How Business Control Process Works?
“Management control is a process by which managers guarantee that resources are obtained and used efficiently and competently in the achievement of managerial objectives. ”
Management control is a process by which managers guarantee that resources are obtained and used efficiently and competently in the achievement of managerial objectives. The system, processes and techniques are same, whatever the area of their implication may be.The main steps of control may bodily be classified into four categories. Fixing standards, measurement of performance, comparison between actual and standard performance and correction of deviation from standards.
Fixing standards means is a way of finding out as to what things should be incorporated into a business and what should be left out. It serves as criterion, a test of performance. In the context of a business enterprise, standards refer to objectives to be achieved. In order to judge that whether actual performance is along the right line, there have to be certain standards.
At the very outset, i.e. at the planning stage only a variety of standards of performance is set up. As a matter of fact, planning is the basis of control. As the standards serve as the basis of control, they should be determined carefully, scientifically, and objectively.
Even where standards are set in regard to intangible things like customer or employer opinion, these must be stated in easily measurable units like variations in sales or performance.
The next thing that comes to the fore is the measurement of every kind of performance in a business. This involves the laying down of methods of evaluating performance of various individuals, groups or units by observation, inspection and reporting.
The quantitative measurement should be done in cases where standards have been set in numerical terms. If a standard measurement is prescribed, then it becomes quite easy to measure the actual performance.
Then, we have to draw a parallel between what has been achieved in actuality and what was set as a standard. It involves two steps, first is finding out the extent of deviations, and second is identifying the causes of such deviations.
Comparison is easy where standards have been fixed quantitatively as in production and marketing. In other cases where results are intangible and cannot be measured quantitatively, direct personal observation, inspection and reports are a few ways that can be used for evaluation.
It is the duty of the evaluator to pinpoint every kind of shortcomings as well as the factors that caused these inadequacies. After the identification of the causes of deviations suitable steps are taken to avoid deviation in future. This process is recognized as correction of deviation from standards.
Author - DeeKay
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