Organizations often have three levels of controls: 1. Strategic controls 2. Tactical controls 3. Operation controls
1. Strategic Controls –
This involves monitoring critical environmental factors that could affect the viability of strategic plans, assessing the effects of organizational strategic actions, and ensuring that strategic plans are implemented as intended.
Control at this level is the domain of top-level management, who generally take an organization wide perspective. For strategic controls managers often concentrate on relatively long time frames, such as quarterly, semiannual, and annual reporting cycles. If environments are somewhat unstable and or competition is especially keen, managers may use shorter reporting cycles for strategic control. They also make use of tactical and operational plans to ensure their implementation as intended at the middle and lower levels.
2. Tactical Control –
Tactical control focuses on assessing the implementation of tactical pans at department levels, monitoring associated periodic results, and taking corrective action as necessary. Control at the tactical level involves mainly middle managers, who are concerned with departmental- level objectives, programs, and budget and who concentrate on periodic or middle term frames and often use weekly or monthly reporting cycles. They also test how the environment reacts to the tactical initiatives of their departments. Although their main concern is with tactical control, middle mangers are likely to engage in strategic control in the sense of providing information to upper level managers for strategic issues. They are also involved in operational control, at least to the extent of checking on some of the more critical aspects of operating plan implementation.
3. Operational Control –
Tactical control focuses on assessing the implementation of tactical pans at department levels, monitoring associated periodic results, and taking corrective action as necessary. Control at the tactical level involves mainly middle managers, who are concerned with departmental- level objectives, programs, and budget and who concentrate on periodic or middle term frames and often use weekly or monthly reporting cycles. They also test how the environment reacts to the tactical initiatives of their departments.
They monitor schedules, budgets, rules and specific outputs normally associated with individuals.
Controls at this level focuses on daily sales production, daily staff turnover or absenteeism.
Although their main concern is with tactical control, middle mangers are likely to engage in strategic control in the sense of providing information to upper level managers for strategic issues. They are also involved in operational control, at least to the extent of checking on some of the more critical aspects of operating plan implementation
The levels of control
Strategic, tactical and operational- are strongly interrelated in much the same way that planning systems at different levels are integrated. For example if an organization decides that quality will be an important part of its strategy, then quality becomes an important area of control not only at the strategic level but also at the tactical and operational levels. Thus for controls to be effective, it is important that they operate in concert.
The Control Process (Steps)
The controlling process has seven major steps:
1. Determine areas to control-Production
Managers must first decide which major areas will be controlled.
It is not possible and it is expensive to control everything in the organization. Managers normally base their control interest on the organization goals and objectives developed at the planning stage.
2. Establishing performance standardsPlan-100 Units
In controlling, standards are essential because they spell out specific criteria for evaluating performance and related employee behaviors.
Often standards are incorporated into the goals at the planning stage and only need to be reiterated. Standards serve 3 purposes.
(i) They enable an employee to know what is expected of them.
(ii) Standards provide a basis for detecting job difficulties related to personal limitations might be due to lack of training experience or personal problems.
Such limitations can be based on lack of ability, training or experience or on any other job- related deficiency that prevents an individual from performing properly on the job. Timely identification of deficiencies makes it possible to take corrective action before the difficulties become serious ad possibly irresolvable
(iii) Standards help reduce potential negative effects of goal incongruence.
Goal incongruence is a condition in which there are major incompatibilities between the goals of an organization members and those of the organization. Such incompatibilities can occur for a number of reasons, such as lack of support for organizational objectives (e.g. viewing a job as temporary and attempting to do minimum), and often result in behaviors that are incompatible with reaching organizational goals. One common manifestation of goal incongruence is employee theft, which includes wasting organizations resources, as well as taking equipment, materials and money.
Other considerations include:
They should be set at a reasonable level – to too high not too low
They should be kept at a reasonable number
The process of setting should involve subordinates
Identify strategic points or controlling points
Conditions people to want even higher standards.
3. Measure performance 80 Units
Once standards are determined, the next step is measuring performance. For a given standard, managers must decide on how to measure actual performance and often do so. One of the more popular techniques used to help get standards and coordinate the measurement performance is management by objectives.
The means of measuring performance will depend on set standards, but they can include such data as units produced, amount of service rendered, amount of materials used, number of defects found, scrap rate, steps or processes followed, profits, return on investments, quality of output, or stores opened.
Although quantitative measures are often used whenever possible, many important aspects of performance can be difficult to measure quantitatively. Once they have selected the means of measurement, managers must decide how often they will measure performance for control purposes. In some cases managers need control data on a daily, hourly, or even more frequent basis. In other cases weekly, monthly, quarterly, semiannual, or even annual data may be sufficient.
Other considerations include:
Be as accurate as possible
Be prompt to avoid delays in taking corrective action
Be systematic especially in the collection and disseminating of data
4. Compare performance against standards 100-80=20
This step consists of comparing the actual the actual performance measured in step 3 with the standard established in step 2. Managers often base their comparison on information provided in reports that summarize planned versus actual results. Such reports may be presented verbally, written form, or generated automatically in conjunction with computerized processes.
The proliferation of computers tied into networks has made it possible for managers to obtain up to the minute status reports on a variety of quantitative performance measures.
Such computer systems lend themselves particularly well to applications of management by exception, a control principle which suggests that managers should be informed of a situation only if control data show significant deviations from standards. The use of the management by exception principle can often be used effectively, managers need to be careful that they do not become so pre-occupied with problems and they ignore positive accomplishments of subordinates.
Managers often make comparisons of performance standards by walking around work areas and observing conditions, a practice often referred to as management by wondering around.
5. Recognise positive performance
When performance meets or exceeds the set standards, usually no corrective action is necessary. The type of recognition given can vary from verbal “well done” for routine achievement to more substantial rewards, such as bonuses, training opportunities, or pay rises, for major achievements or consistently good work. These approaches are consistent with motivation theories, such as the expectancy of rewarding good performance in order to sustain it an encourage further improvements.
6. Take corrective action as necessary
When standards are not met, mangers must carefully assess the reasons as to why and take corrective action. As part of their evaluation, managers often personally check the standard is not desirable because the standards are, in fact, inappropriate – usually because of changing conditions. More often, through, corrective actions are needed to reach standards.
Look out for the root causes
Be prompt in taking corrective action
Build corrective action into standing plans where possible
Consider environmental constraints e.g. anticipate competitor’s reactions.
7. Adjust standards and measure as necessary
Control is a dynamic process. As a result managers need to check standards periodically to ensure that the standards and the associated performance measures are still relevant for the future.
One, standards and measures can be inappropriate, either because they were not set appropriately to begin with or because circumstances have changed.
Secondly, exceeding a standard may signal unforeseen opportunities, the potential to raise standards, and /or the need for possible major adjustments in organizational plans.
Finally, even if standard have been met, changing conditions, such as improvements in skill levels of employees, may take it possible to raise standards for future efforts. Conversely, a manager may feel that achieving a particular standard consumes to many resources and may decide to lower that standard. Thus managers use control processes to keep track of various activities, but they must also be prepared to review the process itself as necessary to be sure that it meets current need