Control can be defined as attempting to guarantee behavior and systems conform to, and support, predetermined corporate objectives and policies.
The basis of control is ability to measure. It compares what should happen with what actually happened or is likely to happen. Given the importance of measurement, a tendency exists to measure what is easy to quantify rather than what is important. Project managers must guard against this and focus on the key areas. Good control systems often detect and rectify problems before they become significant and managers should remember that prevention is better than cure. It is important to be proactive rather than reactive.
The control process entails the following steps:
i. Set Targets: ideally these is integrated into overall marketing planning.
ii. Predetermining the method of measurement: performance appraisal
iii. Measured results are compared with the predetermined targets and corrective action if required is undertaken
Control should be carried out in both the inputs and the outputs. This helps management to optimize the process and take strategic view. Typical inputs include:
• Finance: investments, working capital and cash.
• Operatives: capacity, usage, efficiency and application of machines, systems and other assets.
• People: Numbers, quality and skills of staff.
Output is measured in terms of overall system performance. Performance is derived from combination of efficiency and effectiveness.
• Efficiency: How well utilized are the inputs? Do we make maximum use of finances, minimize cost and operate at optimal levels of capacity.
• Effectiveness: Are we doing the right things? This relates to actual performance and will include sales revenue, profit, market share and measures of customer satisfaction.
It is better to pursue effectiveness.
What makes an Effective Control System?
Control systems require careful design. Generic principles exist which are common to all effective control mechanism. It is important to retain a degree of flexibility and common sense.
Six principles to ensure effective control.
• Involvement: It is achieved by encouraging participation in the process. Management can achieve desired results through consultation. Staff could contribute to setting targets. Their development needs could be considered along with the required tasks. Correctly applied, this enhances morale, promotes ownership and develops skill base of employees.
• Target Setting: The target criteria should be objective and measurable. How this is assessed needs to be communicated and agreed in advance. Targets needs to be challenging but achievable.
• Focus: It recognizes the differences between the symptoms and the source of the problem. While it may be expedient to treat the symptoms, tackling the source of the problem should eliminate it once and for all.
• Effectiveness: The tendency exists to measure efficiency as opposed to effectiveness. Efficiency is the usage and productivity of assets. Effectiveness is about doing the right things. In reality we tend to apply efficiency measures to areas easiest to measure. The system should measure what is important not what is easy to quantify. The measurement should be accurate, valid and consistent.
• Management by Exception: Management attention is directed to areas of need. Identifying what constitutes an exception to the norm is useful exercise in its own right. The process involves setting tolerances and benchmarks for normal operations. Management action becomes a priority when pre set limits are breached.
Problems of Control
Three problems are commonly associated with the control systems.
1. The System can be Costly: The benefits of control and subsequent improvements are outweighed by the cost of the control mechanism. This often relates to large bureaucratic systems- layer upon layer of administration is built upon each. This is self serving rather than customer focused, often absorbing resources that would be more effectively deployed in core activities.
2. Control Systems Stifle Effort and Creativity: such systems promote uniformity and conformance to pre set targets. They become barriers to innovation.
3. Control promotes a view of inspection as opposed to developments systems often deal with the symptom rather than the root of the problem. This leads to constant fire fighting and looking for quick fixes as opposed to developing a better overall method of operation. The effect is to filter and /or suppress information from those with the power to radically overhaul a poor system.
