According to managerial control, management can keep track of performance, and primary functions, set performance standards, and make adjustments. In a broader sense, the company can understand the difference between what got planned and what happens in real-time. Thus, taking the required actions is possible. However, there are different types of managerial controls mentioned in this article. Let us know about the Managerial Controls.
Managerial control is the process of helping the managers of the organization in understanding how to manage and control the employees and organizational activities. If carried out efficiently, it can help the managers recognize where the failures have occurred and what are the associated reasons.
Types Of Managerial Controls
Types of managerial controls are output, behavior, and clan. The first deals with evaluating measurable outputs, and the second, is actions that help in getting the required outcome. The third type indicates that the organization works as a family. Thus, the employees must achieve organizational objectives by going hand in hand with the traditions, expectations, norms, and values.
Characteristics Of Managerial Controls
The process of managerial control remains up-to-date because it helps make sure that the employees and management work for the interests of an organization while dealing with external and internal challenges. External challenges include competition, market, economic, and political conditions. Internal challenges include time, labor management, etc.
The following are the characteristics of the managerial control process:
It Is A Process
It contains two stages. The first stage consists of planning, and the second one contains actions and monitoring the results. It gets achieved over time. Thus, it gets called the ‘Managerial Control Process.’ The organization understands what happened in the past and why. Some organizations may also consider the following five stages: planning, organizing, operating, directing, and administering.
It Is Dynamic
To get the desired results, the organization takes different actions to withstand internal and external challenges. Managerial control is a dynamic process because it depends on the other management functions too. Similarly, adjustments must get done according to the performance review.
It Requires Planning
The managerial control process is a reaction instead of an action. It gets applied after verifying the results. Afterward, the organization must prepare, organize, perform simulations, and predict the results. Every goal, objective, policy, budget, and procedure gets compared against the actual performance. After that, controlling helps apply the planned things. Finally, planning, performing, and controlling get repeated.
Planning provides a framework to organize the steps. However, the organization must clearly understand where the difference between the expected and actual outcome lies.
It Is An Internal Process
The tools and ideas are specific to the organization and not according to any globally accepted standard. The managers develop objectives, plans, and steps to achieve them within the organization. It is how they look after the performance of the organization.
Focuses On Value Creation
The managerial control process does not focus on increasing profits or reducing expenditures. Instead, it focuses on value creation and performance. This process may require time, workforce, cost, raw materials, and more. On the other hand, it may improve product quality to bring more customers to the organization. So, one cannot reduce the concept of the managerial control process to the negative sides.
Contains Two Variables
This process consists of two types of variables. The first type of variable is called ‘Manipulated variables.’ The organization can change them. The other is, ‘Controlled variables’ that get changed according to the changes done in the organization. So, a change in the former must result in a consistent and predictable response from the latter.
Requirements For The Managerial Control Process
It does not get created on its own. Instead, the organization must create it. Every organization can develop a unique managerial control process. However, it must consider the following requirements for the process:
Versatility
The managerial control process focuses on improving the performance of the organization. So, it must get versatile enough to accommodate the changes when required. It can get achieved through environment-friendliness, adjustments in the plan, and budgets.
Simple And According To The Requirements Of The Organization
While focusing on the organizational objectives, the managers must also consider the requirements of the organization. The control process must get changed accordingly. Similarly, the tools and standards must be understandable, unbiased, and economical. Instead, the organization must prioritize the control process over the costs.
Factors To Get Considered
The factors, irrespective of the organization, to get considered are time, quality, marketing, quantity, finance, costs, human resources, production, etc. The managers can get choosy in this process. However, they cannot concentrate on every detail to save effort, time, or cost. On the other hand, managers must identify the critical stages where failure will affect more and work accordingly.
Timely Action
The changes must get noted on time. Thus, the required measures will be taken by the managers of the organization at the correct time.
Making Corrections Where Required
The actions taken to achieve the objectives must get corrected when required. Planning, organizing, gathering labor and overseeing can help in this case. Similarly, the control process must predict upcoming problems for the managers of the organization. The interpretation and the responsibilities of the employees must get informed clearly.
Steps In The Managerial Control Process
The following are the steps in the managerial control process:
Establish Standards
Parameters must be established in professional, operational, and precise terms by the managers of the organization. It gets applied to most objectives, not all. They must also get adjusted according to the change in environment. Similarly, they must be achievable, realistic, specific, and understood by every person involved in the process.
On the other hand, the parameters can be tangible, intangible, ethical, cooperation, morale, and more. They can get derived from previous data, statistics, and benchmarking. The managers must consider the organization’s goals and think from all sides, instead of thinking from only one side.
Measuring How It Works
The manager must regularly measure how it works before taking any action. The performance can be measured through statements, charts, reports, and observation. Similarly, the formal reports of the measurement can be quantitative or qualitative, depending on the organization’s requirements. They must go hand in hand with the standards set in the previous step.
The measurements must be accurate and let the managers take quick action with the required parameters. Qualitative measurements include employee performance and attitude and product quality. They help in measuring actual performance. On the other hand, quantitative measurements include profitability, sales, costs, etc. They can be obtained by managerial observation.
Comparing Results With Standards
Actual performance gets compared with the predicted standards in this step. For that, the manager can conduct walk-throughs and read reports. The managers must identify where the difference lies and what is the cause of it. Some variations may not be important, while some may be.
The standards include productivity, human resources, profitability, market position, product leadership, employee attitude, social responsibility, and the difference between short-term and long-term goals.
The manager must know how much difference between the actual and expected outcomes is permissible (positive and negative). It can decide when to compare the results according to the complexity and importance of the task.
Take Corrective Measures
These measures must be taken to eliminate the difference between the targeted and actual results. Thus, the managers must determine the exact root of the difference. Work environment; that focuses on quality and productivity, empowers the employees to analyze and take measures on their work. For that, both internal and external factors must get considered.
If the actual outcomes exceed the expected ones, the managers must revise the standards. If the actual outcomes match the expected ones, the managers may not work on the process more. However, they can still work to improve the performance beyond the expectations without affecting the existing ones. The measures they take must focus on eliminating the difference between the expected and actual outcomes.
Advantages Of Managerial Control
Managerial control is essential for any organization. The following are the advantages of the same:
Boosts The Performance Of The Employees
It boosts the morale and efficiency of the employees as they know that they and their activities are being monitored by their superiors. Managerial control also develops a sense of responsibility and authority in junior employees. Various departments get involved in the activities and go in one direction.
Decentralization Of Authority
Supervision within an organization gets easier. Low-level employees make decisions suitable at their levels and inform the same to the higher authorities. Thus, the latter gets the feedback and understands whether the decisions made are for the betterment of the organization.
Points The Shortcomings And Eliminates The Mistakes
The control process points out the shortcomings in planning, organizing, directing, and staffing, and provides a set of actions to be taken to eliminate the same. These suggestions will help overcome mistakes in the future.
Disadvantages Of The Managerial Control
The following are the disadvantages of managerial control:
Deviation From The Objective
It looks like the managerial control process has deviated from the main objective due to increasing immoral behavior, and changing internal structure and environment. Also, it gets difficult to measure employees’ morale and behavior.
No Control Over The External Factors
It has no control over the market, economical, political, fashion, and technological conditions.
Requires Effort And Time
Some employees may feel controlled and face a lack of independence. So, they may resist the process. Similarly, the higher authorities must administer their subordinates. It requires effort and time.
Conclusion
An effective managerial control process points to where the failure occurred and who made them. Similarly, it provides the curative measures for the same and preventive measures for the occurrence of similar failures in the future. So, every person involved in it must get ready to cooperate and understand every procedure.
