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UNIT V
Co-Ordination Need for co-ordination Types Techniques - Distinction
between Coordination and Co operations Requisites for excellent Co-Ordination
Systems Approaches and Co-ordination Controlling Meaning and importance of
Controls Control Process. Nature and Scope of control; Types of Control; Control
process; Control techniques traditional and modern; Effective Control System.
Case Studies in all the Units.

Co-ordination:
Although Henri Fayol, James Mooney, Ordway Tead, Lyndall F. Urwick, Luther Gullick and
Louis A. Allen, all consider co-ordination as a separate function of management, it seems more accurate
to treat co-ordination as the essence of managing because the achievement of harmony of individual
efforts towards the accomplishment of group goals is the very purpose of management. Like the
conductor of an orchestra, the task of a manager is to unify and harmonise the activities of subordinates
for the achievement of common purpose. Co-ordination permeates or transverses the entire process of
management.
It is a common silken thread running through all management functions. Management functions
are like flowers in the garland of co-ordination. Managers at all levels must co-ordinate the efforts of
their subordinates. They have to secure and maintain unified action throughout an organisation just as a
music director creates harmony in music by integrating different voices of musicians. Manager coordinates by securing and maintaining unified action throughout the organisation. Every function of
management must in itself have to be co-ordinated.
For example, planning is not effective unless departmental plans are properly balanced and
integrated. Organisation would be poor if there is a lack of harmony in horizontal and vertical authority
relationships. Staffing must be consistent with the needs and resources of the enterprise. Direction is
not sound unless orders and instructions are consistent with the needs of the situation. Controlling
creates harmony between plans and performance. Thus, co-ordination is inherent in all managerial
functions. Each of the managerial functions is an exercise in co-ordination. A manager achieves coordination through the management process and co-ordination is the outcome of managerial functions.
In fact, co-ordination makes planning more purposeful, organisation better-knit and control more
regulative, it is the key to the process of management. Co-ordination is the result of the process of
management.

Meaning and definition of co-ordination:

Co-ordination implies an orderly pattern or arrangement of group efforts to ensure unity of
action in pursuit of common objectives. It involves and orderly synchronisation of the efforts of
individual components of an enterprise to provide the proper timing, amount, quality, place and
sequence of efforts so that the stated objectives may be achieved with minimum of friction. Coordination requires unification of diverse and specialised activities. It is the task of blending the
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activities of individual and group efforts in order to maximise contribution towards the accomplishment
of common goals.
According to Henri Fayol, To co-ordinate is to harmonise all the activities of a concern so as to
facilitate its working and its success. In a well-co-ordinated enterprise, each department or division
works in harmony with others and is fully informed of its role in the organisation. The working
schedules of the various departments are constantly attuned to circumstances. The purpose of coordination is to secure harmony of action or team-work and concurrence of purpose.
In the words of Haimann, Co-ordination is the orderly synchronisation of efforts of the
subordinates to provide the proper amount, timing and quality of execution so that their unified efforts
lead to the stated objective, namely the common purpose of the enterprise. Mooney and Reiley have
defined co-ordination as the arrangement of group effort, to provide unity of action in the pursuit of a
common purpose.

Nature and characteristics of co-ordination:

The fore-going reveals the following features of co-ordination;

Co-ordination is not a distinct function, but the very essence of management. It is inherent in
the managerial job.

Co-ordination is the basic responsibility of management and it can be achieved through

managerial functions. No manager can evade or avoid this responsibility.

Co-ordination does not arise spontaneously or by force. It is the result of conscious and
concerted action by management.

The heart of co-ordination is the unity of purpose which involves fixing the time and manner
of performing various activities.

Co-ordination is a continuous or on-going process. It is also a dynamic process.

Co-ordination is required in group efforts not in individual effort. It involves the orderly
pattern of group efforts. There is no need for co-ordination when an individual works in
isolation without affecting anyones functioning.

Co-ordination is the responsibility of each and every manager.

Co-ordination has a common purpose of getting organisational objectives accomplished.

According to Allen, A manager in managing must co-ordinate the work for which he is
accountable by balancing, timing and integrating. Thus, balancing, timing and integrating are the three
elements of co-ordination. Balancing is ensuring that enough of one thing is available to support or
counterbalance the other. It implies creating a balance between the resources of different departments
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and individuals. Timing means adjusting the time schedules of different activities so that they support
and reinforce each other. Integrating involves unification of the diverse interests under the common
purpose.

Need and importance of co-ordination co-ordination offers the following advantages.

1. Efficiency and effectiveness co-ordination helps to improve the efficiency of operations
by avoiding the overlapping of efforts and duplication of work. Integration of individual efforts
leads to teamwork. Co-ordination makes a productive enterprise out of diverse activities and
produces the total result which is greater than the sum of individual contributions. This is called
synergy. The quality of co-ordination determines the effectiveness of organised efforts.
Therefore, co-ordination is known as the first principle of organisation.
2. Unity of direction co-ordination helps to ensure unity of action in the face of disruptive
forces and by welding different work groups it facilitates the stability and growth of an
organisation. It provides unity of action and helps to avoid conflicts between line and staff
elements.
3. Human relations co-ordination helps to improve team spirit and morale of employees. In
a well-co-ordinated organisation, organisational goals and personal goals of people are
reconciled and as a result employees derive a sense of security and job satisfaction.
4. Quintessence of management co-ordination is an all-inclusive concept and the end result
of management process. According to Mary Parker Follett, The first test of effective
administration should be whether you have a business with all its parts so co-ordinated, so
moving together in their closely knit and adjusting activities, so interlocking that they make a
working unit that is not a congenis of separate pieces, but a functional whole or integrated unit.
Thus, co-ordination helps in the accomplishment of organisational goals.

Types of co-ordination:
The co-ordination may be divided on different bases, namely;

Scope - on the basis of scope or coverage, co-ordination can be.

1.
Internal refers to co-ordination between the different units of an organisation within
and is achieved by integrating the goals and activities of different departments of the enterprise.
2.
External refers to co-ordination between an organisation and its external environment
comprising government, community, customers, investors, suppliers, competitors, research
institutions, etc. It requires proper match between policies and activities of the enterprise and the
outside world.

Flow - on the basis of flow, co-ordination can classified into:

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1.
Vertical implies co-ordination between different levels of the organisation and has to
ensure that all the levels in the organisation act in harmony and in accordance with the goals and
policies of the organisation. Vertical co-ordination is assured by top management through
delegation of authority.
2.
Horizontal or lateral refers to co-ordination between different departments and other
units at the same level of the management hierarchy. For instance, co-ordination between
production department and marketing department is horizontal or lateral co-ordination.
Co-ordination may also be:
Procedural and substantive which according to Herbert A. Simon, procedural co-ordination
implies the specification of the organisation in itself, i.e. the generalised description of the
behaviour and relationship of the members of the organisation. On the other hand, substantive
co-ordination is concerned with the content of the organisations activities. For instance, in an
automobile plant an organisation chart is an aspect of procedural co-ordination, while blueprints
for the engine block of the car being manufactured are an aspect of substantive co-ordination.

Techniques of co-ordination the main techniques of effective co-ordination are as follows.

1

Sound planning unity of purpose is the first essential condition of co-ordination.

Therefore, the goals of the organisation and the goals of its units must be clearly defined.
Planning is the ideal stage for co-ordination. Clear-cut objectives, harmonised policies and
unified procedures and rules ensure uniformity of action.

2. Simplified organisation a simple and sound organisation is an important means of coordination. The lines of authority and responsibility from top to the bottom of the organisation
structure should be clearly defined. Clear-cut authority relationships help to reduce conflicts and
to hold people responsible. Related activities should be grouped together in one department or
unit. Too much specialisation should be avoided as it tends to make every unit an end in itself.
3. Effective communication open and regular communication is the key to co-ordination.
Effective interchange of opinions and information helps in resolving differences and in creating
mutual understanding. Personal and face-to-face contacts are the most effective means of
communication and co-ordination. Committees help to promote unity of purpose and uniformity
of action among different departments.
4. Effective leadership and supervision effective leadership ensures co-ordination both at the
planning and execution stage. A good leader can guide the activities of his subordinates in the
right direction and can inspire them to pull together for the accomplishment of common
objectives. Sound leadership can persuade subordinates to have identity of interest and to adopt
a common outlook. Personal supervision is an important method of resolving differences of
opinion.
5. Chain of command authority is the supreme co-ordinating power in an organisation.
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ordination. Co-ordination between interdependent units can be secured by putting them under
one boss.
6. Indoctrination and incentives indoctrinating organisational members with the goals and
mission of the organisation can transform a neutral body into a committed body. Similarly
incentives may be used to create mutuality of interest and to reduce conflicts. For instance,
profit-sharing is helpful in promoting team-spirit and co-operation between employers and
workers.
7. Liaison departments where frequent contacts between different organisational units are
necessary, liaison officers may be employed. For instance, a liaison department may ensure that
the production department is meeting the delivery dates and specifications promised by the sales
department. Special co-ordinators may be appointed in certain cases. For instance, a project coordinator is appointed to co-ordinate the activities of various functionaries in a project which is
to be completed within a specified period of time.
8. General staff in large organisations, a centralised pool of staff experts is used for coordination. A common staff group serves as the clearing house of information and specialised
advice to all department of the enterprise. Such general staff is very helpful in achieving interdepartmental or horizontal co-ordination. Task forces and projects teams are also useful in coordination.
9. Voluntary co-ordination when every organisational unit appreciates the workings of
related units and modifies its own functioning to suit them, there is self-co-ordination. Self-coordination or voluntary co-ordination is possible in a climate of dedication and mutual cooperation. It results from mutual consultation and team-spirit among the members of the
organisation. However, it cannot be a substitute for the co-coordinative efforts of managers.

Principles of co-ordination (requisites for effective co-ordination)

Mary Parker Follett has laid out four principles for effective co-ordination;
Direct personal contact - according to this principle co-ordination is best achieved through
direct personal contact with people concerned. Direct face-to-face communication is the most
effective way to convey ideas and information and to remove misunderstanding.
Early beginning co-ordination can be achieved more easily in early stages of planning and
policy-making. Therefore, plans should be based on mutual consultation or participation.
Integration of efforts becomes more difficult once the unco-ordinated plans are put into
operation. Early co-ordination also improves the quality of plans.
Reciprocity this principle states that all factors in a given situation are interdependent and
interrelated. For instance, in a group every person influences all others and is in turn influenced
by others. When people appreciate the reciprocity of relations, they avoid unilateral action and
co-ordination becomes easier.
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Continuity co-ordination is an on-going or never-ending process rather than a once-for-all
activity. It cannot be left to chance, but management has to strive constantly. Sound coordination is not fire-fighting, i.e., resolving conflicts as they arise.

Co-operation:
Co-ordination and co-operation the two should not be confused because the two terms denote
quite different meanings. Co-operation refers to the collective efforts of people who associate
voluntarily to achieve specified objectives. It indicates merely the willingness of individuals to
help each other. It is the result of a voluntary attitude of a group of people. Co-ordination is
much more inclusive, requiring more than the desire and willingness to co-operate of the
participants. It involves a deliberate and conscious effort to bring together the activities of the
various individuals in order to provide unity of action. It requires concurrence of purpose,
harmony of effort and concerted action. It is much more than mere reconciliation of differences
or avoidance of friction.
Co-operation provides the foundation for co-ordination by enlisting voluntary efforts which
facilitate co-ordination, but by itself it cannot guarantee co-ordination. Co-ordination does not
arise automatically from the voluntary efforts of the manager. For instance, a group of six
persons who attempt to move a heavy object are willing and eager to co-operate with one
another. They are fully aware of their common purpose and are trying their best to move the
object, but they cannot be successful in their attempt unless one of them co-ordinates their
efforts. He must give proper directions to all members of the group to apply the right amount of
effort, at the right place and at the right time. Co-operation is a necessary, but not a sufficient
condition of co-ordination.

Difference between co-ordination and co-operation:

Difference between co-ordination and co-operation are given below.
1. Status co-ordination is the essence of management and it is vital for the success of all
managerial functions. Co-operation, on the other hand, does not enjoy the status of the essence
of management. Co-operation is no doubt essential for successful co-ordination, but it is more of
a personal attitude rather than organisational.
2. Nature of work in the organisation, the nature of work is such that it needs to be divided
and then integrated. Co-ordination of all interdependent activities is utmost necessary, but cooperation does not arise out of any limitations of organisation structure. The individuals may
learn to co-operate with each other even though their activities may not be related.
3. Deliberate co-ordination requires deliberate and intentional efforts of a manager. On the
other hand, co-operation is voluntary. In other words, co-ordination is a contrived process,
whereas co-operation is a natural process.
4. Scope co-ordination is broader in scope than co-operation. It includes both co-operation
and deliberate efforts to maintain unity of action and purpose.
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According to McFarland, co-ordination is a far more inclusive term embracing the idea
of co-operation. Co-operation, that is mere willingness of individuals to help each other, cannot serve as
a satisfactory substitute for co-ordination. Co-operation is for most part the result of voluntary attitudes
on the part of people in an organisation. Co-ordination, on the other hand, cannot be voluntarily
produced by a number of co-operating persons. Co-ordination is a state of affairs which an executive
brings about through deliberate action on his part. Thus, co-ordination is much more than co-operation.
Co-ordination is the epitome of all managerial functions while co-operation is an attitude of an
individual or group. Need for co-ordination arises due to limitations of formal organisation structure,
but co-operation is necessary even in case of non-interdependent activities. Thus, co-ordination is a
broader concept than co-operation, but to be effective an organisation requires both. Co-operation will
be ineffective in the absence of co-ordination just as co-ordination is not possible without co-operation.
Co-ordination Vs control: these are two different, but related functions. Control is one of the
elements of the management process. Co-ordination is the essence of management itself and is an allinclusive function. Like other managerial functions, control is an exercise in co-ordination. Coordination is a core theme and control is a facilitative function to promote co-ordination.
The main points of similarity and relationship between control and co-ordination are as follows.
Both of them are classical concepts developed at an early stage in the evolution of
management thought. These concepts have stood the test of time and are still very much valued.
Both are managerial activities aimed at achieving organisational goals most efficiently.
Their purpose is to ensure a steady state of the organisation in terms of its continuity,
consistency, discipline and precision.

Both processes are based on authority.

The processes of control and co-ordination are built into the organisational structure and are
relatively more centralised than the other processes.
Both are rational concepts which serve as links between organisational ends and means.
They are used to maintain organisations as rational systems free from conflicts, confusion and
chaos.
Both control and co-ordination are primarily internal organisational processes, with little
interface with the external environment. As a result management is relatively free to design and
administer control and co-ordination systems and techniques.
Both control and co-ordination have a limited time perspective. They are essentially short
range processes concerned with regulation and unification of ongoing organisational activity.
Control and co-ordination are highly formalized processes. However, self-control and selfco-ordination are useful to organisations.
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Both control and co-ordination are required in every organisation. Control is needed to
maintain order and consistency in the behaviour of people and events. Co-ordination is required
to unify the differentiated activities and to integrate the diverse goals, interests and roles.

Control:
It is

the process of ensuring that actual activities conform to planned activities.

Organisations use control procedures to ensure they are making satisfactory progress towards
their goals and using their resources efficiently. While some companies may rely more heavily
on control procedures than many other companies because of the market cyclicality and narrow
profit margins, all companies must use control procedures.

Meaning of control:
Management control is the process of ensuring that actual activities conform to the
planned activities. In fact, control is more pervasive than planning. Control helps managers
monitor the effectiveness of their planning, their organising and their leading activities. An
essential part of the control process is taking corrective actions as needed. Controlling may also
be defined as the process of analysing actual operations and seeing that actual performance is
guided towards expected performance. It involves comparing operating results with plans and
taking corrective actions when results deviate from plans.
It is a mechanism by which someone or something is guided to follow the predetermined
course. As a plan is put into operation, it becomes necessary to check results to find out whether
the work is proceeding along the right lines. In case of any deviations, necessary corrective
action is taken to ensure that in future the work proceeds in the desired manner.
According to George R Terry - "Controlling is determining what is being accomplished
i.e., evaluating the performance and if necessary, applying corrective measures so that the performance
takes place according to plans."
According to Billy E Goetz - "Management control seeks to compel events to conform
plans".
According to Koontz and ODonnell, The managerial function of controlling is the
measurement and correction of the performance of activities of subordinates in order to make
sure that the enterprise objectives and the plans devised to attain them are being accomplished.
Brech has defined control as the continuing process of measuring the actual results of
the operations of an organisation in relation to results which were planned for that organisation
and of direction and action accordingly. In other words managerial control implies measuring
actual performance, comparing it with the standards set by plans and correcting deviations to
ensure achievement of objectives according to plans.

Nature and purpose of control:

The main characteristics of managerial control are as follows;
Control is an essential function of management the function is performed by
every manager at all levels of the organisation. Control is in fact a follow-up action
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to the other functions of management. The other managerial functions cannot be
completed effectively without performing the control function.

Control is an on-going process it involves continuous measurement of results and

review of standards. It does not stop anywhere. Just as the navigator continually
takes reading to ascertain whether he is relative to planned course, so should the
business manager continually take reading to assure himself that his enterprise or
department is on course.

Control is forwards-working because the past cannot be controlled however,

always the past performance is measured and in the light of such measurement
corrective action for a future period is identified. No one can measure the outcome of
an event which has not taken place.
Control involves measurement is a process of measurement, comparison and
verification. It involves a check on the performance of individuals and does not
curtail the freedom of action. Control requires feedback information on actual
operations.

The essence of control is action the purpose of control is achieved only when
corrective action is taken to correct deviations and performance is adjusted to
predetermined standards. Control results in corrective action which may lead to
changes in other managerial functions. A good system of control permits timely
action so that there is a minimum waste of time and money.

Control is an integrated system it is a set of interlocking subsystems or a

coordinated structure of activities.

SCOPE OF CONTROL:
The scope of control is very wide. A well designed plan of control (or control system) covers almost all
management activities. According to Holden, Fish and Smith, the main areas of control are as follows:
1. Control over policies: The success of any business organisation to a large extent, depends upon, how far its
policies are implemented. Hence the need of control over policies is self-evident. In many enterprises, policies are
controlled through policy manuals.
2. Control over organisation: Control over organisation is accomplished through the development of organisation
chart and organisation manual. Organisation manual attempts at solving organisational problems and conflicts
making long-range organisation planning possible, enabling rationalisation of organisation structure, helping in
proper designing of organisation and department.
3. Control over personnel: The statement that Management is getting the work done through people underlines
sufficiently the importance of control of personnel. All employees working at different levels must perform their
assigned duties well and direct their efforts in controlling their behaviour. Personal Director or Personnel
Manager prepares control plan for having control over personnel.

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4. Control over wages and salaries: Such type of control is done by having programme of job evaluation and
wage and salary analysis. This work is done either by personnel department or industrial engineering department.
Often a wage and salary committee is constituted to help these departments in the task of controlling wages and
salaries.
5. Control over costs: Cost control is exercised by the cost accountant, by setting cost standards for material,
labour and overheads and making comparison of actual cost data with standard cost. Cost control is supplemented
by budgetary control systems.
6. Control over methods: Control over methods is accomplished by conducting periodic analysis of activities of
each department. The functions performed, methods adopted and time devoted by every employee is studied with
view to eliminate non-essential motions, functions and methods.
7. Control over capital expenditures: It is exercised through a system of evaluation of projects, ranking of
projects in terms of their rank power and appropriate capital to various projects. A capital budget is prepared for
the whole firm. A capital budgeting committee reviews the project proposes and approves the projects of
advantages to the firm. Capital budgeting, project analysis, break-even analysis, study of cost of capital, etc. are
some popular techniques of control over capital expenditure.
8. Control over research and development: Such activities are highly technical in nature so no direct control is
possible over them. By improving the ability and judgement of research staff through training programmes and
other devices, an indirect control is exercised on them. Control is also exercised by having a research on the
business.
9. Control over external relations: Public relations department is responsible for controlling the external relations
of the enterprise. It may prescribe certain measures for other operating departments which are instrumental in
improving external relations.
10. Overall control: It is effected through budgetary control. Master plan is prepared for overall control and all
the departments are made involved in this procedure. For effective control through the master plan, active support
of the top management is essential.

The control process:

The control process involves the following steps.

Fixation of standards first of all, the standard of desired performance should be

established. Standards serve as the criteria or tests by which actual results are to be
evaluated. Different standards of performance are set up for various operations.
Fixation of standards in terms of quantity, quality, time and costs indicates how the
performance is going to be appraised. Standards should be accurate, precise,
objective, acceptable and workable. They should be flexible, i.e., capable of being
changed when the circumstances so require. As far as possible, standards should be
laid down in quantitative or measurable terms. After setting the standards, the level
of achievement which will be regarded as satisfactory should be determined. The
desired level of performance should be reasonable and feasible. It should be in terms
of a range of maximum and minimum so as to maintain some flexibility.

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Measurement of performance after the fixation of standards, the actual

performance of the various individuals, groups and departments is measured. This
involves setting up the methods of collecting accurate and up-to-date information on
the progress of work, e.g., observation, inspection and reporting on a regular basis.
As far as possible, performance should be measured in quantitative terms. Where
such measurement is not possible, qualitative measures like opinion surveys may be
used. All measurements should be clear, comparable and reliable.
Measurement of performance against standards should be on a future basis so that
deviations are anticipated and necessary corrective actions are taken to prevent them,
but this may not be possible in all cases. So the next best course is to measure the
actual performance.

Comparing performance with standards the actual results are compared with
standards to find out the extent of deviations, if any. Such comparison is easy when
both standards and actual performance are expressed in quantitative terms. When the
deviations are beyond the permissible limits, an analysis is made to identify the
causes of the deviations. The causes may be controllable or uncontrollable. The
deviations and their causes are reported to the manager who can take corrective
actions all deviations need not be reported to top management.
Only such deviations should be reported which are exceptional. The control reports
should contain figures that are truly comparable from one period to another and from
one section of business to another. The reports should be presented in such a form
that the manager can obtain the birds eye view of the situation. They should not only
show the results, but also the reasons why the results are not satisfactory.

Correction of deviations the final step in the control process involves taking
corrective action so that deviations may not occur again and the organisational
objectives are achieved. After finding what has gone wrong, where and why
management can initiate remedial action. Corrective action may involve review and
revision of goals or standards, change in the assignment of tasks, provision for
additional resources or new facilities, improvement in the selection and training of
workers or reform in the techniques of direction. Thus, control function may require
changes in all other managerial functions. This shows the unity of the managers job
and the integrated nature of management process.

TYPES OF CONTROL:
Most control methods can be grouped into one of the two basic types:

Future-oriented controls and

Past-oriented controls.
Past-oriented Controls:
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These are also known as post-action controls and measure results after the process. They examine what
has happened in a particular period in the past. These controls can be used to plan future behaviour in
the light of past errors or successes.
Future-oriented Controls
These are also known as steering controls or feed-forward controls and are designed to measure results
during the process so that action can be taken before the job is done or the period is over. They serve as
warning-posts principally to direct attention rather than to evaluate e.g.: Cash flow analysis, funds flow
analysis, network planning etc.

Significance of Controlling:
Controlling is an important function of management. Without control, a manager cannot complete his
job. All other managerial functions are only preparatory steps for getting the work done, and controlling
is concerned with making sure that there is proper execution of these functions. Control is necessary
whenever a manager assigns duties and delegates authority to his subordinates. He must exercise control
over the actions of his subordinates so that the delegated authority is used properly.
The road signals at a road crossing appropriately illustrate the significance of control. Just
as road signals are essential to ensure accident free and smooth traffic, management controls are
necessary in any organization for its smooth functioning. By controlling, the manager ensures- that
resources are obtained and used economically and efficiently for the achievement of organizational
objectives. A good control system provides timely information to the manager, which is very much
useful for taking various decisions. 6ntrol simplifies supervision by pointing out the significant
deviations from the standards of performance. It keeps the subordinates under check and brings
discipline among them.
An effective system of control will help in achieving the following benefits:
1. Coordination. The size of modem business organizations is quite large. A large amount of capital
and large number of people are employed in them. This complicates the problem of control as there are
many units producing and distributing different products. In order to coordinate their activities, an
efficient system of control is necessary.
2. Corrective Action. An efficient system of control provides the basis for future action. Taking
corrective action may lead to modification of planning, organizing and directing. Control will also check
the mistakes being repeated in future.
3. Decision-making. Control is basic to decision-making. The process of control is complete when
corrective actions are taken. This involves making a right decision as to what type of follow up action is
to be taken. This will lead to accomplishment of organization objectives. According to W.T. lerome,
Control is needed both to simplify the making of subsequent decisions and to ensure the realization of
the objectives implicit in the original long-range policy decisions."
4. Better Planning. Control is the only means to ensure that the plans are being implemented in real
sense. It points out the shortcomings of planning by comparing the actual performance with the planned
standard and suggests steps to improve planning.
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5. Decentralization of Authority. The modern trend of business enterprises towards decentralization
calls for a systematic attempt-for controlling. Under decentralization, the authority of decision-making is
dispersed throughout the organization. Management must keep control in its hands to know whether the
authority is being used properly. Without adequate controls, decentralization cannot succeed.
6. Effective Supervision. Control facilitates effective supervision by pointing out significant deviations.
It keeps the subordinates under check and kings discipline among them. While control cannot cure
habitual dishonesty in all cases, Management is irresponsible if it does not make a reasonable effort to
provide order and discipline among its employees through effective control processes." A good system
of control detects the weak points very quickly. This enables the expansion of span of control at all
levels in the organization.

ESSENTIALS OF EFFECTIVE CONTROL SYSTEMS:

1. Suitable: The control system should be appropriate to the nature and needs of the activity. A large
firm calls for controls different from those needed for a small firm. In other words, control should be
tailored to fit the needs of the organisation. The flow of information concerning current performance
should correspond with the organizational structure employed. If a superior is to be able to control
overall operations, he must find a pattern that will provide control for individual parts. Budgets, quotas
and other techniques may be useful in controlling separate departments.
2. Timely and Forward Looking: The control system should be such as to enable the subordinates to
inform their superiors expeditiously about the threatened deviations and failures. The feedback system
should be as short and quick as possible. If the control reports are not directed at future, they are of no
use as they will not be able to suggest the types of measures to be taken to rectify the past deviations. A
proper system of control should enable the manager concerned to think of and plan for future also.
3. Objective and Comprehensive: The control system should be both, objective and understandable.
Objective controls specify the expected results in clear and definite terms and leave little room for
argument by the employees. This is necessary both for the smooth working and the effectiveness of the
system.
4. Flexible: The control system should be flexible so that it can be adjusted to suit the needs of any
change in the environment. A sound control system will remain workable even when the plans change or
fail outright. It must be responsive to changing conditions. It should be adaptable to new developments
including the failure of the control system itself. Plans may call for an automatic system to be backed up
by a human system that would operate in an emergency.
5. Economical: Economy is another requirement of every control. The benefit derived from a control
system should be more than the cost involved in implementing it. A small company cannot afford the
elaborate control system used by a large company. A control system is justifiable if the savings
anticipated from it exceed the expected costs in its working.
6. Acceptable to Organisation Members: The system should be acceptable to organisation members.
When standards are set unilaterally by upper level managers, there is a danger that employees will
regard those standards as unreasonable or unrealistic.
Prepared by A. Jayakumar.BBM, M.B.A, M.Com

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7. Motivate People to High Performance: A control system is most effective when it motivates people
to high performance. Since most people respond to a challenge, successfully meeting to tough standard
may well provide a greater sense of accomplishment than meeting an easy standard. However, if a target
is so tough that it seems impossible to meet, it will be more likely to discourage than to motivate effort.
8. Corrective Action: Merely pointing of deviations is not sufficient in a good control system. It must
lead to corrective action to be taken to check deviations from standard through appropriate planning,
organizing and directing. In the words of Koontz and O'Donnell, "An adequate control system should
disclose where failure is occurring, who is responsible for them and what should be done about them." A
control system will be of little use unless it can generate the solution to the problem responsible for
deviation from standards.
9. Reflection of Organisation Pattern: Organization is not merely a structure of duties and function; it
is also an important vehicle of control. In enforcing control the efficiency and the effectiveness of the
organisation must be clearly brought out.
10. Human Factor: A good system of control should find the persons accountable for results, whenever
large deviations take place. They must be guided and directed if necessary.
11. Direct Control: Any control system should be designed to maintain direct contact between the
controllers and controlled. Even when there are a number of control systems provided by staff
specialists, the foreman at the first level is still important because he has direct knowledge of
performance.
12. Focus on Strategic Points: A good system of control not only points out the deviations or
exceptions but also pinpoints them where they are important or strategic to his operations.

Prepared by A. Jayakumar.BBM, M.B.A, M.Com