An important feature of the people – organisation relationship is the need for control. Control systems exist in all spheres of the operations of the organisation and are necessary part of the process of management. Control is concerned with ganging the measure of succes in achieving the goals and objectivers of the organisation. Control is an integral part of the process of management. The manager needs to understand the nature of power and control in order to improve organisational performance (Mullins, L.J. 1983). Management control is primarily a process for motivating and inspiring people to perform organization activities that will further the organization’s goals. It is also a process for detecting and correcting unintentional performance errors and intentional irregulariries, such as theft or misuse of resources (Berry, A.L., Broadbent, J., Otley, D. 1995).control, organizational performance, management control

Luigi-Nicolae Dumitrescu

English

Research Papers in Economics

                                                                                                                            
 
 
Studies in Business and Economics 
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CONTROL – ESSENTIAL FACTOR OF ORGANISATIONAL 
PERFORMANCE 
 
 
DUMITRESCU Luigi – Nicolae  
 
Abstract:  
An important feature of the people – organisation relationship is the need for control. 
Control systems exist in all spheres of the operations of the organisation and are necessary part 
of the process of management. 
Control is concerned with ganging the measure of succes in achieving the goals and objectivers 
of the organisation. Control is an integral part of the process of management. The manager 
needs to understand the nature of power and control in order to improve organisational 
performance (Mullins, L.J. 1983). 
Management control is primarily a process for motivating and inspiring people to 
perform organization activities that will further the organization’s goals. It is also a process for 
detecting and correcting unintentional performance errors and intentional irregulariries, such as 
theft or misuse of resources (Berry, A.L., Broadbent, J., Otley, D. 1995). 
Keywords: control, organizational performance, management control 
 
  Introduction 
  The process of control is at the centre of the exchange between the benefits 
that the individual derives from membership of an organisation and the cost of such 
benefits. By their very nature, control systems are concerned with the regulation of 
behaviour. Organizations require a certain amount of conformity as well as the 
integration of diverse activities. I tis the function of control to bring about conformance 
to organizational requirements of the organization (Tannenbaum, A.S., 1968). By their 
very nature, control systems are concerned with the regulation of behaviour. 
  Control is not only a function of the formal organisation and a hierarchical 
structure of authority. It is also a feature of organisational behaviour an a function of 
interpersonal influence (Johnson, P. 1993). Control is, therefore, a general concept 
which is applied to both individual behaviour an organisational performance. 
  Contents 
  At the organisational level, management need to exercise „control” over the 
behaviour and actions of staff in order to ensure a satisfactory level of performance. 
Managerial control systems are a means of checking progress to determine whether    
 
 
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the objectives of the organisation are being archieved. Control completes the cyrcle of 
managerial activities. It involves the planning and organisation of work functions, and 
guiding and regulating the activities of staff. Control provides a check on the execution 
of work an don the success of failure of the operations of the organisation. The whole 
purpose of management control is the improvement in performance at both the 
individual and organisational level (fig. 1). 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
 
 
 
 
 
Fig. 1. The nature of management control (5. Laurie J. Mullins, 1999) 
 
The classical weiters placed emphasis on structure and formal organisation, 
sets of principles to guide managerial actions, standardished procedures and the 
assumption of rational and logical behaviour. Writers who place emphasis on the 
technical requirements of the organisation tend to support a high level of control as 
necessary for effiency. For example, Fayol (1949) describes control as follows: „In an 
undertaking control consist in verifying whether everything occurs in conformity with 
the plan adoptedm the instructions issued and principles established. It has for object 
to point out weaknesses and errors in order to rectify them and prevent recurrence. It 
operate son everything, things, people, actions”. 
The human relations approach place don the social organisation, an don the 
importance of groups and informal relationships. Those writers who place emphasis on 
the social needs of individuals within the work organisation see a high level of control 
as self-defeating. It produces a negative response increases internal conflict or results 
only in short-term improvement in performance (Blake, R.R., Mouton, J.S. 1985). 
CONTROLLING 
ORGANISATIONAL 
PERFORMANCE 
Improvement in performance 
INDIVIDUAL 
BEHAVIOUR 
Basic activities of management 
Clarification of objectives 
Planning 
Organising 
Directing                                                                                                                             
 
 
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Control should not be seen therefore, only in the sense that it suggests close and 
constant supervision or as an organisational constraint on freedom of action by the 
individual. 
In terms of the open systems model of the organisation, control emphasises 
the interrelationships among inputs, outputs and the series of activities which lead to 
the outputs. Control can be seen as a mediator between the input and output 
processes. It helps to maintain the working of the organisational system. The 
organisation as an open system is subject to chanhes in its environment. The 
operation of management control systems will need, therefore, to be responsive to 
external influences. 
Whatever the nature of control there are five essential elements in a 
management control system (fig. 2) : planning what is desired; establishing standards 
of performance; monitoring actual performance; comparing actual achievement against 
the planned targer; rectifyng and taking corrective action.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fig. 2. The five essential stages of management control 
 
1. Planning  2. Establishing  3. Monitoring 
Objectives and 
targets 
Standards of 
performance 
Actual 
performance 
Measurement  Feedback 
4. Comparing 
Deviations 
5. Rectifying 
Corrective 
action    
 
 
                                  Studies in Business and Economics 
                   Studies in Business and Economics - 69 - 
  Planning what is desired involves clarification of the aims to be achieved. It is 
important that people understand exactly that objectives and targets are specified 
clearly, particularly key activities and given some measurable attribute. Planning 
provides the framework against which the process of control takes place. 
  Related to planning is the establishment of defined standards of performance 
against which the level of succes can be determined. This requires realistic 
measurements by which the degree and quality of goal achievement can be 
determined. Whenever possible these measurements should be stated in quantitative 
terms. Planning and measurement are prerequisires of control. Without them there can 
be no control. Objectives and targets, and standards of performance, should be stated 
clearly and communicated to those concerned, and to those who are subject to the 
operation of the control system. 
  The third aspect of control is the need for a means of monitoring actual 
performance. This requires feedback and a system of reporting information which is 
accurate, relevant and timely, and in a form that enables management to highlight 
deviations from the planned standard of performance. Feedback also provides the 
basis for decisions to adjust the control system, for example the need to revise the 
original plan. Feedback should relate to both the desired and results and the means 
designed to achieve them. 
  Next, i tis necessary to compare actual performance against planned targets. 
This requires a means of interpreting and evaluating information in order t ogive details 
of progress, reveal deviations, and identify probable causes. This information should 
be feedback to those concerned to let them know how well they are getting on. 
  The final element of a management control system is the taking of corrective 
action to rectify the situation which has led to the failure to achieve objectives or 
targets, or other forms of deviations identified. This requires consideration of what can 
be done to improve performance. It requires the authoriry to take appropiate action to 
correct the situation, to review the operation of the control system and to make any 
necessary adjustments to objectives and targets or to the standards or performance. 
  The study of control in organisations includes selection and training, 
socialisation processes, bureaucracy, formalisation and the measurement of outputs 
(Ouchi, W.G., Maguire, M.A. 1980). 
  Conclusions 
  Control is far-reaching, it can serve a number of functions and can be 
manifested in a number of different forms. Control systems can focus on the 
measurement of inputs, outputs, processes or the behaviour of people. Controls can 
be concerned with general results or with specific actions. Controls can be concerned 
with an evaluation of overall performance of the organisation as a whole or with major 
parts of it. This requires broadly based standards of performance and remedies for 
corrective action. Total quality control, concerned with all areas of the organisation, can 
be seen as part of Total Quality Management programes. Controls can be concerned 
with the measurement and performance of day-to-day operational activities. This calls 
for more specific standards of performance and speady corrective action.                                                                                                                             
 
 
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References: 
 
 Mullins,  L.J.  „Improving Management Control Systems”, Management Accounting, 
vol. 61, no. 5. May 1983, pp 30-2 
  Berry, A.L., Broadbent, J., Otley, D. „Management Control : Theories, Essues and 
Practices”, Macmillan (1995), p. 18 
 Tannenbaum,  A.S.,  „Control in Organizations”, Mc. Graw.Hill (1968), p. 3 
 Johnson,  P. „Management Control and Organizational Gill, J. Behaviour”, Paul 
Chapman (1993) 
 Mullins,  L.J.  „Management and Organisational Behaviour”, 5th edition, Prentice 
Hall, 1999, pp 770-774 
 Fayol,  H.  „General and Industrial Management”, Pitman (1949), p. 107 
 Blake,  R.R.  „The Managerial Grid III”, Gulf Publishing Monton, J.S. Company 
(1985) 
  Ouchi, W. G., Maguire, M.A. „Organizational Control : Two Functions”, in Litterer, 
J.A. „Organizations : Structure and Behaviour”, Third edition, Wiley (1980) 
 

Improving Management Control Systems”,

CONTROL – ESSENTIAL FACTOR OF ORGANISATIONAL PERFORMANCE

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CONTROL – ESSENTIAL FACTOR OF ORGANISATIONAL PERFORMANCE

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