Requirements of Effective Control System

There are certain requirements of effective control systems. They are briefly explained below:

(a). Feedback.

(b). Objective.

(c). Suitability.

(d). Prompt Reporting.

(e). Forward Looking.

(f). Flexible.

(g). Economy.

(h). Acceptability.

(i). Suggest Remedial Action

(j). Motivation.

(k). Controls generate accurate data and information.

(L).Timeliness.

(M). Integration.

(a). Feedback.

Feedback is the process of adjusting future actions based upon the information regarding past performance. If feedback practice is followed by the management, the control process will be very easy.

(b). Objective.

Control should be objective. It means there is a certainty of control. The impartial appraisal of performance is necessary for certainty of control.

(c). Suitability.

The control should be objective. It means there I a certainty of control. The impartial appraisal of performance is necessary for certainty of control.

(d). Prompt Reporting.

The deviations from standards should be informed without any delay. If there is any delay caused, exercising control will be of no use.

(e). Forward Looking.

Effective control system must focus how the future actions will conform to plans. In other words, the control system should provide an aid in planning.

(f). Flexible.

The standards or criteria should be altered from time to time. The reason is that the standards should conform to present requirements. Hence, the control system should be flexible in accordance with the changed standards or criteria.

(g). Economy.

The benefits derived from the control system should be more than the cost of exercising such a control system.

(h). Acceptability.

Controls should be such that all people who are affected by it are able to understand them fully and accept them. A control system that is difficult to understand can cause unnecessary mistakes and frustration and may be resented by workers. Accordingly, employees must agree that such controls are necessary and appropriate and will not have any negative effects on their efforts to achieve their personal as well as organizational goals.

(i). Suggest Remedial Action.

The effective controls system should disclose the places of failure, persons for failure and how they have been dealt with.

(j). Motivation.

A good control system should be employee centered. The control is designed to secure positive reactions from employees. If large deviations are found, the employees will be properly directed and guided instead of being punished. The very purpose of control is prevention and not punishing.

(k). Controls generate accurate data and information.

Accurate information is essential for effective managerial decisions. Inaccurate controls would divert management efforts and energies on problems that do not exist or have a low priority and would fail to alert managers to serious problems that do require attention

(L).Timeliness.

There are many problems that require immediate attention. If information about such problems does not reach management in a timely manner, then such information may become useless and damage may occur. Accordingly controls must ensure that information reaches the decision makers when they need it so that a meaningful response can follow.

(M). Integration.

When the controls are consistent with corporate values and culture, they work in harmony with organizational policies and hence are easier to enforce. These controls become an integrated part of the organizational environment and thus become effective.