To be effective and to serve its purpose, the system of control must satisfy certain requirements. These may be regarded as the prerequisites of effective control. The requirements of an effective control system may be enumerated in brief as under:
1) Definition of objectives: Before planning a control system, it is essential to clearly define the objectives of the organisation. The control system must be directed towards the potential or actual deviations from plans early enough to permit corrective action.
2) Efficiency of control techniques: Control techniques are said to be efficient when they detect deviations from plans and make possible corrective action at an early stage with the minimum of unsought consequences.
3) Responsibility of control: The primary responsibility for the exercise of control should rest with the manager charged with the implementation of plans.
4) Direct control: Any control system should be designed to maintain direct contact between the controller and the controlled.
5) Organisation suitability: Controls should be tailored to fit the organisation. The flow of information concerning current performance should correspond with the organisational structure. If superior is to control overall operations, he must find a pattern that will provide control for individual parts.
6) Flexibility: A good control system must keep-pace with the continuously changing pattern of a dynamic business world. It-must be responsive to changing conditions. It should be adaptable to new developments including the failure of the control system itself. Plans may call for an automatic system to be backed up by a human system that would operate in an emergency; likewise, an automatic system may back up a human system.
7) Self-control: Units may be planned to control themselves. If a department can have its own goals and control system, much of the detailed controls can be handled within the department. These sub-systems of self-control can then be tied together by the overall control system.
8) Strategic point control:Effective and efficient control can be achieved if critical key or limiting points can be identified and close attention can be directed to adjustment at those point. This is known as ‘Control by exception’. It is called control by exception because according to this principle only significant deviations from standard, whether positive or negative, require management’s attention as they constitute exceptions. An attempt to go through all deviations tends to increase unnecessary efforts and to decrease attention on important problems.
9) Corrective action: Merely pointing out deviations is not sufficient in a control system. It must lead to timely corrective action to be taken to check deviations from standards through appropriate planning, organising and directing.
10) Forward-looking control: The control system should be directed towards future. It should report the deviations from the plans quickly in order to safeguard the future. If the control reports do not relate to the future, then the reports are of no use as they will not be able to suggest the type of measure to be taken to rectify the past deviations.
11) Human factor: A good system of control should be worker centred rather than work centred as the control is exercised on the workers who do the work. It must find the persons accountable for results whenever large deviations take place and they must be directed accordingly. So the human factor must be given proper attention while controlling. A ‘technically fit’ well-designed control system may fail because the human beings may react unfavourably to the system.
12) Economical: The system of control must be worth its cost. The controls must justify the expenses involved. A control system is justifiable if the savings anticipated from it exceed the expected costs in its working. Small-scale production units cannot afford elaborate and expensive control system.
13) Objective standards: As far as possible, standards should be objective, that is based on factual information. If they are subjective, a manager’s or subordinate’s personality may influence judgement of performance inaccurately. Effective control requires objective, accurate and suitable standards. Objective standards may be quantitative or qualitative. However, in either case, the standard should be factually determinable and verifiable. Although we have explained how the ‘Control Function’ can be effective with various requirements as mentioned above, even then there are some limitations of control. Let us now examine the limiting factors.
