MASTER IN MANEGEMENT MAJOR IN

CRIMINAL JUSTICE
(TOPIC 7: CONTROL)
1.0. INTRODUCTION

Control can be defined narrowly as the process a manager takes to assure

that actual performance conforms to the organization's plan, or more broadly
as anything that regulates the process or activity of an organization. The
following content follows the general interpretation by defining managerial
control as monitoring performance against a plan and then making
adjustments either in the plan or in operations as necessary.

A management control systems (MCS) is a system which gathers and uses

information to evaluate the performance of different organizational resources
like human, physical, financial and also the organization as a whole
considering the organizational strategies. Finally, MCS influences the
behavior of organizational resources to implement organizational strategies.
MCS might be formal or informal. The term ‘management control’ was given
of its current connotations by Robert J. Mockler (1970).

Robert N. Anthony (1970) defined Management Control is the process by

which managers influence other members of the organization to implement
the organization’s strategies. Management control systems are tools to aid
management for steering an organization toward its strategic objectives and
competitive advantage. Management controls are only one of the tools which
managers use in implementing desired strategies. However strategies get
implemented through management controls, organizational structure, human
resources management and culture.

James G. March (1958) showed management control system as a black box.

The term black box is used to describe an operation whose exact nature
cannot be observed. MCS involves the behavior of managers and these
behaviors cannot be expressed by equations. James G. March (1958)
showed that management accounting has three major subdivisions: full cost
accounting, differential accounting and management control or responsibility
accounting.

Management control process is the process where managers at all levels

ensure that the people they supervise implement their intended strategies.

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2.0. THE CONCEPT OF CONTROL AND MANAGEMENT CONTROL
SYSTEM

In order to understand the reasons as to why organizations need to know

management control, first the concept of control and control management
system should be understood well in the way they operate. The below
description provided by Samuel Eilon (1979) highlight on the two as follows;

2.1. CONTROL AS A FUNCTION

The control function is concerned with ensuring that planning, organizing,

staffing and leading functions result in the attainment of organizational
objectives.

In other words, control is a tool that helps organizations measure and

compare their actual progress with their established plan.

Supervision is a part of control; it helps identify deviations from the

established standards of performance.

2.1.1. THE ELEMENTS OF CONTROL

There are six elements of control:

(a) Authority

(b) Knowledge

(c) Guidance

(d) Direction

(e) Constraint

(f) Restraint

To be in a position to exercise control, the manager must know what the

situation is, what it should be and how to correct it. Besides, he must have
the authority to take the appropriate action.

2.1.2. CHARACTERISTICS OF MANAGERIAL CONTROL

Managerial control has the following characteristics:

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1. The control process is cyclical.

2. Control is a function of management; a follow-up action to other

functions of management.

3. Control is a dynamic process.

4. Controlling is often viewed negatively by employees.

5. Control is both, anticipatory and retrospective.

6. Ideally, each person in the business views control as his/her

responsibility. The organizational culture should prevent a person
walking away from a small problem which can be solved.

7. Controlling is related to each of the functions of management.

Controlling builds on planning, organizing and leading.

8. Control by its nature is both restrictive as well as regulative.

However, the modern concept of control is concerned more with

regulation than with restriction as the latter is a very limited form of
activity.

9. The authority to control vests with the higher levels of management

because it is the superior who has delegated authority to the subordinate to
carry out certain activity. Each higher level of management seeks to ensure
that the plans are adhered to by those over whom they have authority.

10. Controls are a method measuring progress and the present direction
of management thinking is towards the desirability of self-discipline in this
respect.

2.1.3. IMPORTANCE OF CONTROL

The control function is gaining importance in today's organizations due to a

number of factors. These factors include:

(a) The need for accountability.

(b) The need to detect environmental changes that significantly affect

organizations.

(c) The growing complexity of present day organizations and the need to
identify operational errors in organizations to avoid incurring excessive
costs.
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2.1.4. BASIC CONTROL PROCESS

When exercising the control function, a manager measures the

performance of an individual, a plan, or a program against certain pre-
determined standards and takes corrective action if there are any deviations.
The process involves the following steps:

1. Determining areas to control: It covers all the areas of business,

namely, policies, procedures, men, money, machines and equipment,
public relations, human relations, research and development and so
on.

2. Establishing standards: Although the temptation may be great,

lowering standards to what has been attained is not a solution to
performance problems. The need to lower standards arises when they
are unattainable due to resource restrictions and factors external to
the business.

3. Measuring performance

4. Comparing performance against standards

5. Recognizing good or positive performance.

6. Taking corrective action when necessary

7. Adjusting standards and measures when necessary.

2.1.5. REQUIREMENTS OF EFFECTIVE CONTROL

1. Control should reflect plans, positions and structures

2. They should be understandable.

3. They should be cost-effective

4. Controls should identify only major/important exceptions.

5. Control systems should be flexible

6. Control systems should provide accurate information.

2.1.6. CHARACTERISTICS OF EFFECTIVE CONTROL SYSTEMS

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 Effective control systems have the following characteristics:

1. Control at all levels in the business

2. Acceptability to those who will enforce decisions

3. Flexibility

4. Accuracy

5. Timeliness

6. Cost effectiveness

7. Understanding

8. Balance between objectivity and subjectivity

9. Coordinated with planning, organizing and leading.

2.1.7. DYSFUNCTIONAL CONSEQUENCES OF CONTROL

Employee resistance can easily make control efforts dysfunctional.

The following behaviors demonstrate means by which the manager's control
efforts can be frustrated:

1. Game playing

2. Resisting control

3. Providing inaccurate information

4. Following rules to the letter

5. Sabotaging

6. Playing one manager off against another.

2.2. MANAGERIAL CONTROL

Management control is the process of assuring that resources are

obtained, used effectively and efficiently in the accomplishment of the
organization's objectives.

Management control can be defined as a systematic effort by business

management to compare performance to predetermined standards, plans or
objectives in order to determine whether performance is in line with these
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standards and presumable in order to take any remedial action required to
see that the business and human and other corporate resources are being
used in the most effective and efficient way possible in acquiring corporate
objectives.

The actual performance is compared with the expected. Depending

upon the evaluation of any variation from standard, some sort of action is
taken.

2.2.1. STEPS IN PROBLEM SOLVING/ DECISION MAKING PROCESS

1. Diagnose the situation and review all of the facts in order to find and
define the problem.

2. Examine the problem and review the facts in order to find the key
factors affecting the problem and its solution. This step is sometimes
referred to as 'premising'.

3. Develop alternative solutions to the problem.

4. Test and evaluate the alternatives to determine the best solution.

5. Construct a clear statement of the solution selected, and convert the

decision into a plan of action.

2.2.2. FACTORS AFFECTING MANAGERIAL PHILOSOPHY

Application of the concept of management control requires the

following:

1. Identifying key factors in the business operation which need to be

controlled in order to achieve a given over-all result.

2. Specifying the basis for establishing standards of performance for

each control factor, such as forecasts, budgets, standard costs,
turnover ratios and lead times.

3. Defining the information-accounting and operating data and statistics

that must be accumulated to measure status and performance.

4. Establishing a reporting structure that identifies performance in each

control area, relate causes and effects, signals, trends, and identifies
results by responsibility under the plan of organizations.

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2.2.3. MANAGEMENT CONTROL PROCESS IN ORGANIZATION

Management control is the process by which managers influence

other members of the organization to implement the organization’s strategies.
Management control process involves informal interactions between one
manger and another manager and his or her subordinates. Informal
communications occurs by means of memoranda, meetings, conversations,
and even by facial expression. The informal interactions take place within a
formal planning and control system. Such system includes the following
activities:

1) Strategic planning: it is process of deciding on the major programs that

organization undertakes to implement its strategies and appropriate amount
of resources that will be devoted to each. The output of the process called
as strategic planning. This is the first step in management control cycle.

2) Budget planning: budget represent fine tuning of the strategic planning,

incorporating most current information. In budget, revenue and expenses are
rearranged from programme to the responsibility centre, thus budget shows
the expenses that each managers expected to occur. The process of budget
preparation is essentially one of the negotiations between the managers of
each responsibility centre and their superior.

3) Execution: managers execute the programme or part of the programme for

which they are responsible and also report on what has happened in the
course of fulfilling that responsibility. Reports on responsibility centre may
show budgeted and actual information, financial and non-financial
performance measures, internal & external information.

4) Evaluation of performance: the process of evaluation is comparison of

actual expenses and those that should have been incurred under
circumstances. If the circumstances assumed in the budget process are
unchanged, the comparison between budgeted and actual amounts. If
circumstances have changed, these changes are taken into accounts.
Ultimately, the analysis leads to praise or constructive criticism of the
responsibility centre managers.

2.2.4. MANAGEMENT CONTROL SYSTEMS

A Management Control Systems (MCS) is a set of inter-related

communication structures that facilitates the processing of information for the
purpose of assisting managers in coordinating the parts and attaining the
purpose of an organization on a continuous basis. All organizations use
control system both formal and informal.
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 The purpose of management control system is to encourage
managers to take actions which are in the best interests of the company.

2.2.5. ELEMENTS OF A CONTROL SYSTEM

Any control system has four basic elements:

1. A detector or sensor: a device that measures what is actually

happening in the situation being controlled.

2. An assessor: A device for determining the significance of what is

happening; i.e., comparison with some standard or expectation.

3. An effector: A device that alters behavior if the assessor indicates the

need. This device is often called 'feedback'.

4. A communication network: Devices that transmit information between

the detector and the assessor and between the assessor and the
effector.

The management control process is more complicated than what has

been described in detectors, assessors, effectors and a communication
system. These are as follows:

1. The standard is not preset.

2. Like controlling an automobile, management control is not automatic.

3. Management control requires coordination among individuals. All the

separate parts of an organization are required to work in harmony with
each other.

4. The connection from perceiving the need for action and the action
required to obtain the desired result, may not be clear.

5. Control in an organization does not come about solely or even as a

consequence of actions. Much control is 'self-control'

2.2.6. ACTIVITIES IN MANAGEMENT CONTROL

Management control involves a variety of activities including:

1. Planning what the organization should do.

2. Coordinating the activities of several parts of the organization.

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3. Communicating information.

4. Evaluating information.

5. Deciding what, if any, action should be taken.

6. Influencing people to change their behavior.

2.2.7. SYSTEMS

A system is prescribed way of carrying out activity or activities, usually

the activities are repeated. Most systems are less precise than computer
programs, their instructions do not cover all eventualities and the user of the
system must make judgments when these eventualities occur. Nevertheless,
a system is characterized by more or less rhythmic, recurring, coordinated
series of steps that are intended to accomplish a specific purpose.

2.2.8. PURPOSE OF MANAGEMENT CONTROL SYSTEMS

The purpose of an organization can be analyzed as follows:

1. Mission of the organization, which is directed, first and foremost,

towards meeting needs of customers and society.

2. The term objectives to refer to specific, short-term and predominantly

quantitative pursuits of an organization. We can term goals to refer to
specific long-term pursuits of an organization.

3. Each part of an organization has a purpose, objectives and goals. The

MCS knots the organization together so that each part, by exercising
autonomy given to it fulfills a purpose that is consistent with and
contributes to the fulfillment of the overall purpose of the organization.

2.2.9. MANAGEMENT CONTROL PROCESS

Two aspects involved; namely:

(a) System

(b) Process

System outlines the following:

(a) Authority relationships

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(b) Autonomy delegation

(c) Intra-organizational relationships (among sub-units)

(d) Parameters for performance

(e) Rewards and punishments for achievement and non-achievement

Process involves the managerial processes involved in:

(a) Establishing goals and objectives

(b) Performance appraisal of responsibility centers

(c) Ensuring achievement of targets and budgets by various

organizational sub-units

(d) Follow-up of remedial action plans

(e) Implementation of decisions taken in performance review meetings

(f) Information flow among responsibility centers in the organization

Generally the process of control is as follows:

(a) Review of past performance of various units of the organizations and

targets and specifications for the next year

(b) Periodical review of actual results and its comparison with targets

(c) Identification of areas which require improvement. This also includes

identification of shortfalls and their reasons

(d) Deciding remedial actions

2.2.10. DESIGNING MANAGEMENT CONTROLS

There are a few aspects which must be considered while designing a

control process. These are as follows:

(a) The process of control should be constructive

(b) Standards should be challenging but attainable

(c) Objectives should be expressed in measurable terms

(d) Control should focus on the objectives and key results of an activity
and should be limited in number.

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(e) A single person must be assigned the responsibility of achieving a
single objective.

(f) For achieving true control in the current period, projected performance
should be compared with the desired performance.

g) It is necessary to identify early warning predictors of the variables

that the management seeks to control.

(h) It is better to carry out sampling by direct observation.

(i) An acceptable range of variation for the value of each variable

that has to be controlled.

(j) The severity of the problems should be considered and its causes
should also be reviewed.

2.2.11. DESIGN OF THE MANAGEMENT CONTROL SYSTEM

The MCS is designed by incorporating the following basic steps:-

1. The classification of organization into responsibility centers.

The term responsibility center is used to denote any organization unit that
headed by a responsible manager.

A responsibility center exists to accomplish one or more purposes known as

objectives.

There are four types of responsibility centers:

(a) Revenue centers

(b) Expense centers

(c) Profit centers

(d) Investment centers

2. Fixing up responsibility in accordance with the firm's objectives and

deciding critical variables/ key factors for each responsibility centers:

• A critical variable is that aspect of operation at the responsibility

center, which affects the realization of goals and objectives; if it is carried out
ineffectively.

• The point selected for control should be critical

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• this facilitates the manager to increase his span management, effect
cost savings and improve communication.

3. Developing information system which facilitates real time information

regarding operations which deviate from desired results, specially critical
variables and relate results to individual accountability.

The word information means data relevant for a particular purpose.

Information about a critical variable is a must for managerial control process.

The formal information system should be structured such that it:

(a) Provides regular collection of data regarding each and every

responsibility center.

(b) Yields, processes and summarizes data

(c) Presents relevant information to managers for control as and when

needed.

3.0. REASONS FOR MANAGEMENT CONTROL NEEDS IN

ORGANIZATIONS

Management control seems to be the basic mechanism to ensure that

organization meets its mission and vision in an efficient way. In a competitive
era of globalization organizations should be working hard to learn and
practice control mechanisms for their own survival. This is to stress the fact
that all organizations need to know the details of management control as
presented here below the importance or needs for management control as to
why organizations should go for that.

(a) To Know Quantity

It is important for the management to know how many products

needed by customers, how many products that are in the stock at the time,
what is the production projection etc. The aspect of quantity is important
because once managers know about that can easily execute control as to
whether they want to produce more and reduce production basing on some
factors.

A good example is for bottling company like Coca Cola Kwanza Ltd in
Dar-es-salaam Tanzania whereby because of strong competition from Pepsi,
the sales of Coca Cola has declined at some percentage, worse enough new
entrants such as Azam Cola and Soyona got into the market to add
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competition hence this situation has taken management to think of suitable
control mechanism as a result the distribution in Dar-es-salaam has been
reduced and some other stock being sent to upcountry. This is just a short
term mechanism while they think of re-entering the market in a more
aggressive manner.

(b) To Know Quality

This is another important aspect as to why organizations need to know

about management control. As presented earlier that now days there are so
many alternatives for services and products hence the choice remains to
consumer. For consumer a number of factors come into consideration as to
where he/she should purchase his/her needs. Among those factors quality
plays a vital role. This means that an organization which focuses on quality
will always get more customers and also this will be reflected even in
revenue. Therefore management should always focus on quality to ensure
that credibility of the organization is recognized.

There is an example of the global company known as Samsung

whose management emphasized two things known as quality and innovation,
this company has designed quality products with up to date technology in
electronics. Samsung has managed to compete with other brands such as
Sony, Hitachi, HP, Panasonic and many others. The success towards this is
hard working and constant ensuring of quality by management that’s why all
over Europe and America Samsung is also a lead seller despite its origin is in
Korea and large production plants are in China.

(c) Time available

Things are rushing and time is never sufficient for everything, time is a
resource which once goes never gets back. Services and products are time
conscious that means management needs to exercise control over it.
Management needs to know what time is available to implement any thing.
Time is such a resourceful thing in such a way that a company or person who
is aware of these beats away competitors only because they know how to
value time. However, the time factor when comes to the services delivery is
depending on nature of activity and number of staff available therefore
management should always be aware of the fact that some other activities
have got deadlines therefore accuracy and hardworking are needed.

Exim bank has resolved to serve customers as quickly as possible.

Knowing the fact that many customers they serve are business people who
look for money and to them time is money as well. This means that

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management has established serious control as no customer who is kept
pending. Therefore organizations should know about management control
because it enables utilization of time effectively and efficiently.

d) Knowing availability of personnel for doing the work

Management controls help to know the availability of employees at

work as to who is currently available and who is not, who is a good and
capable employee and who is not. This can go as far as to the filling
employment post. Therefore, management control plays a vital role in
shaping an organization.

The fact that many organizations possess attendance books for

employees to sign, that book is not there for show, in fact it is useful as it can
be used as a reference to show who is present at work and who is not.

e) Knowing availability of material for doing the work

Management control enables the organization to know whether there

are sufficient materials available for running day to day activities of the
organization or not. If materials are not available or the number is insufficient
then management has to find an alternative to rescue the situation. Through
doing that management will be doing what is known as the control.

Achievement of organizational goals depends on the availability of

resources such as people, materials like stationery, computers and other
office tools so management control ensures the availability of those materials
in an organization.

f) Recognition of delays and variation

Management control enables an organization to know immediately of

any delays, hold ups or variation of products or services and goes as far as
to examine what happened, its cause and remedy. The purpose for this is to
make sure there is achievement of the core objectives of the organization
despite any incoming challenges.

The Japanese are world sellers of new and used vehicles in the globe,
they sell cars to all continents. In Africa, used cars are the commonest. The
Japanese government knowing that used cars are not as good as new ones
and in effort to protect this business because the government is earning a lot
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and also to make sure that the buyer is get something of a given standard,
they have established Japanese Agency for Inspection (JAAI) which among
other duties can identify variation of products and if the car is just a cramp no
inspection certificate given.

g) Management control establishes the need for accountability.

Through management control an organization can easily know what is

being done, remove such hindrances as to who is doing, how is it being
done, what is it costing, when will it be completed. This is serious sense of
accountability as because of management control systems everything can
easily tracked, management can know what is being done at the moment and
who is the assigned person, if there are some challenges can be noticed
easily and better solution can always established at the convenience of the
organization.

In most public offices in Tanzania this aspect is missing and also

pauses great challenge in execution of normal objectives of an organization.
It can easily be noted that a junior or head of department is doing something
without notifying his/her supervisor. The recent case at the ministry of
infrastructure whereby a minister and deputy minister are not in good terms
as one claiming not to be informed on some of key issues in the ministry.

i) Protection of resources

Misuse of resources, misallocation of resources and embezzlement of

funds are some of the core challenges facing many African organizations.
The sense integrity is at low level. The office stationeries are being used for
personal and family use, the office furniture are being used for personal use,
the office vehicle is being used for typical private matters and so many other
examples. Therefore, the need for management control is important and one
of the reason as to why this is very much needed in our Tanzanian
community is for protecting our resources. This starts in our homes, office
and even national resources.

The internal audit department serves for this purpose in many

organizations as to see if everything has been used properly or some
individuals got person benefits out of this. For the government level there is
Controller and Auditor General (CAG) who is making sure that everything is
being under proper use and if it is not reports to the government for proper
action.

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j) Management control provides for periodic inspection

It is common for organization to undertake stock taking so as to satisfy

themselves whether the stock is in a proper manner or not. Recently the
government conducted inspection to know who real employees are and who
ghost employees are as all employees were required to appear in person.
This is one of the benefits of management control as organization is never
going to regret because it is very watchful on everything taking place in the
organization.

One of the areas where inspection is regularly conducted is in

education department whereby to ensure a given standard in education, the
government has established various zonal inspection department to inspect
and control the quality, reports for some problems to the government for
action taking.

k) Controls make plans effective.

For the objectives of an organization to be effective, managers need to

measure progress, offer feedback, and direct their teams so to succeed. This
is very important because management control will always prevent deviating
away from the core mission of an organization and that consistency will
always make plans effective and also efficient.

l) Controls make sure that organizational activities are consistent.

Consistency is an important ingredient in an organization. This means

that there is order and chain of authority. Through management control all
organizational activities are settled to be consistent, also the policies and
procedures help to ensure that efforts are integrated. This means that an
organization with management control can be in better chance to succeed
because the activities are in order because everyone knows his/her role also
the policies and procedures are supporting easy operation contrary to an
organization without this.

m) Controls make organizations efficient.

Efficiency probably depends more on controls than any other

management function because this is concerned with resources. The
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question is how those resources are used when it comes to production. As
the matter of fact resources are scarce so meeting organization’s objectives
with fewer resources could be the option of most managers, but this possible
only when there is management control.

Kenyan Bureau of Standards is one of the pubic organizations which

are performing well in Kenya, within the limited budget allocated still it is
performing better in a sense that now it is hard to import any fake materials in
Kenya. This is due to serious management control and a keen commitment
found in employees.

n) Controls provide feedback on project status.

Feedback is an important aspect in an organization. Always

employees are happy when they get feedback about anything. Management
control not only measure progress, but controls also provide feedback to
participants as well. Feedback influences behavior and is an essential
ingredient in the control process. This means when a manager used to
provide feedback frequently to employees the room for errors is being
minimized because when there are problems solutions can be obtained
because feedback provides room for discussion and recommendation.

o) Controls aid in decision making.

The ultimate purpose of controls is to help managers make better

decisions. Controls make managers aware of problems and give them
information that is necessary for decision making. In other language lack of
control leads to poor results because poor decisions will always be taken by
those in the authority. Decision making is important and it is routine because
everyday organization decides on a variety of issues so through better
control mechanism an organization will not need to worry about the quality of
decision because it will be already assessed critically.

p) Control enable budget consistency

Many organizations are facing this critical challenge as budget is

never enough to enable accomplishment of all key objectives. However
sometimes it can be found that despite the budget limitation yet it is misused
to the maximum order. Therefore management control is there to make sure

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that no deviation from the budget established and through the auditing works
budget is kept followed.

Vodacom Tanzania is one of the companies with better budgeting

procedures. From the revenue estimation to revenue realization the budget is
going as planned. All departments are required to use money as it is in the
budget and not otherwise. If there is a vital reason authorization can be made
by managing director.

q) The need to detect environmental changes that significantly

affect organizations.

In the management control a lot of things can be noticed and one of

them changes in the working environment which in one way or another
can affect performance of an organization. Through management control
those changes can be identified and better options can be developed for
further implementation of the organizational goals.

r) Lastly management control is important so as to identify

operational errors. The growing complexity of present day organizations
and the need to identify operational errors in organizations to avoid
incurring excessive costs. As it is well known errors are happening many
times in organizations. However the problem is not errors but the problem
is how to deal with those errors. So whenever there is management
controls errors can be easily managed and in so doing a lot of excessive
costs which should come through repetition are avoided.

4.0. CONCLUSION

Management control is a prerequisite for modern organizations

operating in the competitive and globalized world. Management control is the
only remaining way to ensure quality, consistency, feedback, efficient and
effectiveness of organization objectives. Management control is operating in
some organizations in various ways such as auditing department, quality
assurance department and any other format that an organization can prefer.
As presented above an organization with management control can be easily
identified because the level of deviation from its core objectives is minimal
comparing to an organization without management control because it will be
hard to collect feedback. Therefore it urged that all organizations which
intend to achieve supper success in their operation should always opt and
implement management control because it is cheaper and can be conducted
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in a convenient way of a respective organization also it has a lot of benefits
as explained above.

REFERENCE

James G March; Herbert A Simon (1958). Organizations. New York: Wiley.

pp. 9–11. ISBN 0471567930 9780471567936.

Richard Arvid Johnson (1976). Management, systems, and society : an

introduction. Pacific Palisades, Calif.: Goodyear Pub. Co.. pp. 148–142. ISBN
0876205406 9780876205402.

Robert J. Mockler (1970). Readings in Management Control. New York:

Appleton-Century-Crofts. pp. 14–17. ISBN 0390644390 9780390644398.

Robert N Anthony (1970). The management control function. Boston, Mass.:

Harvard Business School Press. pp. 14–17. ISBN 0875841848
9780875841847.

Samuel Eilon (1979). Management control. Boston, Mass.: Harvard Business

School Press. ISBN 0080224822 : 9780080224824 0080224814
9780080224817.

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