Organizational Control

Organizational Control is regulation of organizational activities, so that the performance remains according to the objectives.

Organizational Control has following role  in an organization:-

1. Provides an account of how the organization is performing in accordance with the set objectives

2. Are the different sub-systems and parts working according to their established roles?

3. Organizational control also keeps the organization in a direction

organizational control also serves following purposes 

1. Adapt to Environmental change:- If environment changes, a goal may be irrelevant, obsolete so control function helps to modify the goals itself, second thing is that it helps organization to keep up according to the goals , so control then direction in changing environmental

2.Limit the accumulation of the error: - Small errors may not be serious at the time but with the course of time , these errors may accumulate and become a serious problem.
for example:-

For example, Whistler Corporation, a large radar detector manufacturer, was once faced with such rapidly escalating demand that quality essentially became irrelevant. The defect rate rose from 4 percent to 9 percent to 15 percent and eventually reached 25 percent. One day, a manager realized that 100 of the firm’s 250 employees were spending all their time fixing defective units and that $2 million worth of inventory was awaiting repair 

3. Cope with Organizational complexity:-as the organization grows, it takes on various tasks, productions and it designs becomes complex.
To effectively manage such a complexity in product lines, designs and roles and effective control system is needed.

4.Minimize costs:- Resources are scarce and to be efficient it is necessary to minimize the costs. Organizational control helps in controlling the quality and quantity of resources and thus minimizing costs
of production.

Process of Control-

—  

1.Establish Standards

—  Control standard—a target against which subsequent performance will be compared.Control standards should be expressed in measurable terms.Control standards should be consistent with organizational goals.

Control standards should be identifiable indicators of performance

2.Measure Performance-—  Performance measurement is an ongoing process. Performance measures must be valid indicators (e.g., sales, costs, units produced) of performance.

3.Compare Performance Against Standards-—  Define what is a permissible deviation from the performance standard and—  Utilize the appropriate timetable for measurement.

4.Determine the Need for Corrective Action-   Maintain the status quo (do nothing) or,—  Correct the deviation to bring operations into compliance with the standard, or—  Change the standard if it was set too high or too low

Control System and forms of Organizational Control

Control System explained in this picture is composed of input , transformation and output subsystems. through feedback the corrective action is taken.

Different forms of Organizational control

Preliminary Control- This form of control focuses on controlling the quality and quantity of input resources- human, physical, informational and financial resources. If the quality and quantity of resources used will be good and appropriate, it will be better to ensure the performance according to standards. Preliminary control should be the part of an effective control system.

For example- If a school wants to become the best school, it should take good students through entrance test, good teachers through tough interviews and good educational materials because these are inputs. It will help to control the quality keep the performance according to the objectives.

Concurrent Control- This form of control means focusing on meeting the standards during the transformation process.
Dell computers are produced in assembly line fashion. After assembling each part it is checked that assembled parts are working properly. In this process it is clear that control is going simultaneously with production and assembling of computers.

Post-Action Control-   Checking the quality and quantity of the output or products after production or transformation process.

Organizational control should incorporate control at all type. Inputs should be controlled, transformation process should be controlled and also the feedback of product should be taken and quality should be improved. In Honda , all these control methods are followed.

ORGANIZING

Organizing is the process of identifying and grouping the work to be performed. Organizing is deciding how best to group organizational elements.

Organizing can also be defined as a process of creating a system of authority relationships and task responsibilities.

The process of organizing (creating the organizational structure)  involves following steps:-

1.  Identifying the work:

Organizations perform complex tasks that are beyond the scope of one man capacity to execute and supervise. It becomes necessary to identify the several works, jobs, tasks that are necessary in order to achieve the organizational goals. It helps in concentrating on important activities, avoiding unnecessary duplication, overlapping and wastage of efforts.

Job specialization,

2. Grouping the work:

 in the process of identifying work, numerous of activities are analyzed and found that some are closely related to each other and needed to put together in order to get the work done smoothly. Also some activities are separate in nature and needed to put separately to be done efficiently.

Similar activities are put together in forms of groups/departments. The basis of grouping may be according to some convenience or goal accomplishing ability of the grouping.

3. Establishing reporting relationships between jobs :

After grouping the tasks it is necessary to create relationship among these tasks, because there is an interrelation and complementary relationship of these tasks to achieve the organizational goal. So formal relationship between these tasks is established

4. Delegating authority and responsibility:

Once the different tasks have been identified, someone should be given the responsibility to perform them and also someone to supervise the same. In this stage, managers are authorized to get the work done in their departments/groups. They delegate the various tasks to their subordinates and supervise the same.

5. Coordinating activities among jobs:

After different units/departments are created, the interdependence between these all are established. Departments can coordinate with each other in three manners

Pooled interdependence represents the lowest level of interdependence. Units with pooled interdependence operate with little interaction—the output of the units is pooled at the organizational level.

In sequential interdependence, the output of one unit becomes the input for another in a sequential fashion. This creates a moderate level of interdependence. At Nissan, for example, one plant assembles engines and then ships them to a final assembly site at another plant, where the cars are completed.

Reciprocal interdependence exists when activities flow both ways between units. This form is clearly the most complex

6. Differentiating amongst positions: last step is creating difference between line and staff positions. Line positions (or managers) are directly  responsible for fulfillment of goals, staff positions are in supporting and advising  role.

Span of control

Span of control is number of people who directly report to a manager. In other words it is the  number of people, subordinates who are directly supervised, controlled, instructed and guided by a superior manager.

Span of control is directly related to the closeness of supervision. Narrow span of control , close supervision and wide span of control means lose supervision.

Span of control is directly related to the number of levels in an organization. Narrower the span of control, taller the organization and wider the span of control- flatter the organization.

Factors affecting span of control-

1.       Nature of organization

2.       Nature of work

3.       Complexity of work

4.       If the task requires machine paced, well learned or easily monitored behavior , then the span of control is wider

5.       The ability and personal quality of manager including the capacity to cope with interruption.

6.       Ability and training of staff

7.       The amount of time manager has available from other activities to spend with subordinates.

8.       Effectiveness of communications and control systems.

9.       The physical location or spread of subordinates

Little discussion on span of control:

If the span of control is too wide, it is difficult to a manager to supervise their subordinates, and manager will be stressed. Wide span of control means larger groups of subordinates so there will be possibility of informal grouping , cliques, and informal leaders in these groups that may operate contrary to the policy and plans.

Too narrow span of control results in tall organizations. Also this type of organizing is more expensive because no of managers is increased. There also becomes problem in communication flow because information must pass various layers.

The Delegation Process

Delegation is the establishment of a pattern of authority between a superior and one or more subordinates. Specifically, delegation is the process by which managers assign a portion of their total workload to others.

Reasons for Delegation The primary reason for delegation is to enable the manager to get more work done. Subordinates help ease the manager’s burden by doing major portions of the organization’s work. In some instances, a subordinate may have more expertise in addressing a particular problem than the manager does. For example, the subordinate may have had special training in developing information systems or may be more familiar with a particular product line or geographic area. Delegation also helps develop subordinates. By participating in decision making and problem solving, subordinates learn about overall operations and improve their managerial skills.

Creating accountability

Giving authority

Assigning responsibility

Steps in delegation

Delegation process involves three steps. First, the manager assigns responsibility or gives the subordinate a job to do. The assignment of responsibility might range from telling a subordinate to prepare a report to placing the person in charge of a task force. Along with the assignment, the individual is also given the authority to do the job. The manager may give the subordinate the power to requisition needed information from confidential files or to direct a group of other workers. Finally, the manager establishes the subordinate’s accountability—that is, the subordinate accepts an obligation to carry out the task assigned by the manager. For instance, the CEO of AutoZone will sign off for the company on financial performance only when the individual manager responsible for each unit has certified his or her own results as being accurate. The firm believes that this high level of accountability will help it avoid the kind of accounting scandal that has hit many businesses in recent times

Problems in delegation

Unfortunately, problems often arise in the delegation process. For example, a manager may be reluctant to delegate. Some managers are so disorganized that they are unable to plan work in advance and, as a result, cannot delegate appropriately. Similarly, some managers may worry that subordinates will do too well and pose a threat to their own advancement. And, finally, managers may not trust the subordinate to do the job well. Similarly, some subordinates are reluctant to accept delegation. They may be afraid that failure will result in a reprimand. They may also perceive that there are no rewards for accepting additional responsibility. Or they may simply prefer to avoid risk and therefore want their boss to take all responsibility.

Departmentalization

  The process of grouping jobs according to some logical arrangement, like function(activity), product, customers, location etc.

Logic for departmentalization:

When organisations are small owner can supervise and guide all the employees, but as the organization grows it becomes difficult for owner manager to supervise personally. As a result new managerial positions are created to supervise the work of employees. Employees are not assigned to managers randomly, jobs are grouped according to some logic, plan and people are assigned the work and managers are authorised to supervise them.

So the logic for departmentalization is it helps in coordination and better supervision.

Types of departmentalization –

1. functional 2. Product 3. Customer 4. Geographical

Functional departmentalization:- is grouping of jobs according to similarity of activities. This requires similar set of skills to perform these activities

In order to produce some good or service there are four essential functions that the organisation must perform.

1. The good or service must be developed (research and development activity – R&D department)

2. Something of value must be created. (Production activities)

3. The product and service must be sale and marketed. They must be made available to those who are to use them (Marketing activity)

4. Finance is needed in order to make available resources used in the development, creation, and distribution of the products (financing activity)

Benefits of functional structure:

-          Best use of expert staff

-          Supervision is facilitated in that managers only need to be familiar with a narrow set of skills

-          Coordination inside each department is easy

-          Shared use of expertise

Disadvantages of functional departmentaion :

-          Coordination between departments becomes difficult

-          Slow and bureaucratic decision making

-          Competition between departments for resources

-          Narrow focus to departmental goals and lose sight to organisational goals

-          Accountability and performance difficult to monitor

-          Departments develop their homogeneous work culture

Example of functional departmentalization :-

Britannia Industries, Bata India, Maruti Udyog, MOdi Xerox follow this departmentalization

2. Product departmentalization:

Grouping of activities /roles/jobs around different products. If a company is offering different products it may group the jobs according to these products.

Different specialists come together into separate product departments with collective responsibility for producing a product. Here in each product department , specialists of production, finance, marketing , H.R take joint responsibility . These product departments or organisational units are autonomous from each other,

This form of grouping is used in diversified organizations. In india Hindustan Uniliver, ITC Larsen&Toubro, Siemens, Thremax have been using this model successfully.

Advantage of this departmentalization:

-          All activites related to one product can be integrated and coordinated

-          Speed and effectiveness of decision making is enhanced

-          Performance of individual products can be assessed easily

Disadvantages of this departmentalisation –

-          Managers may focus on their product to the exclusion of the rest of organisation

-          Administration cost may increase due to each department having functional are experts

-          Divisions may become too autonomous

Pic : product departmentalisation

Customer departmentalisation

Grouping of jobs according to respond to and interact with specific customer groups/segments.

Advantage : skilled specialists can deal with unique or customers or customer groups

Disadvantage: Large administrative staffs is needed to integrate activities of various departments.