Chapter 7 – Management Theory Basics: Controlling

Management Theory Basics: Controlling

The Evaluation Framework

Controlling completes the management cycle by focusing on evaluation – determining whether planning, organizing, and directing functions have achieved intended results. Without appropriate measurement tools, managers cannot identify problems or areas for improvement across functional domains. Objective metrics such as production counts, quality statistics, and labor costs provide essential evaluation data.

Effective controlling requires high-quality, timely information meeting three fundamental criteria:

1. Relevance: Data must possess predictive value, demonstrate stability over time and consistent availability. Production flaw analysis exemplifies this requirement by providing consistent, meaningful information throughout manufacturing processes.
2. Reliability: Information must be verifiable, valid, and neutral. Biased or manipulated data inevitably leads to incorrect analysis and misguided decisions.
3. Comparability/Consistency: Metrics should be obtainable across organizational units, enabling meaningful comparison between otherwise unrelated areas.

These information properties depend on measurement against established standards or limits—ideally determined during the planning phase when management defines success parameters and establishes benchmarks for performance evaluation.

Standards and Quality Control

Control cannot function without standards. Standard development and analysis form core control processes, as exemplified by quality control systems without which products might prove worthless or even dangerous. Through standards application and employee evaluation, managers determine organizational effectiveness, objective achievement levels, and improvement opportunities.

Henri Fayol recognized in 1916 that control involves verifying organizational activities conform with adopted plans and goals. He emphasized that control systems should identify functional weaknesses to prevent recurrence rather than merely punishing poor performance. Fayol advocated continuous control applied across all organizational levels, oriented toward future improvement rather than past punishment.

Management Control Systems

Technology has profoundly impacted the control function, enabling sophisticated Management Control Systems (MCS). An effective MCS ensures that:

• Data accurately measures accomplishments
• Costs properly relate to schedules and technical achievements
• Information remains valid, timely, and auditable
• Data supports progress evaluation and timely action

These systems must provide management with valid information for decision-making. For example, budgets guide organizations toward financial goals. Timely, accurate financial information helps determine budget adherence. When targets aren’t met, properly designed control systems identify causes, enabling management to realign spending or adjust future budgets to ensure resources target appropriate activities.

Control System Framework

Most control systems share a framework comprising four variables:

1. Controlled Condition: The specific measurement subject – products per time period, employee work hours, quality control errors, or other metrics critical to organizational goal achievement.
2. Sensor Mechanism: Methodology for identifying deviations from optimal results. Budgets utilizing recent accounting figures exemplify sensors, as do thermostats that measure environmental conditions and trigger system responses when thresholds are reached.
3. Comparator: System for determining corrective action needs by comparing allowed conditions against sensor readings. Comparator tolerance varies by context – some systems permit 1-2% variation while others demand absolute precision where even 0.01% error could prove catastrophic.
4. Activator: Response actions correcting deviations from planned results. Activations range from employee reassignment to workflow reconfiguration. Finding effective solutions often requires experimental approaches rather than formulaic responses.

Historical Evolution of Control

The control function’s formal identification marked a significant management theory transition. During the industrial revolution, control primarily addressed machine efficiency and equipment-derived value. In the information age, focus has shifted toward human-machine and human-human interactions as manufacturing and service methods have improved.

Biblical Control Examples

In biblical contexts, control functions translated rapidly into action – success or failure often meant life or death. When people deviated from appropriate behaviors, control mechanisms enabled leaders to quickly implement corrections. While divine authority determined measurement variables and methods, definite control functions existed, requiring corrective actions when desired results weren’t achieved.

Multiple biblical examples demonstrate this control process. When people acted contrary to divine directives – whether worshipping the Golden Calf, responding inappropriately to reconnaissance reports, or rebelling against Moses’ authority – they failed to meet expectations. These failures triggered potential consequences, averted only through Moses’ intercession to prevent complete destruction similar to Sodom and Gomorrah’s fate.

Deliverables

Managers often find controlling less appealing than planning, organizing, or directing. While rarely in the spotlight, controlling potentially offers the greatest opportunity for managerial impact. Identifying appropriate metrics, measuring performance against standards, and implementing necessary corrections distinguish exceptional organizations from mediocre ones. Without effective control, organizations repeat mistakes without progress. Managers who identify errors early and implement preventive measures become organizational heroes by ensuring continuous improvement.

Control effectiveness enables organizations to:

1. Establish Meaningful Measurements: Develop metrics that accurately reflect organizational priorities and objectives, focusing attention on critical success factors.
2. Provide Early Warning Systems: Identify problems when they remain small and manageable rather than after they’ve grown into crises.
3. Enable Continuous Improvement: Create feedback mechanisms that support ongoing refinement of processes, procedures, and outcomes.
4. Ensure Resource Optimization: Verify that organizational resources – human, financial, and material – achieve maximum effectiveness and efficiency.
5. Maintain Strategic Alignment: Confirm that organizational activities remain consistent with strategic priorities, adjusting tactical actions when necessary to support strategic objectives.

Discussion Questions

1. Do you feel you have appropriate measurement tools in your life and what are they?
2. Do you have appropriate measurement tools for your job?
3. What additional measurement tools would you like to have to do your job better?
4. Do you think the Israelites could measure whether they achieved the Lord’s directives? If so, how?