Importance of Management Control
- Firstly, it is difficult to establish fully accurate standards of performance in large and complex organizations. An executive needs all kinds of timely information, which are not always available. Control is required to judge the accurate of standards.
- Secondly, there are several temptations in business. Employees are entrusted with large sums of money and valuable resources. In the absence of control employees may yield, to these temptations. An efficient control system helps to minimize dishonest behavior on the part of employees.
- Thirdly, in the absence of control employees may become lax in their efforts and their performance may be below normal. The signals at, a busy road crossing very well illustrates the significance of control. Just as road signals are essential to ensure accident- free and smooth traffic, managerial control is necessary to ensure smooth functioning of an organization.
It is through control that managers ensure that the resources of an organization are obtained and utilized effectively for the attainment of desired objectives; a good control system offers the following benefits:
- Guide to operations. Control guides behavior towards organizational goals. Lack of control results in errors behavior that may be detrimental to the goals. Like a traffic signal control guides the organization and keeps it on the right tract It measures progress towards goal and brings to light the adjustments, if any required in day-today operatic; A sound control system is needed to measure progress, to uncover deviations and to, indicate, corrective actions. It encourages Managers to become more explicit about, objectives.
- Policy verification. Control enables management to verify the quality of various plans. It may reveal that, plans need to be redrawn or goals need to be modified. Changes in the environment may render the original plans non-workable or deficient. Control helps to review, revise and update the plans. Without watchful and feed- back-of an, efficient control system even the best plans may not work out as expected. Management control not only reveals the need for corrective action, if also provides the information by which managers can judge whether their targets-are still appropriate in the changed environment.
- Managerial accountability.When a manager assigns some activities and delegate’s authority to his subordinates, he remains responsible for ultimate performance. Therefore, a manager should check up the performance of subordinates to ensure that they are utilizing the delegated authority in the-desired manner. In this way-control enables managers to discharge their responsibilities and at the same time delegate authority.
- Employee morale.Control creates an atmosphere of order and discipline in the organization. Absence of control leads to a lowering of morale amount employees because they cannot predict what will happen to them. They become the victims of the bias and repression of the superior.
- Psychological pressure. The existence of a sound control system inspiring employees to work hard and give better performance. When they know that they performance is being judged and their rewards are linked to such appraisal, the, try to contribute their best efforts.
- Efficiency and effectiveness. Control contributes to the efficiency of operations by focusing on goal accomplishment. Without control, managers will not be able to check on subordinates progress towards the targets and take corrective actions until after failure has occurred. A sound control system enables, managers to detect and correct mistakes before they become serious, the presence of control system helps to minimize wastage and loss. Control ensure efficiency by monitoring the allocation and use of resources. It focuses attention on the key factor essential to the success or effectiveness of the organization.
- Co-ordination in action. Control helps lo maintain equilibrium between means and ends. According to George Terry, “Controlling helps ensure that actions proceed according to plans, that proper direction is taken, and that the various factors are maintained in their correct inter-relationships, so that adequate consideration is attained.” Control provides unity of efforts. It enables managers to command the organization instead of being its victims.
Credit: Management Control Systems-MGU