In organizational management, the control process is limited to monitoring of the implementation of plans, organizational work, etc. The control process ensures gathering the information about the distribution and use of funds, searching for additional possibilities and reserves, implementing changes in organizational management and analysis of financial data. The major goal of the control function is the constant search for the deviations among real and planned results.
The Control Process usually Undergoes Four Stages within an Organization:
Stage 1:Performance Standards Establishment
The stage involves defining the organizational parameters of development and functioning that must be monitored, and studying available records on them. In practice, the parameters appear in the form of different regulations and standards that comply with the objectives stated in the organizational tasks. For instance, it can be performance indicators, norms of cash costs, work program standards, etc.
There are certain requirements of these regulations, for example, flexibility, scientific validity, appropriate reflection of actual processes, and reliability in an ordinary situation.
Stage 2:Measuring and Observing Real Performance
This stage involves the production of the organizational management model that represents information, flows of resources, stages of formation of transitional and final results, as well as control points (the most appropriate time for control actions implementation).
Stage 3:Comparing the Established Standards and the Measured Performance
The stage involves gathering data about the factual advancement and comparing it to the corresponding regulations. This ensures measuring the deviations from the established standards, determining their acceptable limits, and deciding on the need to take corrective actions.
Among the elements of control, measurements are the most difficult and expensive ones. The cost of measurements usually defines the need of control, the major task of which is to search for the ways to cut on the costs rather than to increase them.
Data gathered for the control purposes should be accurate, timely and helpful in the process of decision making. Usually, the information is taken from special reviews, public opinion surveys, accounting records, final reports, constant observations, etc.
Stage 4: Implementing Corrective Actions
The final stage of the control process includes the modification of organizational goals, the adjustment of the activities, the revision of plans, the allocation of tasks, and the refinement of production management and technology. On the other hand, changes should be implemented carefully. In case the things go well and organizational goals are practically reached, it is better to avoid making organizational changes, because there are deviations that rarely interfere with the actual operation and have almost no impact on the outcomes. In addition, it is costly to implement changes in such a situation.
Thus, necessary adjustments should be made in extraordinary cases only.
Corrective actions may be implemented in two ways. Firstly, it is possible to remove the reasons of rejection by their neutralization or liquidation. Secondly, it is necessary to change the standards, which may appear to be false, because they are usually based on the predictions that do not reflect a real situation.
The control process is significant in management because it helps to discover and estimate the results of commercial activity, identify people who contributed to the improvement of business performance, evaluate the effectiveness of the planned activities, and come up with appropriate conclusions. In addition, the most significant element is to monitor the results, because they measure the success of an organization.