Controlling Factor of Management Essay Example | Topics and Well Written Essays - 1500 words

Controlling Factor of Management - Essay Example These factors include the need for accountability in organizations, the need to detect environmental changes that significantly affect organizations, the growing complexity of present day organizations and the need to identify operational errors in organizations to avoid incurring excessive costs. In addition to addressing the above mentioned factors, controlling plays an important role in helping managers detect irregularities, identify opportunities, handle complex situations, decentralize authority, minimize costs, and cope with uncertainty. Coping with Uncertainty - In today's turbulent business environment, all organizations must cope with change. When organization goals are established, they are based on the knowledge available at that point of time. However, by the time the goals are accomplished, many changes may have occurred in the organization or its environment. An improperly designed control system, however, may result in poor organizational performance. Detecting Irregularities - Control system help managers detect undesirable irregularities, such as product defects, cost overruns, or rising personnel turnover. Although small mistakes and errors may not seriously damage the financial health of an organization, they may accumulate and become very serious over time. Early detection of such irregularities can prevent minor problems from mushrooming into major ones and often save a great deal of time is money for the organization. Example: A large radar detector manufacturer in the US named Whistler Corporation once faced with such rapidly escalating demand that it stopped giving attention to quality. This led to a rise in the defect rate from 4% to 9% to 15 % and finally, to 25%. A manager observed that 100 out of 250 employees of the company were spending all their time fixing defective units and that an inventory worth $2 million was still awaiting repair. Had the company detected the defects and rectified them early, the problem would never have increased to such proportions. Problems such as missing important deadlines or selling faulty merchandise to customers are sometimes difficult to rectify. Identifying aberrations in the early stages helps organizations avoid such problems. Identifying Opportunities - Control also helps managers identify areas in which things are going better than expected, thereby alerting management to possible future opportunities. For example, division managers at the St. Louis-based May Department stores prepare and generate monthly reports that specify the items that have high demand and the amount of money those items are generating. On the basis of these reports, the chain develops successful merchandising strategies for all its stores like what to buy, which vendors to buy from, and how to display the merchandise etc. Handling Complex Situations - Another important factor contributing to the need for a control mechanism is that growing complexity of today's organizations. When a company requires only on kind of raw material, produces only one kind of product has a simple organization design, and enjoys constant demand for its products, it can afford to have a very basic and simple system of control. But, as organizations grow or engage in producing many products from a number of different raw materials, and operate in a large market area with many competitors, efficient and