Management Control Types There are three major types of management control over behavior in organizations. Each control has its own standards, its own monitoring system and its own system for corrective action when behavior does not meet standards. These three types of management controls are given below: Organizational Controls. The organizational controls refer to the formal rules and standard operating procedures that are communicated throughout the organization. Such controls are concerned with the total organization and may, therefore, be called administrative controls. The direction for organizational controls comes from the plans and purposes of the organization. In business organizations, this direction is often expressed in terms of market share, cost reduction, return on investment etc. These may be translated into specific performance measures such as sales quotation standard costs and budgets. Rewards for meeting standards, vary from a word of praise to salary increase and promotion. Social Controls. Social or Continue reading
Principles of Management
3 Important Roles of Organizational Hierarchy
Hierarchy refers to a system of organization that respects the chain of command whereby each agency is under supervision of a higher office. In many organizations, a group of managers is always above other employees in terms of knowledge and experience and is placed at the top while others follow based on their experience and the understanding of the organizational functions. Hierarchy is mostly present in government and other governmental institutions whereby each unit has its own powers, authority, and levels of management. Based on the chain of command, an individual communicates or reports to the immediate supervisor or the authority above him. Hierarchy was adopted mainly because it allows information flow given the fact that a junior officer cannot surpass the authority above him or her to report to the senior manager, unless it is necessary. Hierarchy plays an important role in any organization because it benefits the company Continue reading
Organizational Chart – Meaning, Definition, Features, Types, Advantages and Limitations
Organizational structure of a company can be shown in a chart. Such chart indicates how different departments are interlinked on the basis of authority and responsibility. It is a simple diagrammatic method of describing an Organizational structure. It indicates how the departments are linked together on the basis of authority and responsibility. Such organizational chart provides information of the organizational structure at a glance. Organizational chart is like a blue print of a building. It indicates the number and types of departments, superior-subordinate relationship, chain of command and communication. According to George Terry, organizational chart is “a diagrammatical form which shows important aspects of an organization, including the major functions and their respective relationships, the channels of supervision and the relative authority of each employee who is in-charge of each respective function”. Features of Organizational Chart The definition noted above indicates the following features of Organizational charts: Organizational chart is a Continue reading
Scope of Management Control System
A management control system refers to the framework by which managers can ensure control over the actions of their subordinates as well as control over the organization as a whole. It is a total system in the sense that it embraces all aspects of the firm’s operations so that the different parts of the organization are in balance with one another. According to Anthony, “A management control system is an explicit set of activities, policies, procedures and reports intended to institutionalize the, formal aspects of the management control process.” This definition reveals that the scope of management control system is not necessarily restricted to measuring, the performance of a subordinate manager toward the achievement of an objective established for, his function. Performance evaluation is only a part of management control. Control system should not be confused with a control method, which is merely one of the many elements of control Continue reading
Span of Management -Meaning and Factors Determining
An organization is characterized by the presence of a number of levels and departments. But more the levels are created, more will be the administrative cost due to additional staff required and more will be the difficulties to be encountered in communication and controlling. If this is so, why create departments and levels? Answer to this question is provided by the principle of span of management. This is basically the problem of deciding the number of subordinates to report directly to each manager. The principle states that there is a limit to the number of subordinates that each manager can effectively supervise. The term “span of management” is often referred to as span of control, span of supervisions, span of responsibility or span of authority. But the term “span of management” should preferably be used since span is one of management and not merely or control which is just important Continue reading
Relationship Between Organizational Structures and Cultures
Organizational Structure Organizational Structure is the strategic manner by which organizations arrange (or rearrange) themselves. This is essentially important in determining how organizations plan on utilizing their resources, particularly their human resources. To do so efficiently, certain questions need to have precise answers such as the specific responsibilities of each individual within the organization, to whom exactly they report and most importantly the coordination process that is to be implemented to bring together all these people and processes simultaneously. Bearing in mind that any framework followed needs to be consistent with the organizations main objectives, a formal channel defining the lines of authority from top to bottom (i.e. Hierarchy of Authority) is established which identifies clearly who is responsible for which personnel and/or tasks. Traditionally, the authority of decision-making has been a centralized process (i.e. directed to higher-level management), but with increasing challenges & innovation in recent times, many organizations Continue reading