Elements of a Good Control System

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What is a Control System?

A control system is the one which manages, commands also directs, or regulates the behaviour of other departments or systems in a company.

 

For continuously devised control systems, a feedback control system is used to automatically control all the processes in an organization.

 

Control System in an organization is very essential, before hitting to the main elements to be present in a good controlling system, first let us know what actually this control system in an organization means? Popularly known as MCS.

 

Management Control System (MCS)

This is a system which gathers and also uses the gathered information to evaluate the performance of different resources of the organization like human resources, physical and financial resources and also the organization as a whole in light of the laid strategies which are attempted to be achieved by the company. Management control systems influence the behaviour of the organizational resources to implement the set organizational strategies. Management control systems might be formal or even informal. 

 

Management control systems are tools to assist the management for an organization piloting toward its strategic objectives and it’s competitive advantage. Management controls are the only tool which managers use in implementing the desired strategies. However, the strategies get implemented with the help of management controls, organizational structure, human resources management and culture. 

 

According to Simons, Management Control Systems are the formal system, information-based routine work and procedures which managers use to maintain or to alter the patterns in an organizational activity. Anthony & Young showed that management control system in an image of a ‘black box’. Black box is used to describe an operation whose exact nature cannot be observed by a layman.

 

Elements of a Good Control System Overview

In every organization it is mandatory to have a good control system. An assured control system only comes with good elements present in it, the selective elements are as follows –

 

1. Planning  

Planning and control are closely connected to each other. Planning without controlling is meaningless and controlling without planning is acting blindly. Planning provides the base for control. Control brings focus to all bottlenecks related to work performance and this operates as a straight pin to the requirement of the situation. It is thus related to the planning function of the manager. Control is the result of all set plans, goals or policies. Thus, we see planning offers and affect control. Properly devised plans become important elements in bringing strong control.

 

2. Action  

Control suggests what actions can be taken to correct the deviation that might occur between the standards and the actual results. Definitely, it should assume the role of an emergency handler who comes into action right when it is the urgency. But deviations do occur in spite of the best guiding from the manager. In such a situation, the manager should be vigilant in his act. He should be quick not only in identifying the deviations, but also in rectifying them with the correct ones. Thus, control means the required and quick action to correct differences or actions which at least try to prevent such variations in future.

 

3. Delegation of Authority 

Delegation of authority only means to grant the authority or power to the subordinates to operate within the prescribed limits. Control means the authority to get the performance and detect it’s deviations and then to take the necessary corrective action. A manager cannot exercise control without the adequate authority. He also has a need to control the operations which are exercised by taking action which may be taken within the limits of his authority. The best policy of delegation is the matching of equitable responsibility and authority. It also suggests that a manager must have corresponding authority as compared to his own responsibility.


4. Information 

For an effective control system, there must be a prompt flow of information to the manager. Managers in the organisation must have adequate information about the performance, standards, and resources being contributed to the achievement of the organizational objectives. The system of communicating back to the manager is called a “feedback” system. An effective feedback system helps the manager to know where and when the deviation from any plan took place. This can then initiate a prompt corrective action. Promptness in reporting and information is vital for quick remedial action.

 

Thus, we see there are these elements which form an effective control system. Every organization must make sure about this system of control in order to control all the resources in the department.

FAQ (Frequently Asked Questions)

1. What are the Three Types of Internal Control?

Ans. Three main types of internal controls are: detective, preventative, and corrective. Controls are the policies and procedures or technical safeguards that are used to prevent problems and protect the assets of an organization.

2. What are Control Methods?

Ans. Methods of Control is those techniques or methods that are generally described as either quantitative or nonquantitative. The Quantitative Methods uses data and various other quantitative tools to monitor and to control the output produced.

3. What Does Control Mean in Management?

Ans. Controlling something is meant to monitor the thing. Also known as the “change management,” control management as referred in a management context is to set standards, measure the actual performance, and to take corrective action.