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Controlling is an important function of management. It is the process that measures current performance and guides it towards some predetermined objectives. Under primitive management, control was undertaken only when something went wrong and the objectives of control was to reprimand the person responsible for these events and take action against him. The modern concept of control envisages a system that not only provides a historical record of what has happened to the business as a whole but also pinpoints the reasons why it has happened and provides data that enable the manager to take corrective steps, if he finds he is on the wrong track. Therefore, there is no intention to punish the person for wrongdoing, but to find out the deviations between the actual performance and the standard performance and to take steps to prevent such variances in future. The concept of control is often confused with lack of freedom. The opposite of control is not freedom but chaos or anarchy. Control is fully consistent with freedom. In fact, they are interdependent. Without control, freedom cannot be sustained for long. Without freedom, control becomes ineffective. Both freedom and accountability are embedded in the concept of control.
Control is the process through which managers assure that actual activities conform to planned activities.
According to Brech, “Control is checking current performance against predetermined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance.”
According to George R. Terry, “Controlling is determining what is being accomplished i.e., evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to plans.”
According to Billy E. Goetz, “Management control seeks to compel events to conform plans”.
According to Robert N. Anthony, “Management control is the process by which managers assure that resources are obtained and used effectively and efficiently.”
In the words of Koontz and O’Donnell, “Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans.”
In the words of Haynes and Massie, “Fundamentally, control is any process that guides activity towards some predetermined goal. The essence of the concept is in determining whether the activity is achieving the desired results”.
In the words of J. L. Massie, “Control is the process that measures current performance and guides it towards some predetermined goals.”
In the words of Henry Fayol, “Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and the principles established. Its object is to find out the weakness and errors in order to rectify them and prevent recurrence. It operates on everything, i.e., things, people and actions”.
From the above definitions it is clear that the managerial function of control consists in a comparison of the actual performance with the planned performance with the object of discovering whether all is going on well according to plans and if not why. Remedial action arising from a study of deviations of the actual performance with the standard or planned performance will serve to correct the plans and make suitable changes. Controlling is the nature of follow-up to the other three fundamental functions of management. There can, in fact, be not controlling without previous planning, organising and directing. Controlling cannot take place in a vacuum.
Managerial control has certain characteristic feature. They are:
1. Control is the function of every manager. Managers at all levels have to perform this function to contribute to the achievement of organisational objectives.
2. Control is concerned with setting standards, measurement of actual performance, comparison of actual performance with predetermined standards and bringing to light the variations between the actual performance and the standard performance.
3. Control implies taking corrective measures. The object in checking the variations or deviations is to rectify them and prevent their recurrence. It is only action which adjusts performance to predetermined standards whenever deviations occur.
4. Control leads to appraisal of past activities. The deviations in the past are revealed by the control process. Corrective actions can be initiated accordingly.
5. Control is linked with future, as past cannot be controlled. It should anticipate possible deviations and to think of corrective action for the control of such deviations in the future. It is usually preventive as presence of control system tends to minimise wastages, losses and deviations from standards.
6. Control can be exercised only with reference to and or the basis of plans. To quote Mary Cushing Niles – “Whereas planning sets the course, control observes deviations from the course or to an appropriately changed one”.
7. Information or feedback is the guide to control. The feedback is helpful to the manager to determine how far the operations are proceeding in conformity with plans and standards, and where remedial action is called for.
8. Control involves continuous review of standards of performance and results in corrective action which may lead to change in the performance of other functions of management. This makes control a dynamic and flexible process.
9. To some people, control is opposite of freedom. This is not true. Control is based on facts and figures. Its purpose is to achieve and maintain acceptable productivity from all resources of an enterprise. Therefore, control aims at results and not at persons. It is for correcting a situation, and not for reprimanding persons.
10. Control is a continuous activity. It involves constant analysis of validity of standards, policies, procedures etc.
By now it is quite clear that there are two crucial aspects to the management of any project – ‘planning’ and ‘control’. These are essential functions for every successful manager – without them, projects are generally not successful, not completed on time, or cost more than they should. The successful manager must always ensure that projects are based on excellent plans and followed by good control during implementation. ‘Planning’ is the setting of realistic goals and choosing effective ways to achieve these goals. Goals must be understandable, achievable and able to be assessed! If a goal is not clear, it cannot be assessed and, hence, it cannot be managed. If a goal is unrealistic, any plan will also be unrealistic and, therefore, unlikely to succeed. The successful manager must ensure that a project’s plan is clearly defined and realistic.
‘Control’ is the process by which the manager ensures that all actions are consistent with the plan – all actions are, therefore, directed at achieving the stated goals. ‘Control’ is the systematic effort of comparing performance to plans.
“Planning is required at the very outset of management whereas control is required at the last stages. If planning is looking ahead, control is looking back.”
Control and planning are interrelated so closely that they cannot be separated from each other. Without control all the planning is fruitless because control consists of the steps taken to ensure that the performance of the organisation conforms to the plans.
In other words control is concerned with the actual performance in relation to the standards set in advance and the correction of deviations to ensure attainment of objectives. Planning is required at the very outset of management whereas control is required at the last stages. If planning is looking ahead, control is looking back. In fact, control is the process of checking to determine whether or not proper progress is being made towards the objectives and goals set by management while doing planning. Often it is said that planning is the basis, action is the essence, delegation is the key, information is the guide and control is the lifeblood of the success of any business enterprise. Organisational objectives cannot be achieved without planning and planning alone cannot be successful. If extra efforts are put in planning and control is ignored, a business may suffer from a number of administrative problems. These difficulties may be highly detrimental for the business in the long run.
Effective control through efficient superiors can only be a guarantee for success. The control system must be appropriate to the needs and circumstances of the enterprise. Control is a fundamental management function that ensures work accomplishment according to plans. The purpose of control is to ensure that everything in an organisation occurs in conformity with pre-determined plans. Control also ensures that there is no kind of indiscipline and incompetence in the organisation and employees are not able to put undue pressure on the management.
Some people are not in favour of control because they feel that control is always used against the employees. They advocate automatic control rather than forced one. But a balanced viewpoint is that both the management and the employees should be put under some kind of control. Control should be engrained in the basic policies of any type of business organisation.
There are three basic steps in a control process:
1. Establishing standards
2. Measuring and comparing actual results against standards.
3. Taking corrective action.
1. Establishing Standards: The first step in the control process is to establish standards against which results can be measured. The standards the managers desire to obtain in each key area should be defined as far as possible in quantitative terms. Standards expressed in general terms should be avoided. Standards need to be flexible in order to adapt to changing conditions. The standard should emphasis the achievement of results more than the conformity to rules and methods. If they do not do so, then people will start giving more importance to rules and methods than to the final results. While setting the standards, the following points have to be borne in mind:
a. The standards must be clear and intelligible. If the standards are clear and are understood by the persons concerned, they themselves will be able to check their performance.
b. Standards should be accurate, precise, acceptable and workable.
c. Standards are used as the criteria or benchmarks by which performance is measured in the control process. It should not be either too high or too low. They should be realistic and attainable.
d. Standards should be flexible i.e., capable of being changed when the circumstances require so.
2. Measuring and Comparing Actual Results against Standards: The second step in the control process is to measure the performance and compare it with the predetermined standards. Measurement of performance can be done by personal observation, by reports, charts and statements. If the control system is well organised, quick comparison of these with the standard figure is quite possible. This will reveal variations. After the measurement of the actual performance, the actual performance should be compared with the standards fixed quickly. A quick comparison of actual performance with the standard performance is possible, if the control system is well organised. While comparing the actual performance with the standards fixed, the manager has to find out not only the extent of variations but also the causes of variations. This is necessary, because some of the variations may be unimportant, while others may be important and need immediate corrective action by the manager.
3. Taking Corrective Action: After comparing the actual performance with the prescribed standards and finding the deviations, the next step that should be taken by the manager is to correct these deviations. Corrective action should be taken without wasting of time so that the normal position can be restored quickly. The manager should also determine the correct cause for deviation. Taking corrective action can be achieved in the following way:
a. The manager should try to influence environmental conditions and external situations in such a way as to facilitate the achievement of goals.
b. He should review with his subordinates the instructions given earlier so that he may be able to give clear, complete and reasonable instructions in future.
c. There are many external forces which cannot be adjusted by the manager. They have to be accepted as the facts of the situation, and the executives should revise their plans in the light of these changing forces.
Most control methods can be grouped into one of the two basic types:
1. Past-oriented controls.
2. Future-oriented controls.
3. Concurrent Control.
1. Past-oriented Controls: These are also known as post-action controls and measure results after the process. They examine what has happened in a particular period in the past. These controls can be used to plan future behaviour in the light of past errors or successes.
2. Future-oriented Controls: These are also known as steering controls or feed-forward controls and are designed to measure results during the process so that action can be taken before the job is done or the period is over. They serve as warning-posts principally to direct attention rather than to evaluate, e.g., Cash flow analysis, funds flow analysis, network planning etc.
3. Concurrent Control: Concurrent control takes place while an activity is in progress. It involves the regulation of ongoing activities that are part of transformation process to ensure that they conform to organizational standards. Concurrent control is designed to ensure that employee work activities produce the correct results. Concurrent controls monitor ongoing employee activity to ensure consistency with quality standards. These controls rely on performance standards, rules, and regulations for guiding employee tasks and behaviours. Their purpose is to ensure that work activities produce the desired results. As an example, many manufacturing operations include devices that measure whether the items being produced meet quality standards. Employees monitor the measurements; if they see that standards are not being met in some area, they make a correction themselves or let a manager know that a problem is occurring. Since concurrent control involves regulating ongoing tasks, it requires a thorough understanding of the specific tasks involved and their relationship to the desired and product. Concurrent control sometimes is called screening or yes-no control, because it often involves checkpoints at which determinations are made about whether to continue progress, take corrective action, or stop work altogether on products or services.
1. Timely and Forward Looking: The control system should be such as to enable the subordinates to inform their superiors expeditiously about the threatened deviations and failures. The feedback system should be as short and quick as possible. If the control reports are not directed at future, they are of no use as they will not be able to suggest the types of measures to be taken to rectify the past deviations. A proper system of control should enable the manager concerned to think of and plan for future also.
2. Suitable: The control system should be appropriate to the nature and needs of the activity. A large firm calls for controls different from those needed for a small firm. In other words, control should be tailored to fit the needs of the organisation. The flow of information concerning current performance should correspond with the organizational structure employed. If a superior is to be able to control overall operations, he must find a pattern that will provide control for individual parts. , quotas and other techniques may be useful in controlling separate departments.
3. Reflection of Organisation Pattern: Organization is not merely a structure of duties and function, it is also an important vehicle of control. In enforcing control the efficiency and the effectiveness of the organisation must be clearly brought out.
4. Acceptable to Organisation Members: The system should be acceptable to organisation members. When standards are set unilaterally by upper level managers, there is a danger that employees will regard those standards as unreasonable or unrealistic.
5. Objective and Comprehensive: The control system should be both, objective and understandable. Objective controls specify the expected results in clear and definite terms and leave little room for argument by the employees. This is necessary both for the smooth working and the effectiveness of the system.
6. Flexible: The control system should be flexible so that it can be adjusted to suit the needs of any change in the environment. A sound control system will remain workable even when the plans change or fail outright. It must be responsive to changing conditions. It should be adaptable to new developments including the failure of the control system itself. Plans may call for an automatic system to be backed up by a human system that would operate in an emergency.
7. Motivate People to High Performance: A control system is most effective when it motivates people to high performance. Since most people respond to a challenge, successfully meeting to tough standard may well provide a greater sense of accomplishment than meeting an easy standard. However, if a target is so tough that it seems impossible to meet, it will be more likely to discourage than to motivate effort.
8. Economical: Economy is another requirement of every control. The benefit derived from a control system should be more than the cost involved in implementing it. A small company cannot afford the elaborate control system used by a large company. A control system is justifiable if the savings anticipated from it exceed the expected costs in its working.
9. Corrective Action: Merely pointing of deviations is not sufficient in a good control system. It must lead to corrective action to be taken to check deviations from standard through appropriate planning, organizing and directing. In the words of Koontz and O’Donnell, “An adequate control system should disclose where failure is occurring, who is responsible for them and what should be done about them.” A control system will be of little use unless it can generate the solution to the problem responsible for deviation from standards.
10. Focus on Strategic Points: A good system of control not only points out the deviations or exceptions but also pinpoints them where they are important or strategic to his operations.
11. Human Factor: A good system of control should find the persons accountable for results, whenever large deviations take place. They must be guided and directed if necessary.
12. Direct Control: Any control system should be designed to maintain direct contact between the controller and controlled. Even when there are a number of control systems provided by staff specialists, the foreman at the first level is still important because he has direct knowledge of performance.
The scope of control is very wide. A well designed plan of control (or control system) covers almost all management activities. According to Holden, Fish and Smith, the main areas of control are as follows:
1. Control over organisation: Control over organisation is accomplished through the of organisation chart and organisation manual. Organisation manual attempts at solving organisational problems and conflicts making long-range organisation planning possible, enabling rationalisation of organisation structure, helping in proper designing of organisation and department.
2. Control over policies: The success of any business organisation to a large extent, depends upon, how far its policies are implemented. Hence the need of control over policies is self-evident. In many enterprises, policies are controlled through policy manuals.
3. Control over wages and salaries: Such type of control is done by having programme of job evaluation and wage and salary analysis. This work is done either by personnel department or industrial engineering department. Often a wage and salary committee is constituted to help these departments in the task of controlling wages and salaries.
4. Control over personnel: The statement that ‘Management is getting the work done through people’ underlines sufficiently the importance of control of personnel. All employees working at different levels must perform their assigned duties well and direct their efforts in controlling their behaviour. Personal Director or Personnel Manager prepares control plan for having control over personnel.
5. Control over costs: Cost control is exercised by the cost accountant, by setting cost standards for material, labour and overheads and making comparison of actual cost data with standard cost. Cost control is supplemented by budgetary control systems.
6. Control over research and development: Such activities are highly technical in nature so no direct control is possible over them. By improving the ability and judgement of research staff through training programmes and other devices, an indirect control is exercised on them. Control is also exercised by having a research on the business.
7. Control over external relations: Public relations department is responsible for controlling the external relations of the enterprise. It may prescribe certain measures for other operating departments which are instrumental in improving external relations.
8. Control over capital expenditures: It is exercised through a system of evaluation of projects, ranking of projects in terms of their rank power and appropriate capital to various projects. A capital budget is prepared for the whole firm. A capital budgeting committee reviews the project proposes and approves the projects of advantages to the firm. Capital budgeting, project analysis, break-even analysis, study of cost of capital, etc. are some popular techniques of control over capital expenditure.
9. Control over methods: Control over methods is accomplished by conducting periodic analysis of activities of each department. The functions performed, methods adopted and time devoted by every employee is studied with a view to eliminate The Process of Controlling non-essential motions, functions and methods.
10. Overall control: It is effected through budgetary control. Master plan is prepared for overall control and all the departments are made involved in this procedure. For effective control through the master plan, active support of the top management is essential.
1. Budgeting: A budget is a statement of anticipated results during a designated time period expressed in financial and non-financial terms. Budgets cover a designated time period – usually a year. At stated intervals during that time period, actual performance is compared directly with the budget targets and deviations are quickly detected and acted upon. E.g. of Budgets: Sales budget, production budget, capital expenditure budget, cash budget, master budget etc.
2. Standard Costing: The cost of production determines the profit earned by an enterprise. The system involves a comparison of the actuals with the standards and the discrepancy is called variance. The various steps involved in standard costing are:
a. Setting of cost standards for various components of cost e.g.: raw materials, labour etc.
b. Measurement of actual performance.
c. Comparison of actual cost with the standard cost.
d. Finding the variance of actual from the standard cost.
e. Findings the causes of variance.
f. Taking necessary action to prevent the occurrence of variance in future.
3. Responsibility Accounting: Responsibility accounting can be defined as a system of accounting under which each departmental head is made responsible for the performance of his department.
4. Reports: A major part of control consists of preparing reports to provide information to the management for purpose of control and planning.
5. Standing Orders, Rules and Limitations: Standing orders, rules and limitations are also control techniques used by the management. They are issued by the management and they are to be observed by the subordinates.
6. Personal Observation: A manager can also exercise fruitful control over his subordinates by observing them while they are engaged in work.
1. Self-control: Each employee must exercise self-control and do what is expected at work most of the time on most work related matters, as no enterprise can exist self-control. Self-control stems from the employee’s ego, orientation, training and work attitudes.
2. Group control: It affects individuals both in output and behaviour. Group norms of doing a good job exert pressures on the individual to perform and to follow work rules.
3. Policies and procedures: They are guides to action for managers to use in controlling behaviour and output of employees. They can, for example, protect the firms’ resources and equipment and require employee’s presence for appropriate work times.
4. Critical Path Method (CPM): A critical path consists of that set of dependent tasks (each dependent on the preceding one), which together take the longest time to complete. A CPM chart can define multiple, equally critical paths. The tasks, which fall on the critical path, should be noted in some way, so that they may be given special attention. One way is to draw critical path tasks with a double line instead of a single line. Tasks, which fall on the critical path, should receive special attention by both the project manager and the personnel assigned to them. The critical path for any given method may shift as the project progresses; this can happen when tasks are completed either behind or ahead of schedule, causing other tasks which may still be on schedule to fall on the new critical path.
5. GANTTChart: Henry Laurence Gantt (1861-1919) was a mechanical engineer, management consultant and industry advisor. He developed Gantt charts in the second decade of the 20th century. Gantt charts were used as a visual tool to show scheduled and actual progress of projects. It was an innovation of worldwide importance in the 1920s. Gantt charts were used on large construction projects. A Gantt chart is a matrix, which lists on the vertical axis all the tasks to be performed. Each row contains a single task identification, which usually consists of a number and name. The horizontal axis is headed by columns indicating estimated task duration, skill level needed to perform the task and the name of the person assigned to the task, followed by one column for each period in the project’s duration. Each period may be expressed in hours, days, weeks, months and other time units. The graphics portion of the Gantt chart consists of a horizontal bar for each task connecting the period start and period ending columns. A set of markers is usually used to indicate estimated and actual start and end. Each bar on a separate line and the name of each person assigned to the task, is on a separate line. In many cases when this type of project plan is used, a blank row is left between tasks. When the project is under way, this row is used to indicate progress indicated by a second bar, which starts in the period column when the task is actually started and continues until the task is actually completed. Comparison between estimated start and end and actual start and end should indicate project status on a task-by-task basis.
6. Programme Evaluation AND Review Technique: Program evaluation and review technique (PERT) is a variation on Critical Path Analysis that takes a slightly more sceptical view of time estimates made for each project stage. Critical Path Method (CPM) charts are similar to PERT charts and are sometimes known as PERT/CPM. To use it, estimate the shortest possible time each activity will take, the most likely length of time and the longest time that might be taken if the activity takes longer than expected. PERT charts depict task, duration and dependency information. Each chart starts with an initiation node from which the first task or tasks, originates. If multiple tasks begin at the same time, they are all started from the node or branch, or fork out from the starting point. Each task is represented by a line, which states its name or other identifier, its duration, the number of people assigned to it and, in some cases, the initials of the personnel assigned. The other end of the task line is terminated by another node, which identifies the start of another task or the beginning of any slack time that is, waiting time between tasks. Each task is connected to its successor tasks in this manner, forming a network of nodes and connecting lines. The chart is complete when all final tasks come together at the completion node. When slack time exists between the end of one task and the start of another, the usual method is to draw a broken or dotted line between the end of the first task and the start of the next dependent task.
According to Mooney and Reiley, “Coordination is the orderly arrangement of group efforts to provide unity of action in the pursuit of a common purpose.”
According to Henry Fayol, “To coordinate, means to unite and correlate all activities”. According to McFarland, “Coordination is the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secures unity of action in the pursuit of common purpose.”
On the basis of the above stated definitions, we can state the following as the essential elements of coordination:
1. Coordination implies deliberate efforts to bring fulfilment of goal.
2. Coordination applies to the synchronised arrangement of the productivity of a group and not any individual.
3. Coordination is needed only when there is an involvement of a group over a task. It would not be required if an individual were to work in isolation.
4. Coordination is a continuous effort which begins with the very first action, the process of establishment of business and runs through until its closure.
5. Coordination is necessary for all managerial functions. In organising work, managers must see that no activity remains unassigned. In staffing, managers must ensure the availability of competent people to handle assigned duties. In directing organisational activities, managers must synchronise the efforts of subordinates and motivate them through adequate rewards.
6. In controlling organisational activities, managers must see that activities are on the right path, doing right things, at the right time and in the right manner. Thus, coordination transcends all managerial functions.
The need for coordination arises from the fact that literally all organisations are a complex aggregation of diverse systems, which need to work or be operated in concert to produce desired outcomes. In a large organisation, a large number of people process the work at various levels. These people may work at cross purposes if their efforts and activities are not properly coordinated. To simplify the picture, one could decompose an organisation into components such as management, employees, customers, suppliers and other stakeholders.
The components perform interdependent activities aimed at achieving certain goals. To perform these activities, the actors require various types of inputs or resources. It may be difficult to communicate the policies, orders and managerial actions on a face-to-face basis. Personal contact is, rather, impossible and formal methods of coordination become essential.
Usually, in an organisation, work is divided along functional lines, resulting in specialists taking care of manufacturing, financing, personnel, marketing functions. Over a period of time, these specialists tend to limit their ability to look beyond their own narrow speciality and become are more interested in developing their own departments. Coordination between such employees is must so as to let them mingle with the others in various departments.
People join an organisation to fulfil their personal needs, like those of food, shelter, clothing, entertainment, economic security, recognition for good work, freedom to do work independently, etc. Often individuals fail to appreciate how the achievement of organisational goals will satisfy their own goals. The environment in the organisation, organisational rules and regulations may also frustrate their attempts to realise their personal goals. As a result, they are forced to pursue their narrow personal interests sacrificing organisational interests. They tend to work at cross purposes. Coordination helps to avoid conflict between individual and organisational goals. According to Lawrence and Lorsch, the need for coordination, basically, arises owing to the differences in attitudes and different working styles of people in an organisation. Every individual has his own way of dealing with problems. The specific orientation towards particular goals might be different. To sales people, product variety may take precedence over product quality. Accountants may see cost control, as most important to the organisation’s success, while marketing managers may regard product design as most essential. Further, there are differences in time orientation of people.
Coordination is important to the success of any enterprise. It helps an organisation in the following ways:
1. Coordination pulls all the functions and activities together. Waste motions, overlapping and duplication of efforts, misuse of resources are, thus, prevented. Coordination, enables an organisation to use its resources in an optimum way. The resources flow through productive channels, paving the way for required quality and quantity of output. Efficiency is thus improved.
2. Coordination brings unity of action and direction. Members begin to work in an orderly manner, appreciating the work put in by others. They understand and adjust with each other by developing mutual trust, cooperation and understanding. They move closer to each other. In short, it improves human relations.
3. According to Fayol, where activities are well-coordinated, each department works in harmony with the rest. Production knows its target; maintenance keeps equipment and tools in good order; Finance procures necessary funds; Security sees to the protection of goods and service personnel and all these activities are carried out in a smooth and systematic manner. Coordination, thus, creates a harmonious balance between departments, persons and facilities. This in turn, helps in meeting goals efficiently and effectively.
4. The importance of coordination, largely lies in the fact that it is the key to other functions of management like planning, organising, staffing, directing and controlling. The different elements of a plan, the various parts of an organisation and phases of a controlling operation must all be coordinated. Coordinating makes planning more purposeful, organisation more well-knit, and control more regulative and effective.
Mary Parker Follet has brought forth various principles of coordination in the following fashion:
1. Principle of direct contact: In the first principle, Mary Parker Follet states that coordination can be achieved by direct contact among the responsible people concerned. She believes, that coordination can be easily obtained by direct interpersonal relationships and direct personal communications. Such personal contacts bring about agreement on methods, actions, and ultimate achievement of objectives. Direct contacts also help wither away the controversies and misunderstandings. It is based on the principle that coordination is better achieved through understanding, not by force, order and coercion.
2. Principle of continuity: The fourth principle, advocated by Follet, is that coordination is a continuous and never-ending process. It is something which must go on all the times in the organisation. Further, coordination is involved in every managerial function.
3. Principle of self-coordination: In addition to the four principles listed by Follet above, Brown has emphasised the principle of self-coordination. According to this principle, when a particular department affects other function or department, it is in turn, affected by the other department or function. This particular department may not be having control over the other departments. However, if other departments are modified in such a fashion, that it affects the particular department favourably, then self-coordination is said to be achieved. For instance, as we know, there must be coordination between the level of production and sales. When the production department alters its total production in such a way, so as to suit the sales capacity of the marketing department (even before the marketing department makes request to cut down production or to increase production), then self-coordination is said to have taken place. This, of course, requires effective communication across the departments. This principle is rarely practised in day-to-day life
4. Early stage: Coordination should start from the very beginning of planning process. At the time of policy formulation and objective setting, coordination can be sought from organisational participants. Obviously, when members are involved in goal-setting, coordination problem is ninety percent solved. It is because participative goal-setting enables agreement and commitment to organisational goals and there is no question of conflict and incongruency of goals of individuals and organisations. Coordination, if not initiated in the early stages of planning and policy formulation, becomes difficult to exercise in the later stages of execution of plans.
5. Reciprocal relationship: As the third principle, Mary Follet states, that all factors in a situation are reciprocally related. In other words, all the parts influence and are influenced by other parts. For example, when A works with B and he in turn, works with C and D, each of the four, find themselves influenced by others that is influenced by all the people in the total situation. Follet contends that this sort of reciprocal relation and this sort of interpenetration of every part by every other part, and again by every other part, as it has been permeated by all, should be the goal of all attempts at coordination.
Coordination cannot be achieved by force or imposed by authority. Achieving coordination through executive orders is a futile exercise. It can be achieved through person-to-person, side by-side relationships. Achieving effective coordination is a sequential process. It is possible only when the following conditions are fulfilled.
1. Clearly Defined and Understood Objectives: Every individual and each department must understand what is expected of them by the organisation. Top management must clearly state the objectives for the enterprise, as a whole. As pointed out by Terry, “there must be commonness of purpose, in order to unify efforts”. The various plans formulated in the enterprise must be interrelated and designed to fit together.
2. Proper division of work: The total work must be divided and assigned to individuals in a proper way. Here, it is worth noting the principle, ‘a place for everything and everything in its place’.
3. Good organisation structure: The various departments in the organisation must be grouped in such a way that work moves smoothly from one phase to another. Too much specialisation may complicate the coordination work.
4. Clear lines of authority: Authority must be delegated in a clear way. The individual must know, what is expected of him by his superior(s). Once authority is accepted, the subordinate must be made accountable for results, in his work area. There should be no room for overlapping of authority and wastage of effort(s).
5. Regular and timely communication: Personal contact is generally considered to be the most effective means of communication for achieving coordination. Other means of communication such as records, reports, may also be used in order to supply timely and accurate information to various groups in an organisation. As far as possible, common nomenclature may be used so that individuals communicate in the ‘same language’.
6. Sound leadership: According to McFarland, real coordination can be achieved only through effective leadership. Top management, to this end, must be able to provide (i) a conducive work environment, (ii) proper allocation of work, (iii) incentives for good work, etc. It must persuade subordinates, to have identity of interests and to adopt a common outlook.
On the basis of scope and flow in an organisation, coordination may be classified as internal and external; vertical and horizontal.
1. Internal and external coordination: Coordination between the different units of an organisation is called ‘internal coordination’. It involves synchronisation of the activities and efforts of individuals, in various departments, plants and offices of an organisation. The coordination between an organisation and its external environment, consisting of government, customers, investors, suppliers, competitors, etc., is known as ‘external coordination’. No organisation operates in isolation. In order to survive and succeed, it must set its house in order, and interact with outside forces in a friendly way.
2. Vertical and horizontal coordination: Coordination between different levels of an organisation is called ‘vertical coordination’. It is achieved by top management, through delegation of authority. When coordination is brought between various positions, at the same level in the organisation (i.e., between production, sales, finance, personnel, etc.) it is called ‘horizontal coordination’. Horizontal coordination is achieved through mutual consultations and cooperation. Task Enlist various types of coordination that you see around you in the organisation that you are currently related to.
The systems approach decomposes an organisation into three broad components of actors, goals and resources. The actors, comprising of entities such as management, employees, customers, suppliers and other stakeholders perform interdependent activities aimed at achieving certain goals. To perform these activities, the actors require various types of inputs or resources. As explained later in the paper the inputs may themselves be interdependent in the ways that they are acquired, created or used. The goals to which the actors aspire are also diverse in nature.
Some of them will be personal while others are corporate. Even where the goals are corporate, they address different sets of stakeholders and may be in conflict.
Multiple actors and interactions, resources and goals need to be coordinated if common desired outcomes are to be achieved. Viewed from the need to maintain perspective and solve problems that might arise from these multiplicities, coordination links hand in glove with the concept of systems thinking. Actors in organisations are faced with coordination problems. Coordination problems are a consequence of dependencies in the organisation that constrain the efficiency of task performance. Dependencies may be inherent in the structure of the organisation (for example, \departments of a university college interact with each other, constraining the changes that can be made to a single department without interfering with the efficient functioning of the other departments) or dependences may result from processes – task decomposition or allocation to actors and resources (for example, professors teaching complementary courses face constraints on the kind of changes they can make without interfering with the functioning of each other).
Organisations are systems in the sense that they comprise of elements that interact to produce a predetermined behaviour or output. Change in a constituent part of a system may constrain efficient functioning of other parts of the same system or alter required input or output specifications. Others, especially resources, may need to be used in combination to achieve desired changes. Looking at small parts of an interacting system involving multiple actors, resources and goals may accentuate a problem that analysis seeks to solve. Coordination, in a systems thinking approach fashion is called for. The solution to coordination problems, according to coordination theory, lies in the actors performing additional activities called coordination mechanisms. The theory maintains that dependences and mechanisms to counter them are general in the sense that they arise in one form or another in nearly every organisation. The theory this makes a recommendation that it is essential to identify and study dependences in a system and their related coordination mechanisms before decisions are made or action taken. Actors must also realize that there are several mechanisms to manage a dependency each of which may result in different processes.
The ideal one should be based on situational factors and often involves trade- offs. To summarize, an organisation considering change (or an organisation in the process of formation) ought to first identify inherent dependences and coordination problems likely to be faced and then choose from alternatives the coordination mechanism that best achieves the desired goals in the circumstances.
A key point here is that coordination mechanisms are variable parts of the organisation system and that choice of a specific mechanism has consequences for efficiency and goal achieement. A simplified typology of the kind of dependences that call for coordination in an organisation may be:
1. Task-task: Tasks may have overlapping, conflicting or outputs with the same characteristics; Common inputs for tasks may be shareable, reusable or non-reusable; the output of one task may be the input of other tasks or a prerequisite for performing subsequent tasks. There may be conflict in specifications that need coordination.
2. Task-resource i.e. resources required by a task.
3. Resource-resource: A situation in which one resource depends on another resource. Each of these dependences requires an appropriate coordination mechanism to manage it. In conclusion, solution to organisational problems, implementation of change or formation of a new organisation involves the management of numerous dependences among tasks, resources and goals. Dependences are best managed by coordination of the dependent parties. The choice of a specific coordination mechanism results in a unique organisational form and/or processes that have consequences for achievement of organisational goals. Coordination is a constituent application of systems thinking in the sense that it requires an organisation wide examination in how a change in one component of the organisation affects other components of the same system.
It is a system of identification and communication that signals the manager as to when and where his attention is needed. The main object of this system is to identify the specific problem take and action, and avoid or ignore or pay less attention to less critical problems which can be handled by his subordinates. Under this system the manager should receive the summarised report `about all the elements, and he should have all the exceptions to the past averages or standards pointed out, both the specially good and the specially bad exceptions. This gives him a full view of the progress in a few minutes of time. Thus by using the experience in a systematic way (i.e., having the knowledge of past attainments), a careful analysis is made with reference to existing records and standards of performances.
Management by Exception, shortly called as MBE is a management style or philosophy that empowers the manager to concentrate on the exceptionally important or critical matters and taking important decisions while facilitating the front line workers to complete the day to day activities. It aims at keeping the focus of the management on extremely important tasks and problems or areas in need of action.
The six fundamental components of Management By Exception are:
1. Measurement: Assignment of values to the past and present performances, so as to easily recognize an exception.
2. Projection: Forecasts that measurement which is relevant to the organizational objectives and extends the same, to future expectations.
3. Selection: Determines the parameters used by the management to pursue organizational objectives.
4. Observation: Measurement of existing performance so that the managers are having the knowledge of the existing state of affairs of the organization.
5. Comparison: Compare the actual and planned performance and indicating the exception which needs managerial action and reports the variances.
6. Decision Making: Prescription of the course of action which needs to be taken so as to ensure that the performance is back in control or to adjust expectations, which represents the changing conditions.
The steps involved in the process of Management by Exception (MBE), are listed as under:
1. Identifying and describing Key Result Areas (KRA).
2. Establishing standards and determining an acceptable level of deviations.
3. Making Comparison of actual result with that of the expected or the standard result.
4. Ascertaining variance.
5. Analysing the causes of such variance (deviation).
6. Strategizing and taking necessary actions wherever required and possible.
1. It helps to delegate the authority in better way.
2. It identifies the discrepancies and its causes timely.
3. It help in prompt decision making.
4. It ensure subtle flow of action.
5. It helps in optimum utilisation of organisational resources.
6. It helps to remove all the communication barriers
7. It help to identify the crisis easily
8. It ensures effective utilisation of managers time
In nutshell, in management by exception, the manager steps in, only when the employees fail to meet out their performance standards.
1. It saves the time of the manager as the manager focus is only on important task.
2. Its can go to detail in the problem as it has to focus on your part of the managerial problem.
3. Concentrated efforts are possible, as this system enables the manager to decide when and where he should pay his attention.
4. It identifies crisis and critical problems.
5. It avoids over management
6. It alerts management about opportunity and as well as threat.
7. There are qualitative and quantitative yardsticks to judge the performance.
1. It increases the paperwork of the manager.
2. This system only works when the condition is critical.
3. It require comprehensive observing and reporting
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