Type of Control & Critical Standard

Principle & Practice of Management

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Type of Control & Critical Standard

Types of Control

Three types of control are distinguished according to when control is exerted.
The first of these is feed forward or steering control. In this type of control, the emphasis is in a future time frame. With accurate forecasting of what will happen, we can take action before a total operation is complete to ensure its success. Thus, for example, adjustments were made during the mission to the moon to help land the astronauts on the moon. Sometimes these controls, which modern developments such as real-time computers have made possible, are called process controls.
The second kind of control has been called the timed control. With this kind of control, work is stopped at various predetermined times or when certain events take place and cannot continue without a screening decision to go ahead. Examples of such controls include spending limits on projects and quality controls at various points in the operation process.
The final type of control is post action control with this type of control, when the operation is completed the results are reviewed. Although nothing can be done about the cycle that was completed the review serves as a guide to ways for preventing future mishaps.

Types of Critical Standards

In practice, every board planning objective, every goal of the many planning programs, every policy, every activity of these programs and every procedure becomes standard against which actual or expected performance might be measured.
Following are the main critical standards generally used in practice:
1. Physical standards: These deals with non-monetary measurements and are common at the operating level which materials are used, labor employed, services rendered and goods produced. They may reflect qualitative performance, such as man hours per unit of output, funds or fuel per horsepower produced, ton-miles of freight traffic carried, unit of production per machine hour quantity such as the hardness of bearings, closeness, rate of climb of an airplane, durability of barbaric or fastness of a color. As Goetz has said these standards are the ‘building blocks of planning’. Since whether management must choose between alternate policies, organizational configuration procedure or resources, it must always analyze the rival program in terms of physical elements determine the financial implications of these elements, integrates or synthesize the elements into programs and select the best program it can devise. As physical standards, are the building blocks of planning, they are also fundamental standards for control. [ Critical Standards ]
2. Cost standards: These deal with the monetary measurement and like physical standards, are common at the operating level they attach monetary values to the costs of the operation. Illustrative of cost standards are such widely used measures as direct and indirect cost per unit produced, labour cost per unit produced, labour cost per unit or per hour,
material cost per unit, machine hour costs, costs per plane reservation selling costs per dollar or unit of sales and costs per foot of well drilled. [ Critical Standards ]
3. Capital standards: These are a variety of cost standards, arising from the application of monetary measurements to physical items. But they have to do with the capital invested in the firm rather than with the income statement, perhaps the most widely used standard for new investment. The typical balance sheet will disclose other capital standards, such
as ratios of current assets of a current liability, debt to net worth, fixed investment to total investment, cash and receivables to payables, notes or bonds to stock and the size and turnover of inventories. [ Critical Standards ]
4. Revenue standards: These arise from attaching monetary values to sales. They may vary from such standards as revenue per bus passenger mile and dollars per ton of steel shapes sold to cover sale per customer, rules per capital in a given market area. [ Critical Standards ]
5. Programme standards: A manager may be assigned to install a variable budget programme, a programme for formally following the development of new products, or a programme for improving the quality of a sales force, while, some subjective judgement may have to be applied in appraising programme performance, timing and other factors can be used as objective standards. [ Critical Standards ]
6. Intangible standards: More difficult to set are standards not expressed in either physical or monetary measurement. What standard can a manager use for determining the competence of the divisional purchasing agent or Personnel Director, what can be used for determining whether the public relations program is successful? Are foremen loyal to
the company’s objectives? Is the office boy alert? Such questions show how difficult it is to establish standards for a goal that cannot be given clear quantitative or qualitative measurement. [ critical standards ]
Many intangible standards exist in business because research into what constitutes desired performance has not been done above the level of the shop, the district sales office, the shopping room, or the accounting department. Perhaps a more important reason is that human relationships, count in performance, as they do above the basic operating levels, it is very hard to measure what is good.
‘Effective’ or ‘Efficient’ Tests, surveys and sampling techniques developed by psychologists and sociometrists have made it possible to probe human attitudes and drives, but many managerial controls over interpersonal relationships must continue to be based upon intangible standards considered judgment, trial and error, and even on occasion sheer hunch.
7. Goals for standards: However, with the present tendency for better-managed enterprise to establish an entire network of verifiable qualitative or quantitative goals at every level of management, the use of intangible standards, while still important, is diminishing in complex programme operations as well as in the performance of managers themselves, modern managers are finding that through research and thinking it is possible to define goals it is likely to take the form of standards. For example, if the program of district sales office is spelled out to include such elements as training salesmen in accordance with a plan with specific characteristics, the very fact of the plan and its characteristics, furnish standards which tend to become objective and, therefore, ‘Tangible’.

Critical Standards