List the four major steps of a typical control system and describe ways in which each step can be performed.

Question

What will be an ideal response?

Answer 1

A typical control system has the four major steps of setting performance standards, measuring performance, comparing performance against the standards and determining deviations, and taking action to correct problems and reinforce successes. A standard is the targeted level of performance for a particular goal. Standards establish desired performance levels, motivate performance, and serve as benchmarks against which to assess actual performance. Standards can be set for any activity—financial activities, operating activities, legal compliance, charitable contributions, and social impact. The second step in the control process is to measure performance levels. Managers can count units produced, websites viewed, days absent, samples distributed, and dollars earned. Performance data commonly are obtained from three sources: written reports, oral reports, and personal observations. Armed with relevant data, the manager can evaluate the performance. Managers who perform the oversight must analyze and evaluate results carefully. The managerial principle of exception states that control is enhanced by concentrating on the exceptions to, or significant deviations from, the expected result or standard. In comparing performance with the standard, managers need to attend to the exception—for example, a few defective components produced on an assembly line, or the feedback from customers who are upset (or delighted) with a service. Applying this principle, only exceptional cases require attention and action. This principle is important in controlling. The manager is not concerned with performance that equals or closely (adequately) approximates the expected results. Managers can save time and effort by using the principle of exception. The last step in the control process is to take appropriate action on significant deviations. This step ensures that operations are adjusted to better achieve the planned results, or if the performance news is good, to keep achieving those exceptional results. When discovering significant variances, managers should take immediate and vigorous action.