The control process in management of organization is reduced to the verification of organizational work, implementation of plans, etc. The control process helps to collect information about the use of funds and the state of the object reveals; to find the additional reserves and possibilities; make changes in programs and management organization. It also involves the analysis of financial results.
The purpose of the control function is the continuous detection of deviations of real results from the planned results.
Within an organization, the control process normally progresses through four steps:
Step 1: Establishing Performance Standards (Setting Objectives).
The first step includes the determination of organizational parameters of functioning and development that should be subsequently controlled, and sources of information about them. These parameters, in practice, take the form of various standards and regulations consistent with the objectives laid down in the organization tasks. It can be the norms of wastage of material resources per unit of production and the amount of work, norms of cash costs, performance indicators, program standards (deadlines or duration of any works, etc.).
The regulations should meet some requirements: scientific validity, flexibility (the ability to change in accordance with the new conditions), reliability and validity in a normal situation, an adequate reflection of real processes.
Following these requirements, the specifications can serve as criteria for evaluation of units and individuals (Alkhafaji., 2003).
Step 2: Observing and Measuring Actual Performance.
The second step includes the creation of the management model of the organization, which reflects the flow of resources, information, points of formation of intermediate and final results, as well as the most appropriate time to implement control actions – the so-called “control points”.
Step 3: Compare Measured Performance against Established Standards.
The third step includes an obtainment of information about the actual progress and comparing it with relevant regulations, which allows determining if there are deviations from the standards, if they are within acceptable limits and if there is the right time to implement corrective actions.
Measurements are the most difficult and costly elements of control. They require the bulk of costs, the value of which often determines the need of control, as the task of control is primarily aimed at finding ways to reduce costs, and not to increase them.
Information for monitoring purposes should be timely, accurate, should help in making informed decisions about how to act or inaction in situation. Sources of such information can include constant observations, accounting, public opinion surveys, final reports, special reviews and other.
Step 4: Take Corrective Action.
The fourth step of the control process consists in adjustment of the organization’s activities, modifying goals, reviewing plans, redistribution of tasks, improving production technology and management. However, changes should be accepted very cautiously. If things go well and goals are almost achieved, it is better not to make changes in the organization because certain deviations are not always interfere with the normal operation and do not impact outcomes much. Meanwhile, the fight against them is expensive, and if possible should be avoided immediately.
Adjustment system should be involved only in extraordinary cases.
There are two main variants of corrective actions. The first is to eliminate the “causes of rejection by their removal or neutralization”ť (Merchant., 2007). Second – the change of standards, which may be erroneous, since they are often based on projections that often quite differ from real situation.
In management the control function is just as important in the control system as planning or situational control. The control process in management is very important as it is meant for: ascertaining and evaluating the results of commercial activity and appropriate conclusions; assessment of people that contributed to the achievement of business performance and results; finding and assessment of the implementation and effectiveness of the activities contained in the plans of activities, and appropriate conclusions; formation of feedback for evaluation, promotion and awareness of staff (Drucker., 2007). However, the most important element is to control the results, since they determine the success of the organization.