The facts are processed, and presented to management. Unfortunatel… A standard means a benchmark. For employees, performance may be measured in terms of quality or quantity of output. Image Guidelines 4. It is very important for managers to communicate their organization’s goals, standards an… Moreover, measurement has to be made in such a way that it can be easily explained to and understood be employees and others. We may need to motivate our employees to work harder or to supply them with new machinery. Franklin E. Folts suggested that, “After a fixed interval, the whole process and procedure of control should be reviewed. An R&D department expresses its targets in terms of number of patents expected to be filed every quarter. E.g., the diameter of a steel bar is given by 2 ± 0.1 cm. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. The deviations are set right by the controlling function. And correction of deviations is nothing but performance of a number of other management functions. The four-step process of controlhelps you to ensure that appropriate goals are set, evaluat… The managers take necessary corrective actions. Management thinkers have also confirmed these steps. The standards the managers desire to obtain in each key area should be defined as far as possible in quantitative terms. Essays, Research Papers and Articles on Business Management, Process of Control of Activities In An Organisation : 5 Steps, Process of Control in an Organisation: 3 Steps, Steps Involved in Performance Appraisal Process, Functions of Organizational Control Process | Management, Essay on Organizational Development | Management, Advantages and Disadvantages of Franchising. There are four steps in controlling as a process, namely: 4. Does it mean that the standard of performance has been determined long time ago and it is not revised in the recent past? Control is a regulatory process of establishing standards to achieve organizational goals, comparing actual performance to the standards, and taking corrective action when necessary to restore performance to those standards. So, if you’re implementing this system in your company, these are the steps you’ll have to follow: 1. As an example consider a salesperson who repeatedly fulfills sales quota for a given territory. The basic control process includes the following steps: Setting performance standards: Managers must translate plans into performance standards. cannot be put in watertight Compartments with one function having nothing to do with the other. Disclaimer Copyright, Share Your Knowledge Over-achievement may mean under-utilisation of manpower and such inappropriate use can result in lost opportunities for the organisation. Welcome to EconomicsDiscussion.net! Control is achieved when behavior and work procedures conform to standards and when company goals are accomplished. It only spotlights one or the other deficiency in performance of one or another management functions. So it is first of all necessary to determine the cause of the deviation and take corrective action thereafter. Performance itself is measured once the frequency and form of monitoring system are determined. There are some tangible standards in terms of weight, colour, time, money etc. Before publishing your Articles on this site, please read the following pages: 1. Qualitative standards also play an important role in the control process, although managers and subordinates are not always aware of these. A sales increase standard of 10% may have to be modified when a new competitor comes on the scene. These standards also serve as guidelines against which the actual performance is measured. Formulation of guidelines is no simple task. Standards may be tangible or intangible, vague or specific. … Establishing Standards: The first step in the control process is establishment … There could be a case where actual performance is much higher than the standard and such case implies that there is need for revising the standard. establishing standards 1. Steps in the Control Process. ii. The steps are: 1. Comparison of Actual and Standard Performance: The third step in the process of control involves the comparison of actual performance with standard performance. Standards can also be set for manufacturing lead time, turnover rate, maintenance and repair turnaround times, inventory levels and quality. The next step in the control process is increasing performance. State these steps. Standards can also be set for manufacturing lead time, turnover rate, maintenance and repair turnaround times, inventory levels and quality. 3. For a production manager, performance may be expressed in terms of unit cost, quality or volume. Proper standards and methods for measuring performance helps a company tweak their processes as required for better results. Or, perhaps the work targets need scaling down. The control process involves initially establishing standards and thereafter measuring and comparing performance’. Establishing Standards- The first step in control process is establishing standards. It is really important decision making to identify the real causes of performance problems rather than just the symptoms. It is equally important that the standards fixed are realistic and attainable, neither too high nor very low. (f) It should be set in consultation with people who are to active them and also on scientific analysis, and. Five aspects of the performance … Managers should concentrate only on major deviations. Managers, however, must be allowed some discretion to use their best judgements because most problems they face cannot be adequately proceduralised. Control may be seen as a process by which the management assures that the actual activities conform to the planned activities. If the members of an organization know their goals clearly, they will invest their entire focus in achieving them. The control process begins with establishing standards. Control, according to this argument, should rest content with detection of deviations. This is apparent if large number of employees exceeds the standard by a wide margin or if no one ever meets the standard. The controlling is more concerned with control methods rather than control over results. Examine the manner in which health care leaders progress through each phase of the control process to manage organizations. Perhaps, there is need to acquire modern cutting edge technology, or to re-train workers in work methods. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Taking Corrective Action. The four step process of control helps you to ensure that appropriate goals are set, evaluated and modified when there is a discrepancy. 1. The controlling function will be unnecessary to the management if other functions of management are performed properly. Having known what has gone wrong, where, and why, the manager will need to decide on corrective action. 3. CONTROLPROCESSBy : Rohan Solanki 2. To make sure these standards are upheld, your company uses a control system, which monitors and evaluates the progress toward your goals. D) quantifiable. If results are intangible or qualitative, personal observation will be used to find out the extent of deviation. A standard is a target against which the performance or the operations can be compared to. Whatever standards are established. What, for example, can be a fool-proof test to measure consumer satisfaction? The quantitative measurement should be done in cases where standards have been set in numerical terms. The measurement of performance is a constant, ongoing activity for most organisations and for control to be effective, relevant performance measures must be valid. While the first step in the control process establishes standard the second step asks managers and others to measure the performance is in line with the set standards. This is because the main aim of controlling is to direct a business’s actions towards its goals. Standards … or ABC Ltd wants to expand its product line. It may be either higher or lower, so the standards are usually specified with a tolerance. One function easily and naturally combines and integrates with the other. i. One final point may be noted in this context. These steps are taken to set the required standards of performance, measure actual performance against set standards, compare the performance with set standards to identify deviations if any, and to initiate corrective measures to ensure that predetermined standards are achieved in future. The second step of process of control is to measure the actual performance in the same terms in which standards have been established. Apprising Performance 3. Standards are expressions of goals of the enterprise or the department. In less technical kinds of work, formulation of standards is very complex task. The core of control lies in setting up of standards against which the actual performance is to be measured; preferably in quantitative terms but could even be qualitative. One key aspect of taking corrective action is problem-solving. They must be modified according to plans and goals to fit realities as conditions change.”. These objectives are further divided into specific objectives for individual departments/divisions of the organization which become standards of performance for respective departments/divisions. Therefore, to the extent possible, standards should be measurable. Account Disable 12. Determine What to Control: The first step in the strategic control process is determining the … TOS4. … The last step in the control process, namely, swift correction of deviations discovered during monitoring of work performance, highlights interrelationship between management functions—planning, organizing, directing, staffing, controlling, and coordinating. Explain … The standards provide the overall framework for establishing and maintaining internal control and for identifying and addressing major performance and management challenges and areas at greatest risk of fraud, waste, abuse, and mismanagement. Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished. If there is any imperfection in the planning and actual performance, control will be needed. Standard costs, Standard times for the operations to be carried out on a component etc., are examples of such standards. 1. Analyse the problem deeply and find ways to boost the performance. A rightful corrective action can be taken only when the cause of deviations is clearly established. For instance, an IT company expresses its plans/standards in terms of number of new clients to be added every quarter. All of the following are reasons … Steps in the control process cycle. or ABC Ltd wants to expand its product line. They have to concentrate on results, and should be expressed in quantitative terms. 2. Share Your Word File Setting plan, establishing the structure and directing the people do not guarantee that every thing in the organization is going on well. The general objectives are translated into departmental objectives with defined standards of output, quality and cost. The first and basic step in control is establishment of standards of performance for ensuring that the performance is in accordance with the plans. BEVERAGE PRODUCTION CONTROL 2. These reports should be communicated to the concerned people in writing, verbally, or through enterprise resource planning (ERP) systems. Like business objectives, they should be expressed in measurable term. Identify how the corrective measures can be applied in the individual or group duties. A vague goal of merely doing well and trying your best will get you only so far. The manager should select some of such standards which may best reflect the goals of department and which will best show him whether or not these goals are being met. Now, determining the precise action to be taken will depend on three things: the standard, the accuracy of the measurements that determine that a deviation exists, and the diagnosis of the person or device investigating the cause for the deviation. The manager takes necessary corrective actions so that deviations may not occur again. (2) Technical standards might include specifying machine tolerances, acceptable levels of quality, items produced per hour on an assembly line and bid specifications developed by the engineering department. Read this article to learn about the four procedures for establishing a standard costing system. Set your quality standards. If the planned and actual processes are not running on the same lines, then the required corrective action can be taken. Hence, sophisticated feedback systems may be necessary to provide promptly the information management needs to make comparisons. The control process cycle shows the cyclical process of control which comprises establishing a standard, measuring performance, comparing performance with standard and taking corrective actions. Valid performance measurement, however difficult to obtain, is necessary to maintain effective control. It is important to communicate to the concerned people about the importance of achieving the set standards in their work performance. Accurately evaluating the safety level for a specific control device in the context of a potential hazardous event poses a major and difficult problem for many control engineers. Standards expressed in general terms should be avoided. The standards the managers desire to obtain in each key area should be defined as far as possible in quantitative terms. Measuring the performance is the second step of establishing control. Standards are the criteria that enable managers to … Before taking any corrective action, managers should try to ascertain the reasons for the occurrence of deviations. The standard may have been too high or too low to begin with. If the comparison does not yield results or measurements that are acceptable standards, action may be called for. This involves the laying down of methods of evaluating performance, e.g., observation, inspection and reporting. Planning identifies the activities and controlling regulates the activities. The comparison is easy where standards have been set quantitatively, for example, in case of production and marketing, on the hand. The supervisor is doing which step of the control process? Management, Functons, Controlling, Organisational Control Process. Standardization can be described as the “activity of establishing a standard”. According to Dale the control reports should meet there criteria: (a) It must produce figures that are truly comparable from one period to another and from one section of the business to another. A final response to the outcome of comparing performance to standards is to change the standards. By setting a high standard to work toward, you raise your chances of producing a perfect product and thus increasing customer satisfaction. this process consists of 4 basic steps: establishing performance standards, measuring performance, comparing performance against standards, and evaluation/corrective action performance standards first step in the control process; targets set by management against which actual performance is compared at a future date Such action may be using better raw materials, adjusting the equipment, paying closer attention to the work procedures or giving more training to the employees. This action is generally appropriate when performance more or less measures up to the standard. In these areas standards are laid down in intangible terms. The first step in the control process is establishment of standards of performance. The key issue here is how much leeway is permissible before remedial action is taken. Associations and agencies worldwide have made considerable progress toward establishing standards and implementation guidelines for safety instrumented systems. The fault may be those standards fixed were unattainable rather than the subordinate’s inefficiency. Some relevant questions that crop up at this stage are: (1) What is the frequency with which performance has to be measured — hourly, daily, weekly, yearly? If the standards are found to be defective they will be modified or set up in the light of observations. In case of mass production, number of standard labour hours can be worked out but if some customised or unique product is to be produced, it may involve more time and the number of standard labour hours concept may not work. In an industrial enterprise, standards could include sales and production targets, work a… When a manager is concerned with controlling sales, daily, weekly or monthly sales figures represent actual performance. This comparison will reveal the deviation between actual and desired results. Such comparison will reveal the deviations from the standards. If there is positive deviation, examine in detail how the employee could save so much time. Change the manner in which deviations are analysed and interpreted. But for its effective working, they need to follow certain steps. Selling standards hardly serves any purpose unless some steps are taken to measure actual performance. Project control surveys provide consistent and accurate horizontal and vertical control for all … But the argument is not valid. Management is an integrated process and system. Standards are best measured when they are A) efficient B) ethical C) broad D) quantifiable E) narrow. (3) Who has to be involved — the manager, an assistant, a staff department? Standards are, by definition, simply the criteria of performance. 1. 17.5, the corrective action may be to alter the planning and control system in any of the following ways: 1. (b) They must be coordinated so that they not only portray the results in different sections of the business, but also make plain the reasons why the business is or is not doing so well as could be expected. Does current sales revenue show consumers are happy with the goods or services produced by the organization? The controlling function will be unnecessary to the management if other functions of management are performed properly. These standards attempt to match the risk inherent in a given situation to the required integrity level of the safety system. Performance can be measured by observations, inspection and reporting. (d) It should be flexible and realistic in nature. Control helps to join the short and the long range plans into a state of greater consistency. There are various ways of measuring performance: Many U.S. firms ape now using internal auditors who make use of all these methods. Set your quality standards. to issue standards for internal control in government. Copyright 10. Performance of Legal Advisor or Financial Advisor is similarly difficult to measure. The PCAOB seeks to establish and maintain high quality auditing and related professional practice standards for audits of public companies and other issuers, and broker-dealers in support of the PCAOB mission to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. Success or failure of planning depends upon the result of success or failure of controlling. The next logical step in the control process is to measure the actual performance of the employees of the organization. 3. Implementing a quality control program has numerous benefits for your business. Privacy Policy 9. It may even call for developing new skills, by inducting new people or through training and development of the existing set of people. On a broader level, control standards reflect organisational strategy. Only when unexpected results occur, there is a need for reports and corrective action. Determination of Standards for Work of a Technical Nature, iii. Reports and explanations received from the subordinates will be valuable in correct diagnosis of the deviation. Standards Content Guidelines 2. A good control system should provide some basis for helping the manager. The targets set have to be attainable and they have to be the right ones. Standards may be for Organization as also for its Departments/Divisions, i. Establishment of Cost Centers: A cost center is a location, person or item of equipment (or a group of these) for which costs may be ascertained and used for the purpose of cost control.
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