BASIC ELEMENTS OF MANAGERIAL CONTROL

Maria Cecilia G. Cataring

Managerial Control

For our purposes, managerial control refers to the method and mechanisms that managers use to ensure that employee behavior and performance conform to the organization’s objectives, plans and standards.

Within organizations and society in general, the word control often has a negative connotation. It can mean restraining, forcing, delimiting, watching, and manipulating. This negative interpretation is partially a reaction to deeply held values of individualism and democracy, which are somewhat inconsistent with the notion of strong control over us by others. Thus methods of managerial control are often the focus of controversy and power struggles within organizations.

On the other hand, control is an essential managerial function and therefore shouldn’t be thought of automatically in negative terms. We can illustrate this point best, perhaps, by showing how control interacts with planning.

Planning is a formal process of making decisions about objectives, strategies, tactics, and resource allocation. Managerial controls are measures that help ensure that actual behaviors and results are consistent with those plans, objectives and standards.

Planning prescribes desired behaviors and results. Managerial controls help maintain or redirect actual behaviors and results.

Managers cannot effectively plan without accurate, timely and adequate information. Control processes are the means by which managers obtain much of this essential information.

Managers cannot effectively control the organization without plans indicating the purposes to be served by the control process. Thus planning and managerial control complements and support each other.

Types of Control

Preventive controls are intended to reduce errors and thereby minimize the need for taking corrective action. Canadian Pacific Railroad’s computer-based dispatching program serves primarily as a preventive control in guiding the train movements. Similarly, air traffic controllers prevent crashes by ensuring that airline personnel follow well-defined standards, rules, and procedures during takeoffs and landings.

Rules and regulations, standards, selection procedures, and training and development programs function primarily as preventive controls. They all direct and limit the behaviors of employees. Management usually assumes that if employees comply with these restrictions , the organization is likely to achieve its objectives. Again, control mechanisms are needed to make sure that the rules and regulations are being followed and are working.

Corrective controls are intended to change incorrect employee behaviors and performance so that they conform to established standards and rules. Jack Rutko and CP Rail’s computer-based dispatching program use corrective control when they discover that trains are getting dangerously close and instruct them to change speeds or shunt them onto a siding. An air traffic controller also engages in corrective control by instructing a pilot to change altitude and direction to avoid another plane.

Organizations need both corrective and preventive controls. Managers and other employees-like the dispatchers at CP Rail and air traffic controllers-often use both types of controls in performing their jobs. 

Personnel departments exercise preventive control by carefully screening job applicants. By selecting only qualified employees, they avoid the time and expense associated with job dissatisfaction, poor performance and unnecessary training.

Sources of Control

There are three primary sources of control in most organizations: organizational, group, and individual.

Organizational control Refers to formal managerial control strategies and mechanisms. Examples include rules, standards, budgets, and audits. 

Group control Refers to the norms and values

that group members share and maintain through rewards and punishments. Examples such as giving a member the silent treatment.

Individual self-controlRefers to control mechanisms operating

consciously and unconsciously within individuals. For example, sweating is an unconscious (automatic) corrective control mechanism that occurs in response to exposure to excessive heat. A conscious preventive control mechanism is the instilled value of honesty, which makes you unwilling to steal from your employer, rather than simply fear of punishment if you are caught.

Standards of professionalism are becoming an increasingly important mechanism of individual self-control. Becoming a professional involves acquiring detailed knowledge, specialized skills, and specific attitudes and ways of behaving. The entire process may involve years of study and socialization. Certified public accountants, lawyers, business school graduates and physicians, among others are expected to engage in individual self control based on the standards of their professions.

  Table 1 provides examples of how the

three sources of control relate to the preventive and corrective controls found in most organizations

 

Type and Examples

Source Preventive Controls

Corrective Controls

Organizational control

Using budgets to guide expenditures

Disciplining an employee for violating a “No Smoking” safety regulations in a hazardous area

Group control Advising a new employee about the group’s norm in relation to expected level of output

Harassing and socially isolating a worker who doesn’t conform to the group norms

Individual self-control Deciding to skip lunch because you are running behind schedule in completing a project

Revising a report you have written because you are dissatisfied with it

Patterns of Control 

Organizational, group, and individual controls form patterns that differ greatly from one organization to another. Strong organizational cultures usually produce mutually supportive and reinforcing organizational, group, and individual controls. On the other hand, the three sources of control may operate at odds with each other and/or independently in organizations exhibiting extreme internal conflict or widespread apathy. Figure 2 illustrates these two patterns.

Figure 2 Illustrative Control Pattern Organizational control

Group control Individual selfcontrol

Compatible and reinforcing Conflicting or independent controlscontrols

control

Organizational control

Individual self-control

Group control

Purposes of Control

We have already suggested the general purposes of formal organization controls. More specifically, organizational controls are intended to:

Standardize acceptable performance, in part through standards, rules, inspections, written procedures, or production schedules.

Protect an organization’s assets from theft, waste, or misuse, in part through record-keeping requirements, auditing procedures, and assignment of job responsibilities.

Maintain the quality of products or services sold to customers, in part through employee training, inspections, statistical quality control, and performance incentive systems.

Limit the amount of authority that can be exercised by managers and employees, in part through job descriptions, policy directives, rules, and budgets.

Measure and direct employee and departmental performance, in part through performance appraisals, direct supervisory observation, and reports on quantity and quality of results. 

The purposes of controls are realized only if they are effective and enable the organization to achieve its objectives.

MANAGEMENT BY EXCEPTION

Is a management style, policy or philosophy wherein managers intervene only when their employees fail to meet their performance standards or when things go wrong. If the personnel are performing as expected, the manager will take no action. Time and effort should not be wasted focusing on employees or parts of the organization where things are going smoothly. 

The term is also used to describe provision of information to management in which only significant deviations from budgets or plans are reviewed as the basis for corrective action. The object is to reduce the quantity of detail contained in management reports and statistics to date on which action can be taken.

In many cases, management by exception requires that the manager delegates specific functions to others who are part of the team or group impacted by the abnormal results. Within the scope of that employee’s duties, he or she will likely use processes designed to specifically address that deviation, while the remainder of the team continues to use standard operating procedures and practices to manage other company functions. 

Besides a control technique, MBE can be also a motivational approach. It fits well into an organizational philosophy of employee empowerment, in which managers delegate as much responsibility and activity as possible to those below them, stepping in only when it's really necessary. In MBE, only decisions that cannot be made at a lower level is passed on to the next higher level.

The idea behind management by exception is that managers should only spend their limited and valuable time to important, more tactical or even strategic activities.

MANAGEMENT BY EXAMPLE

There's hardly anything worse for company morale than leaders who practice the "Do as I say, not as I do" philosophy. When this happens, you can almost see the loss of enthusiasm and goodwill among the staff. It's like watching the air go out of a balloon – and cynicism and disappointment usually take its place.

No matter what the situation is, double standards – witnessing people say one thing, and then doing another – always feel like betrayals. They can be very destructive. If this ever happened to you, you can probably remember that sense of disappointment and letdown.

If you're in a leadership position, then you know that you have a responsibility to your team. They look to you for guidance and strength; that's part of what being a leader is. And a big part of your responsibility is to lead them with your own actions.

Apply This to Your Life

If you ask a co-worker to do something, make sure you'd be willing to do it yourself.

If you implement new rules for the office, then follow those rules just as closely as you expect everyone else to follow them. For example, if the new rule is "no personal calls at work," then don't talk to your spouse at work. You'll be seen as dishonest, and your staff may become angry and start disobeying you.

Look closely at your own behavior. If you criticize people for interrupting, but you constantly do it yourself, you need to fix this. Yes, you want people to pay attention to one another and listen to all viewpoints, so demonstrate this yourself.

If, in the spirit of goodwill, you make a rule for everyone to leave the office at 5:00 p.m., then you need to do it too. If you stay late to get more work done, your team may feel guilty and start staying late too, which can destroy the whole purpose of the rule. The same is true for something like a lunch break – if you want your team to take a full hour to rest and relax, then you need to do it too.

Good leadership takes strength of character and a firm commitment to do the right thing, at the right time, for the right reason. This means doing what you say, when you say it. If your team can't trust you, you'll probably never lead them to greatness.

Leading – and living – by example isn't as hard as it might sound. It's really the easiest path. If your team knows that you'll also do whatever you expect from them, they'll likely work hard to help you achieve your goal.