leaders: 0 these leaders believes that employees are just tools of

production process. They supervise employees very closely. 0 They use position power for influencing followers and also

rewards and punishment are used as tools for influence. They are more oriented towards task and ignore anything which is not related to task.

0Employee centered leaders: 0 These leaders believe that it is necessary to create a

supportive work environment in order for workers to be successful in helping the company meet its goals

0 The leader is concerned with giving employees an opportunity for advancement and growth.

0 Leader is more concerned with developing better interpersonal relations with subordinates and motivates them to work towards organizational goals.

0 Employee well being is taken care by the leaders.

The Ohio State University Studies

0Similar to Michigan state University studies, Ohio State University studies identified two leadership behaviors called initiating structure and consideration.

0 Initiating Structure: 0 This component of leadership behavior focuses on

degree to which leader defines his own role and the roles of subordinates in terms of achieving goals use of job descriptions in telling employees what is expected out of them, how they should do the job and so on.

0Consideration:0This behavior focuses on interaction with followers.0The degree to which a leader builds mutual trust with

followers, respects their ideas and shows concerns for their feelings

0This style encourages friendship, mutual trust, warmth between leaders and followers.

Fiedler’s Contingency theory of leadership

0Fred Fiedler developed popular contingency theory of leadership.

0According to Fiedler the success of a leader depends on use of appropriate style suitable to the given situation.

0The theory is explained below in three steps:

Identifying leadership style

0 Fiedler used a concept called LPC- Least preferred coworker for identifying style of a leader.

0 Least preferred coworker means a worker whose productivity is very low and no manager would like to have him in his team.

0 Fiedler selected few such workers and asked managers to rate them on few attributes.

0 The total score obtained for all the attributes is called LPC score.0 Fiedler identified leadership style on the basis of total score given

by manager for least preferred coworkers.0 If the score is high then manager is employee oriented as he is not

ready to give up even an under performer.0 If the score is low then style is task oriented.

Identifying situation

0Fiedler defined three components to identify leadership situations.

0Three components are:0 Leader member relations: refers to the relation

between leaders and followers0 Task structure: refers to the extent to which task is

defined, clear defined procedures, clarity of responsibility.

0 Position power: refers to the degree to which a leader has authority over rewarding or punishing his subordinates

Matching style and situation

0Fiedler found that success of a leader depends on matching correct style for a given situation. He found that oriented leaders are successful in favorable situations because everyone gets along, the task is clear, leader has power and leader can take charge and provide direction.

Transactional and transformation leaders

0Transactional leaders

0 Task control0 Focus on short tem

goals0 Highly practical0 Look for tangible goals0 Set standard work

practices

0Transformational leaders0 Envision a new future0 Long term objectives0 Empower employees0 Model behavior0 Change agents0 Independent0 inspirational

motivation

0The word motivation is derived from the word motive which means any idea or need or force which puts an individual into a specific action.

0Motivation is the process of stimulating people to action to accomplish desired goals.

0Motivation represents inner drive within an individual which directs him to behave in specific way

Relation between motivation and needs

Importance of motivation

0Highly motivated workforce is absolutely essential for any organization to achieve its objectives.

0The importance of motivation can be appreciated by understanding the following contributions:

0Management basically aims at optimum utilization of various resources of an organization. These resources are human resources, financial resources and physical resources. Only motivated employees can effectively convert financial and physical resources into useful products and services.

0Motivation results in desirable behavior of employees. These behaviors are essential for implementation of organizational plans successfully.

0 Individuals may possess abilities or skills to perform a task effectively and efficiently. But translation of these abilities into actual performance will depend on their willingness to do the task. This inturn will depend on his or her motivation.

0Managing human resource is very complex and managers must maintain good interpersonal relations with the employees. Employees must be provided with attractive rewards, growth opportunities and good work environment. All these factors are related to motivation.

0Organizations benefit from stable workforce as experience gained by the employee will remain with the organization. Motivation is an important factor which contributes to employee retention and building a stable workforce.

0Motivation brings down number of employee grievances and complaints.

0Highly motivated workforce can produce best quality of products and services.

Theories of motivation

0There are several theories of motivation. Each theories of motivation describes how human beings can be motivated and the factors influencing motivation.

Maslow’s Hierarchy of needs theory

0Abraham Maslow developed the needs theory. 0According to Maslow motivation of an individual

depends on his or her individual needs. These needs operate along a hierarchy and once a lower level need is satisfied, individuals would like to satisfy next higher level need in the hierarchy.

0Maslow identified five needs. These needs are discussed below:

Physiological needs

0These are the basic needs which are required for survival of an individual. These needs are basic needs which are essential for human life and they include needs like food, shelter, clothing, air, water etc. A job with a salary can satisfy these needs.

Safety and Security needs

0After satisfying physiological needs people will look for safety and security. These are needs related to protection from any physical or emotional threat. These needs can be satisfied by the secured jobs, insurance, retirement benefits etc.

Social needs

0People would like to develop friendship with others, being affectionate towards their friends and family members etc . In an organizational context social needs can be satisfied through friendly colleagues informal work groups, unions etc.

Esteem or status needs

0Esteem needs are needs related to self-confidence, recognition, appreciation, status in society. In organizational context these needs are satisfied with promotion to higher level, better job title, recognition for achievements etc.

Self-actualization needs

0These are the needs related to realization of one’s own potentials for continuous self development, and reaching the position one aspiring for in his or her life.

0According to Maslow the needs follow strict hierarchy.0Maslow called first two needs physiological and safety

needs as lower level needs or primary needs. The next three needs are called secondary of higher order needs.

0Maslow advocates that to motivate individuals, manager has to identify the current hierarchy level at which an employee is operating and managers must provide an opportunity for satisfying those needs.

Limitations of Maslow’s theory

0 It has been found that needs not be along the hierarchy as proposed by Maslow. For example individuals who are not able to satisfy their lower level needs may be already operating on higher level needs.

0 It is also found that needs priority vary from country to country. For example it is found that esteem needs are more important for workers in Spain and Belgium than security needs.

0 Individuals behaviors may be directed at multiplicity of motives and thus Maslow’s argument that one need is satisfied at a time is not valid.

Herzberg’s Hygiene Theory

0These theory is also known as two factors theory.0He surveyed 200 executives in different companies

which included engineers and accountants.0Based on his research Herzberg found that job

satisfaction and job dissatisfaction are completely different and distinct. He found that factors leading to job satisfaction are different from factors leading to job dissatisfaction and hence they are not related to each other.

Herzberg found two distinct factors leading to job

satisfaction and dissatisfaction0Hygiene factor: related to job dissatisfaction. Presence

of these factors eliminates job dissatisfaction among employees. But it does not mean that they are satisfied and motivated.

0But since employees are not dissatisfied they may continue to work in the organization and hence hygiene factors are also called as maintenance factors.

0Hygiene factors include company policies, relationship with supervisors, pay, job security etc.

0Motivators: motivators are related to job satisfaction and presence of motivation results in job satisfaction and higher motivation which leads to productivity.

Theory X and Y

0Douglas McGregor Proposed theory X and Y.0According to Douglas managers hold two sets of

assumptions about their subordinates. Managers assume that their subordinates belong to either of two categories called category X and category Y.

Theory X assumptions

0Employee inherently dislike work and will try to avoid it.

0Since employees dislike work and try to avoid it they must be threatened with punishment to get the work done and they must be closely monitored and controlled.

0Employes do not like to take responsibilities and always like to seek formal direction.

0Employees place job security above all and display very little ambition.

Theory Y assumptions

0Employees like work just like play and rest0People are capable of excersing self direction and self

control if they are committed to work.0Employees at all levels are capable of taking up any

responsibility.0Decision making ability is widely spread across

population and people at lower level are capable of making creative decisions.

Communication

0Communication is the process of transmission of information or message from person to another.

0 It involves exchange of facts, ideas, feelings etc. between two or more individuals.

0Communication is the most important component of directing function.

Process of communication

The source or sender or communicator

0Sender is the person who has an intended message to convey to some one.

0He has the purpose of communicating information or message to one or more persons.

Encoding

0Encoding means putting message into a code. 0Encoding is the process of translating message into a

form which can be understood by the receiver.0 It can be in the form of oral, written or symbols.

Medium or channel

0Channel is carrier of communication. 0For example air is the medium for oral

communication. 0Message can be communicated through any media

like written form, telephone, TV etc.

Decoding

0 It is the process of finding the meaning for the coded message. It is the means of translating into a medium which can be understood by the receiver.

Receiver

0Receiver is the person who decodes the message and interprets it.

Feedback

0Feedback is the reaction of the receiver.0Feedback enables the communicator to know whether

the message is reached and understood by receiver.0 It helps in checking the effectiveness of

communication and makes it a two way process.

Types of Communication

0Formal communication 0Informal communication

Formal communication

0Formal communication is officially accepted communication in the organization and it uses official channel for transmitting messages.

0 It follows official route for flow of communication between various people in the organization.

0Commands, instructions, orders flowing from people at different levels, requisitions from lower level to higher level etc. represent formal communication.

0Formal communication generally follows unit of command.

Informal Communication0Which is not officially accepted part of the

communication in an organization.0 It does not adhere to organizational hierarchy.0 Informal communication is based on the informal

relationship among the organizational members.0Managers can use informal networks to get valuable

information about what is going on in the organization and also understand employees perceptions and expectations.

0 Informal communication is popularly known an grapevine.

0Grapevine information spreads rapidly through personal networks in the form of rumours and gossips.

Difference between formal and informal communication

0Formal communication0 Officially accepted0 Planned and systematic0 transmission is slow0 Written communication is

widely used.0 Emphasis on organizational

goals0 Little chance for distortion.

0 Informal communication0 Official not accepted0 Generally spontaneous0 No official channel and

messages are quickly spread0 Oral communication is

widely used0 Emphasis on social needs0 More chance for distortion

Oral and written communication

0 Merits of oral communication0 It is very quick and saves time0 Direct contact establishes hence it is more effective0 Message can be transmitted to large number of people at the

same time through speech0 Easy to understand and scope for immediate feedback

0 Demerits 0 There is no recorded proof for oral message and hence fixing

responsibility for both sender and receiver is difficult.0 Keeping attention of receiver is difficult when message are

lengthy.0 Requires good oratory skills.

0Merits of written communication0 There is a recorded document which serves as proof of

communication and hence responsibility can be easily fixed.

0 Large amount of information can be transmitted.0 Messages can be read any number of times and kept for

future references.0 More time is available for reading and interpreting.0 It can be used even when sender and receiver are

physically separated.0Demerits

0 More time is required for drafting messages0 Good drafting skills are required for the sender0 There is no personal touch0 No immediate feedback.

Non verbal communication or body language

0Refers to messages sent through human actions and behaviors rather than words.

0We generally use body language in the form of facial expressions, body positions, eye contact, posture, silence etc. to convey different messages.

Vertical and horizontal communication

0 Vertical communication 0 It is said to be vertical when messages flow from one

hierarchy level to another0 Vertical communication can be downward or upward.0 Downward communication starts from top management

and flows down to lower level through different hierarchy levels.

0 Downward communication is used to give orders, instructions, inform procedures, etc. job instruction sheets, circulars, memos, orders etc. are examples for downward communication

0Upwards communication flows from lower level to top management and it provides top management information about what is happening at lower levels.

0Examples of upward communication includes request, applications, reports, suggestions etc.

0Horizontal communication0Refers to exchange of information between two

people at same hierarchy level. 0For example information exchanged between two

departmental heads of an organization. 0A production engineer informing a maintenance

engineer about breakdown of a machine etc. 0 It is also called as lateral communication.

Barriers in communication

0 Sender related barriers.0 Lack of clarity in goals- clarity about purpose of

communication0 Lack of communication skills- sender should possess good

communication skills0 Lack of interpersonal sensitivity- harsh words and

offensive language0 Lack of credibility- receiver should keep trust on senders

message0 Fear- a person under fear while communicating0 Filtering- filtering either deleting a part of message or

inserting negative information in a message.

0 Receiver related barriers0 Lack of responsive feedback- if receiver fails to respond0 Decoding barrier- if receiver does not possess good

communication skills then he may fail to decode0 Poor listening or inattention- poor listening habits like fake

attention, distracting actions etc. 0 Judging in the basis of personality of sender- interpret the

message on the basis of personality traits of the sender rather than actual message itself.

0 Situational barriers0 Information overload- when volume of message exceeds a

person’s capacity0 Time pressure- when huge information to be transmitted in a

very little time.0 Noise- any form of disturbance during the communication0 Communication climate- climate here relates to trust and

confidence among the sender and receiver.

Coordination0Coordination is another important component of

directing.0Since individuals differences are inevitable in any

organization managers have to involve continuously in coordinating with people and groups to reduce the differences and increase harmony among them.

0Coordination is the process of integration or synchronization of the interdepartmental efforts of individuals in order to attain common goals.

0Coordination between various departments like production, marketing, purchase, quality, human resource management, finance etc. are very important form smooth functioning of the organization

Need of coordination0Coordination is very much essential due to following

reasons:0 Organization's are made up of various units and

departments which are interdependent. For example market depends on production, production depends on purchase for timely availability of various supplies for manufacturing activities and so on. Coordination function ensures that the interdependence needs are met by ensuring good relations among all departments

0 The splitting of work into smaller and smaller units through division of work creates the need of coordination among many individuals.

0 Good coordination ensures that people work towards common good rather than their own personal interest.

Requirements of good coordination

0 Direct personal contact between individuals who are responsible for task completion improves coordination

0 Mutual consultation and joint planning ensures better support for each other and commitment for common goals.

0 Defining clear objectives ensures clarity of role and responsibility among individuals results in better coordination

0 Clear definition of authority and responsibility of individuals eliminates any ambiguities among individuals.

0 Effective communication is very much essential for coordination .

0 Effective leadership ensures coordination among groups and individuals

Techniques of coordination0 Creating hierarchy levels: creating a chain of command

through well defined hierarchy positions. Putting interdependent tasks under one boss, ensures coordination among individuals.

0 Defining policies, procedures and rules: policies ensures that decisions are consistent and they are made within a common framework. procedure defines specific way in which a task to be performed and rule defines specific behavior.

0 Committees: joint decisions making through committees is another popular technique of coordination.

0 Incentives: motivate people to work with each other for timely completion of tasks.

Controlling0The last but the most important function of

management is controlling.0Controlling is defined as the process of measuring the

actual work and comparing it with a predetermined standard in order to determine any deviation so that timely corrective actions are taken and tasks are completed as per original plans

0Controlling is defined as continuous functions of determining what is being performed, measuring its actual results in relation with predetermined objectives and devising such corrective measures that may be necessary to make the performance conform to the original plans.

Relation between controlling and planning

0 The controlling process ensures that plans are being implemented properly

0 In the functions of management cycle- planning, organizing, directing and controlling- Planning moves forward into all the other functions and controlling reaches back.

0 Controlling is the final link in the functional chain of management activities and brings the functions of management cycle to full circle.

0 Since supervisors are ultimately held accountable for their employees performance, timely feedback on employees activity is necessary.

0 Thus planning and controlling are said to be two sides of the same coin.

Objectives of controlling0 To ensure effectiveness and efficiency in all management

functions.0 To determine what is happening in the organization and

measure actual progress from time to time.0 To ensure effective communication between various units

of organization.0 To keep a check on resource utilization.0 To reframe organizational plans in relation to changes in

the environment.0 To detect any deviation and take timely corrective

actions.0 To ensure that all the activities are performed according

to predetermined plans.

Control process

Establishing performance standards

0Standards are created when objectives are set during the planning process.

0 It is a precise, explicit statement of expected results from a product, service, machine, individual or organizational unit.

0Standard must be well defined and they must be expressed as far as possible in quantitative terms.

0Standards used in an organization are explained below:

0Physical standards: standards such as labor hours per unit of output, units of production per machine hour etc. are called physical standards.

0Cost standards: standards related to cost like direct and indirect material cost per product, direct and indirect labor cost per unit, selling cost per unit, etc. are called cost standards.

0Revenue standards: standards related to revenue generation like revenue per salesman, sales per territory etc. are known as revenue standards.

0Time standards: they relates to deadline and time constraints.

0and so on

Measuring actual work

0Measurement of performance is measured by several methods like personal observation, getting reports in the form of figures, charts, graphs etc.

0Quick measurement is very essential for timely determination of possible deviations

Comparing measured performance against established

standards0The actual performance is compared with

predetermined standards so that any deviations can be quickly determined.

0Managers ability to determine quickly the deviations is very much essential for controlling to be effective.

Taking corrective actions

0Managers must find the cause of deviation.0Then he/she must take actions to remove or minimize

the cause.0 If the source of variation in work performance is from

a deficit in activity then a manager can take immediate corrective action and get performance back on track.

Types of control

0Feed forward controls- focus on operations before they begin.

0Concurrent control- enact while work is being performed include any type of steering or guiding mechanism.

0Feed back control- focus on the results of operations. They guide future planning, inputs and process designs.

Control techniques

0Many techniques are used to make controlling effective and to ensure that organizational objectives are achieved

0Some of the important techniques are discussed below:

Budgetary controls0 A budget is a statement of anticipated estimates of requirements

to cover the activities of an enterprise spread over a time.0 Budget defines anticipated expenditures and results expressed

in financial and non financial terms.0 Sales budget gives the details of potential sales like quantity of

sales, value, product wise etc.0 Production budget is based on sales budget. It is an estimate of

various types of products to be manufactured during a time period.

0 Cash budget gives an estimate of anticipated cash receipts and payments during a period.

0 Master budget is summary of all functional budgets like productions, sales, cash etc.

Break even analysis

0Control device which is very widely used in organizations.

0 It is a technique used to determine the relationship between sales and cost involved in product in such a way that as to show what sales volume revenue can cover exactly all the expenses

Inventory control

0 Inventory control helps managers in controlling stock of various items like raw materials, semi finished items, spares and finished goods so that investments on stock is optimum and materials are better utilized.

PERT and CPM

0Programme Evaluation and Review Technique(PERT) is a technique used in controlling complex programmes or projects and it helps managers in estimating time required for completion of project.

0Critical Path Method(CPM) shows the sequence of events and activities within a programme evaluation and review technique network that requires longest period of time to complete.

Linear programming

0Primarily used in problems related resource allocation in controlling process, and it helps in predicting outcome of the results.