A Prescription for Entrepreneurial Management - Essay Example

Control is an essential function of management in every organization. The management process is incomplete and sometimes useless without the controlfunction. The term 'control' has different meanings in different contexts. In the management context 'control' refers to the evaluation of performance and the implementation of corrective actions to accomplish organizational objectives. Some people confuse 'control' with 'supervision.' Supervision is a part of control; it helps identify deviations from the established standards of performance. Importance of Controlling - The control function is gaining importance in today's organization due to a number of factors. These factors include the need for accountability in organizations, the need to detect environmental changes that significantly affect organizations, the growing complexity of present day organizations and the need to identify operational errors in organizations to avoid incurring excessive costs. In addition to addressing the above mentioned factors, controlling plays an important role in helping managers detect irregularities, identify opportunities, handle complex situations, decentralize authority, minimize costs, and cope with uncertainty. Coping with Uncertainty - In today's turbulent business environment, all organizations must cope with change. When organization goals are established, they are based on the knowledge available at that point of time. However, by the time the goals are accomplished, many changes may have occurred in the organization or its environment. An improperly designed control system, however, may result in poor organizational performance. Detecting Irregularities - Control system help managers detect undesirable irregularities, such as product defects, cost overruns, or rising personnel turnover. Although small mistakes and errors may not seriously damage the financial health of an organization, they may accumulate and become very serious over time. Early detection of such irregularities can prevent minor problems from mushrooming into major ones and often save a great deal of time is money for the organization. Example: A large radar detector manufacturer in the US named Whistler Corporation once faced with such rapidly escalating demand that it stopped giving attention to quality. This led to a rise in the defect rate from 4% to 9% to 15 % and finally, to 25%. A manager observed that 100 out of 250 employees of the company were spending all their time fixing defective units and that an inventory worth $2 million was still awaiting repair. Had the company detected the defects and rectified them early, the problem would never have increased to such proportions. Problems such as missing important deadlines or selling faulty merchandise to customers are sometimes difficult to rectify. Identifying aberrations in the early stages helps organizations avoid such problems. Identifying Opportunities - Control also helps managers identify areas in which things are going better than expected, thereby alerting management to possible future opportunities. For example, division managers at the St. Louis-based May Department stores prepare and generate monthly reports that specify the items that have high demand and the amount of money those items are generating. On the basis of these reports, the chain develops successful merchandising strategies for all its stores like what to buy, which vendors to buy from, and how to display the merchandise etc. Handling Complex Situations - Another important factor contributing to the need for a control mechanism is that growing complexity of today's organizations. When a company requires only on kind of raw material, produces only one kind of product has a simple organization design, and enjoys constant demand for its products, it can afford to have a very basic and simple system of control. But, as organizations grow or engage in producing many products from a number of different raw materials, and operate in a large market area with many competitors, efficient and effective co-ordination becomes necessary. In such cases, managers have to keep track of various activities to make sure that they are well synchronized. Thus, sophisticated control systems become necessary to maintain adequate control in large and complex organizations. Example: When Emery Worldwide, a profitable airfreight company, bought Purolator Courier Corporation, the new Emery that emerged after the acquisition was much bigger and more complex. Initially, no new controls were adopted for the operations of the new entity. This led to increased costs, loss of money and market share, and deterioration in the quality of service. Eventually, the company could turn itself around from the verge of bankruptcy only by adopting more elaborate controls. For a manager, it is not at all possible and even not fair to focus on only one thing - either people management or task management. As a manager, it is all the more necessary for him to maintain a health balance between both task and people i.e., control and relationships in organization. But, it sometimes so happens that most of the mangers swing between both above mentions aspects which are usually not considered as a good quality for a manager. Going ahead, now let us see how this balance could be maintained. It usually so happens that, managers who focus more on the factor of controlling tend to get the job done by their subordinates. Getting the job done will be their priority rather than anything else. Such managers usually look at their subordinates from such a perspective that they simply think that people are just means or tools that help in getting the job done. They hardly give any importance to people and their feelings etc., i.e., they are not much worried about maintaining a healthy relationship with their subordinates, which actually means a lot when it comes to the performance of the organization as a whole. It is always better to try and motivate subordinates by way of rewards and other similar things to improve efficiency in the work rather than just trying to impose stress to get the work done. Certain management theories like Douglas McGregor's Theory X have stated that, it is a general tendency of human beings to work efficiently if closely monitored and otherwise get distracted. Hence, motivating them correctly and getting the work done is always a better approach. There are yet some managers who focus much on the emotional-well being of their subordinate, which indeed is believed in yielding higher productivity of the organizations. Even in this context, there are certain management theories, especially Douglas McGregor's Theory Y which strongly supports this fact, which say that if people are happy they produce more. Additionally, it is also believed that people who are happy at work are generally motivated with lesser effort and along with this they also think intelligently about the work assigned to them, thereby with a very little guidance and support, they themselves plan and monitor the work given to them and at the same time also yield better results. People will be usually self-directed to meet the objectives of their work. To conclude, it can be said that people can be motivated in a better way, if managers try understanding the beliefs that motivate both personally and also the subordinates. Maintaining a balance between both control and work relationships will surely help managers in getting efficient and effective work from the subordinates which in turn would obviously help the organization on whole, which means employees are also benefited in turn. References: 1. Introduction to Management, published by ICFAI center for Management Research, November, 2003, Ref no. IM 11 2K3 08. 2. Peter F. Drucker, 'A Prescription for Entrepreneurial Management,' published in Industry Week. 3. http://changingminds.org/explanations/preferences/task_person.htm 4. http://changingminds.org/disciplines/leadership/actions/ohio_state.htm 5. http://www.accel-team.com/human_relations/hrels_03_mcgregor.html 6. http://www.netmba.com/mgmt/ob/motivation/mcgregor/ Read More