Strategic Management: Formulation and Implementation

Characteristics Of Effective Control Systems

Effective control systems have certain characteristics. For a control system to be effective, it must be:

  1. Accurate. Information on performance must be accurate. Evaluating the accuracy of the information they receive is one of the most important control tasks that managers face.
  2. Timely. Information must be collected, routed, and evaluated quickly if action is to be taken in time to produce improvements.
  3. Objective and Comprehensible. The information in a control system should be understandable and be seen as objective by the individuals who use it. A difficult-to understand control system will cause unnecessary mistakes and confusion or frustration among employees.
  4. Focused on Strategic Control Points. The control system should be focused on those areas where deviations from the standards are most likely to take place or where deviations would lead to the greatest harm.
  5. Economically Realistic. The cost of implementing a control system should be less than, or at most equal to, the benefits derived from the control system.
  6. Organizational Realistic. The control system has to be compatible with organizational realities and all standards for performance must be realistic.
  7. Coordinated with the Organization's Work Flow. Control information needs to be coordinated with the flow of work through the organization for two reasons: (1) each step in the work process may affect the success or failure of the entire operation, (2) the control information must get to all the people who need to receive it.
  8. Flexible. Controls must have flexibility built into them so that the organizations can react quickly to overcome adverse changes or to take advantage of new opportunities.
  9. Prescriptive and Operational. Control systems ought to indicate, upon the detection of the deviation from standards, what corrective action should be taken.
  10. Accepted by Organization Members. For a control system to be accepted by organization members, the controls must be related to meaningful and accepted goals.

These characteristics can be applied to controls at all levels of the organization.