Control System: Elements of Control, Objective, Strategic, Economic (2024)

Elements of a good Control System

Every decent control system must possess certain basic elements. Since they all play a major role, the absence of any one of them can make the whole system weak. Hence, managers must ensure that their control systems contain the following basic elements and considerations.

1) Feedback

Feedback is the backbone of all control systems. This feedback is nothing but the information that managers use to correct their organization’s actual performance.

The aim of feedback is basically to adjust future actions using previous experiences. Managers use the information they receive from feedbacks to implement corrective measures. Such measures generally help in bridging the gap between the actual performance of the organization and its goals.

Feedback may be either formal or informal. Formal feedback consists of sources like financial statements, statistics, reports, other written communication, etc. On the other hand, informal feedback includes personal opinions, informal discussions and an individual’s observations.

2) Control must be objective

The second essential requirement of a good control system is that it must always be objective. A subjective criterion should never be the basis of evaluating actual performances.

For example, evaluation of an employee’s performance should comprise of standards like working hours, productivity, efficiency, etc. Managers should not evaluate employees using subjective prejudices.

3) Prompt reporting of deviations

This element of the controlling system basically requires quick reporting of deviations and discrepancies. If some work is not going according to plans, relevant managers must take notice of this immediately. This is because any delay in reporting problems and taking corrective measures can lead to financial losses for a business.

4) Control should be forward-looking

Control systems can often suffer from the defect of delays in reporting of deviations and taking of corrective measures. As we saw above, this problem can lead to financial losses for a business.

Hence, managers must ensure that their control systems are forward-looking. This will help in predicting deviations in advance as well as giving adequate time for course correction.

5) Flexible controls

A rigid control system can often make it ineffective in extraordinary and unpredictable situations. It should, thus, be flexible and open to changes. Managers must be able to adapt their control measures as per the requirements of every possible scenario.

6) Hierarchical suitability

Almost all business organizations possess management hierarchies comprising of managers at various positions and levels. Since each manager performs controlling functions at his level, the system itself must suit his organization’s hierarchy. Every manager must have adequate powers for this purpose and the flow of information for evaluation should be effective.

(source – Utah ATV)

7) Economical control

Every good controlling system has to be economical when it comes to its implementation and maintenance. In other words, its benefits should outweigh its costs. An organization must be able to afford it and also derive all possible advantages from it.

8) Strategic control points

Not all deviations require the same level of attention and importance. For example, if an infrastructure company loses one government tender for constructing roads, it can work on other projects.

However, if the government blacklists it altogether due to its financial irregularities, this can be a huge issue.

A good control system must be able to deal with every deviation as per its seriousness. No organization can afford to accord equal importance to each and every problem. This is basically the whole aim of strategic control points.

9) Control must be simple to understand

Sophisticated policies can often make elements of control systems difficult to understand and implement. A good system, however, is always simple to comprehend and work on.

Thus, before launching controlling measures, managers should first check whether their employees will be able to understand them. They should also try to resolve any ambiguities and confusion that may arise later.

10) Control should focus on workers

Good control systems always focus on workers instead of the work itself. Since it is workers who implement these systems, everybody should be able to work with them effectively.

Solved examples for you

Question: Name the missing word in the following sentences.

(1) __________ helps managers collect information for taking corrective action.

(2) __________ feedback includes personal opinions and informal discussions.

(3) Control systems should focus on __________ and not the work itself.

(4) Since managers at all levels perform controlling, its systems should suit every organization’s __________.

Answers: (1) feedback (2) informal (3) workers (4) hierarchy