Understanding Control in Business Administration
Definition of Control
Control in business administration is the administrative process element recorded in the information that results from the implementation of plans, programs, and budgets for assessing compliance with established objectives.
Importance of Control
Control is important because:
- It establishes measures to correct activities to achieve the successful execution of the plan.
- It applies to everything: things, people, and events.
- It determines and analyzes the causes of deviations rapidly to avoid future occurrences.
- It locates areas within the administration responsible for establishing timely remedies.
- It provides information on the current situation, serving as a basis for plans to restart the planning process.
- It reduces costs and saves time by avoiding errors.
- Its application in rationalization directly affects the administration and impacts the achievement of productivity across all enterprise resources.
Establishment of Standards
The establishment of standards involves creating a unit of measure that serves as a model, brochure, or pattern upon which checks are carried out.
Performance Measurement
Performance measurement occurs when control is properly implemented, and it is possible to determine exactly what subordinates are doing.
Correction
Correction serves to immediately rectify deviations and establish new plans and procedures to prevent recurrence.
Feedback
Feedback is used for process control, rescheduling with information obtained about the cause of diversion.
Standard Setting
Standard setting includes all units of measurement to be established in the planning phase, such as the number of units to produce, the number of units to sell, and quality requirements.
Principles of Control
At least three key principles of control are:
- Balance: Ensuring that when authority and responsibility are delegated, there is verification that the assigned tasks are being met and that the authority is being used properly.
- Objectives: Control is more effective when based on clear, quantitative standards.
- Opportunity: Applying controls before an error occurs, anticipating the fact, and taking remedies early to avoid compromising the company’s objectives.
Performance Measurement
Performance measurement is based on rules being performed. Ideally, it provides a way to detect departures before they happen and to take appropriate action.
Implementation of Corrective Actions
If performance does not comply with established levels, and analysis indicates that an intervention is required, corrective actions may involve changes in one or more of the company’s operations.
Control System as Feedback
A control system focuses on using information from previous results to correct possible future standard deviations.
Critical Control Points
A critical control point is an operation, practice, procedure, face, or stage that may intervene on one or more factors to eliminate, avoid, or minimize a risk.
Process of Standards and Shared Assessments
This involves selecting a working group including heads of areas, sections, and preferably a group of expert advisors in the subject, which should involve an attorney, labor law expert, and manual wing to comply with the company structure, staff requirements, and the country’s laws.