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1.5.2 Organising 1
CH. 8 : LEADERSHIP & COMMUNICATION
8
CHAPTER
Leadership & Communication
8.1
CHAPTER OUTLINE
After studying this chapter the students will be well versed with the concepts of
u Meaning, nature
and concept of
Communication
u Barriers to
communication
u Methods to minimize
barriers
u New Trends and
Directions in communication
u Techniques of
Controlling
u Relationship
between Planning and Controlling 8.1 Communication
The word Communication is derived from Latin word ‘COMMUNIS’ which means COMMON in English. Communication is imperative to organizations as it helps the management to convey business plans and coordinate actions to attain objectives. It is a process in which one person expresses the ideas, emotions, thoughts to another. In other words, it assists interaction among people and enables one person to share the information to another. Effective communication is a precondition for executing managerial policies, as well as for controlling everyday activities, through human resources. Managerial staff focuses on communicating the information more effectively, so that goals can be easily attained. Managers who are good communicators, are likely to influence others towards common goals.
8.1.1 Definition of Communication
Let us now consider some definitions to understand what communication is: (i) According to Cambridge Dictionary “Communication means to share information with others by speaking, writing, moving your body, or using other signals”. (ii) According to Newstrom & Keith Davis “Communication is the transfer of information form one person to another. It is a way of reaching others by transmitting ideas, feelings, thoughts, facts and values”.
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(iii) According to Theo Haiman “Communication means the process of passing information and understanding from one person to another”. (iv) According to Koontz and Weihrich “Communication is the transfer of information from a sender to a receiver, with the information being understood by the receiver”. (v) According to Keith Davis “Communication is a process of passing information and understanding from one person to another”.
8.1.2 Characteristics of Communication
From the above definitions, features of communication that can be drawn, which are as follows: (i) Interaction among two or more persons: In communication process, it is essential that there should be presence of at least two persons as no individual can transfer ideas to oneself. (ii) Exchange of Thoughts: Communication takes place when some information is passed from one person to another. The process is said to be completed when one person exchanges his/her thoughts/ideas to another. (iii) Common Understanding: It is very crucial that the receiver should comprehend the message in the same sense in which it is being conveyed. Otherwise it would result in miscommunication. (iv) Objective of Communication: The main purpose of the transmitting information is to make receiver understand the message and respond accordingly. (v) Dynamic Process: It is not a onetime rather evolving process. It keeps on changing according to the nature and purpose of message. (vi) Social Process: It is very important process for the survival of the human being. It is not possible to live in isolation or without interacting with others. (vii) Continuous Process: It is an ongoing process. In every field of business, communication is constantly required to maintain professional and personal relationships, so that business goals can be attained. (viii) Pervasive in nature: It is present in all types of organization. Without communication, no organization can execute its policies. It is inevitable in nature. (ix) It can be direct or indirect: Communication can happen directly when sender and receiver are interacting face to face. It can also take place
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indirectly through other means, when sender and receiver are not present at a common place. (x) Oral, written or symbolic: It is a process which can take place either in verbal, written or symbolic form.
The following are the benefits of incorporating effective communication in the organization: (i) Creates Relationships - Communication helps individuals to develop encouraging and constructive relationships with peers, through effective communication. (ii) Assists Innovation - It provides an environment to the employees to express their ideas, thoughts, and imaginations freely. It results in cultivation of innovative background, where employees can share their potential ideas. (iii) Constructs efficient Team - The organizations, that promote open communication result in creation of constructive teams. Open communication environment encourages employees to work towards common goals. (iv) Disseminates Information - It helps the managers to keep employees well informed about their roles and duties. This also facilitates managers to get feedback from employees, leading to productive relationships within the organization. (v) Facilitates Decision Making - Communication helps in gathering information and data that facilitates decision making process. It provides necessary information to make decisions. (vi) Motivates Employees - Open communication environment builds confidence among employees and helps in removing misunderstandings and conflicts among employees. (vii) Action Oriented - It provides basis for taking action. It supplies information which is essential for making plans and taking actions. (viii) Contributes towards Organizational Success - Absence of proper communication in the organization hampers its growth and success.
8.1.4 Classification of Communication
In every organization, there are broadly two types of communication. The classification is done on the basis of channels of communication. The path through which information flows from one source to another is known as
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channel of communication. Communication can be of two types namely, Formal Communication and Informal Communication. (i) Formal Communication - Formal communication implies official exchange of information. The course of communication is an intentional exercise. This results in easy flow of information to the end user without any obstruction. It involves flow of information through appropriate communication channel. The following are the types of formal communication: u Verbal Communication - Verbal Communication is a type of oral communication wherein the message is transmitted through the spoken words. Here the sender gives words to his feelings, thoughts, ideas and opinions and expresses them in the form of speeches, discussions, presentations, and conversations. u Nonverbal Communication - Nonverbal Communication (NVC) is the transmission of messages or signals through a nonverbal platform such as eye contact, facial expressions, gestures, posture, and body language. (ii) Informal Communication - Informal communication is casual communication between coworkers in the workplace. It is unofficial in nature and is based in the informal, social relationships that are formed in a workplace outside of the normal hierarchy of business structure. The informal communications are based on the personal or informal relations such as friends, peers, family, club members, etc. and thus is free from the organizational conventional rules and other formalities. In the business context, the informal communication is called as a “grapevine” as it is difficult to define the beginning and end of the communication.
8.1.4.1 The Process of Communication
The process of communication is dynamic in nature as it starts with the conceptualization of ideas, thoughts by the sender who transfers the message to the recipient and the recipient provides the feedback to the sender within specified time period. The process is said to be completed when the receiver understands and interprets the message correctly. In the communication process, two or more persons are included and there are some steps that take place in order to ensure an effective and meaningful communication. Following steps are taken in order to complete the process of communication.
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(i) Sender: The first and foremost step in communication process begins with the person, who wants to transfer some ideas, thoughts, information or emotion, to some other person. Sender is the communicator of the message. Sender generates and develops ideas and then encodes those ideas for transmission towards the recipient. The subject matter of communication, such as ideas, opinions, suggestions etc., needs to be converted into some tangible form. For that purpose, encoding is done by converting ideas into verbal or non-verbal forms like pictures, words, sentences etc.
Noise Process of Communication
• Develops • Sends
Message Idea
Sender Transm
ission • l Receives Receives l Message Message • Common •l Decodes Decodes
Medium •l Sends Sends • Encodin ng •l Feedback Feedback
Receiver
Feedback
Figure : Process of Communication
(ii) Transmission of Message - The second step involves transfer of message from communicator to the recipient, known as the Receiver. Message can be transmitted by various formal or informal channels, such as telephone, telegraph, email, SMS, video calling etc. It passes on the information from sender to receiver and thus acts as a connector between both the parties. (iii) Receiver - In the next step, message reaches to the recipient who is generally the receiver of the message and to whom information is intended to be passed on. Once the message is received, he/she makes efforts to decode the information. During decoding process, receiver tries to translate the symbols decrypted by the communicator and interprets the meaningfulness of the message. The receiver should understand the message in the same spirit, that is intended by the sender. After
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understanding of the message, receiver can accept or reject the message and can use the information for further actions. (iv) Feedback - It is the last step, but it is the essence of communication process. It is given by the recipient to the communicator, conveying that the message is properly decoded, understood and interpreted. It provides an insight to the sender about the effectiveness of the communication process. Communication is a two way process but sometimes there are some disturbances during the process in the form of Noise.
8.1.4.2 Barriers to Communication
There are various impediments to communication, which can occur at any point during communication process. The barriers could be due to semantics, organizational or personal reasons. Some of the most experienced barriers are being explained, briefly below:
Personal Barriers Semantic Barriers
Organizationa Organizational l Barriers Barriers
Communication Barriers
Other Barriers
Figure : Communication Barriers
(i) Organizational Barriers - There are some barriers, which take place within the company. These occur in the form of the following:
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Complex Organizational Policies:
There are some policies, which are very difficult to understand and interpret. These may result in delay in completion of work. Inadequate Facilities: For transmitting the message, different facilities required are internet, telephone connectivity, paper, and pen. Non accessibility results in delay of message transmission. Poor Communication Policy: Organizations lacking in free communication policy, face bad social culture where employees hesitate to communicate.
Complex and Complicated levels
of Management: The organizations having complex hierarchy, result in delayed communication and message distortion.
(ii) Personal Barriers: There are some barriers that take place within an individual. These occur in the form of the following:
Emotional Disturbance: Emotional imbalance, such as hostility, fear, anger can covey wrong meanings to the message. Personality Differences: Each person has unique personality. Sometimes seniors have superiority complex, which prevents them from engaging in communication with them. Apprehension: Apprehension about knowing little, may also create barrier in communication.
Low Confidence: Low level employees opinions and suggestions are ignored by the management as result employees feel low in confidence
Absence of Mind: Inattention during communication process creates hindrance in conveying the correct message. Sometimes people are lost somewhere or preoccupied, during conversation due to illness, stress, family issues etc.
(iii) Semantic Barriers: There are some barriers that take place due to complexity of language. These occur in the form of the following:
Usage of ambiguous words: Ambiguous sentences and words give different meaning to the communication. It leads to ineffectiveness in the communication process. Usage of Technical Phrases: It sometimes becomes difficult for the receiver to comprehend the message, if technical words and phrases are used.
(iv) Other Barriers
Usage of different language: When sender sends the message in a language which is not understood by the receiver then it leads to create a barrier in the communication Wrongly Articulated Message: This barrier occurs due to badly expressed message, like wrong words and repetitiveness
Perceptual Barrier - Different perception of things by different people. Inattention - Not paying desired attention also hampers communication.
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Personal Weakness - Sometimes sheer distrust and fear may prevent effective communication. Narrow/Closed Mind - Receiver may be resistant to not accept message or accept partially due to rigidity of mind.
Semantic Problems - All languages have an in built semantic problem, as words used may have more than one meaning. Phonetic Barrier-This barrier is related to how words may sound, different, when spoken fast or heard from a distance.
Resistance to Communicate - The receiver may not be willing to communicate.
Insensitive Listening - Selective listening or multi-tasking while the sender is sending message, also becomes a barrier in communication. Structural Bottle necks: Too many intermediaries serve as a barrier in Organization Structure Premature Evaluation – It means jumping to conclusion, even before the other person has finished communication.
Differential Assumptions- When Sender takes certain assumption & does not share with the receiver, result in confusion. Wrong Channel of Communication- Selection of wrong media, time pressure disturbance in line etc.
8.1.4.3 Ways to minimize Communication Barriers
There are some techniques to overcome abovementioned communication barriers, however, these can be minimized only, but cannot be removed completely, by following measures: (i) It is very essential to maintain clarity in thoughts. Systematic and clear thoughts help in conveying the message correctly. (ii) It is required to create conducive environment that builds conviction and assurance among the parties. (iii) There should be proper coordination between speech and gestures. Otherwise it sometimes misleads the recipient. (iv) Usage of lucid and clear language is always appreciable. (v) Transmission of message should be in a language that is well understood by the recipient. (vi) Organizations should form policies which encourage all levels of employees to communicate and express their thoughts, ideas, and feelings. (vii) It always advisable to remain active and attentive during communication, which means that effective listening should be adopted. (viii) Overloading of information should be avoided, as it may become difficult for the receiver to filter the information.
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(ix) Communicate should be made in a noiseless environment. (x) Organizations should follow the format of short communication chains, as it helps in maintaining clarity and there are no chances of distortion of information. (xi) Organizations should ensure availability and accessibility of all the facilities that are needed for transmission of message. (xii) It is important to control emotions, during communicating the message. (xiii) Feedback must be ensured, as it plays an indispensable role in an effective communication. (xiv) Sender should be clear or intent, content and context of communication. (xv) Safeguards should be built in communication system to prevent transfer of conflicting and confusing information. (xvi) Channel should be straight forward and short to minimize distortion and delay. (xvii) Message and common medium should matched with messages. (xviii) Internal environment of trust, goodwill, understanding and transparency should be built. (xix) All operational units should be efficiently connected with communication channels. (xx) Encourage upward communication. (xxi) Patient and effective listening should be adopted by the manager. (xxii) Encourage participative process. (xxiii) Communication system should be flexible. (xxiv) Strong MIS should be introduced to make communication effective. (xxv) Long and complex messages must be in writing to avoid distortions, (xxvi) Caution should be exercised while communicating with semi-literates/ non-professional/persons working at lower level.
8.2 New Trends and Directions in Communication (Role of IT and Social Media)
There has been a revolution in the world of communication world over and in India, particularly, after the Government emphasized on the importance of digital communication. Also after the Covid-19 pandemic, the need for digital communication grew and new possibilities were explored. Since then, every single minute, there is an effort, somewhere, in the world to find new and better
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ways to achieve more efficient communication. Trends in communication seem to be moving so fast that it can be hard to keep up pace with them. Times are changing and the way we communicate in business has rapidly developed too. From telephones to cellular phones, and now the Internet, we are now more connected than ever before. The digital revolution has significantly changed business communication dimensions. The latest tools in online communications, help the business to move towards a future, where businesses have all the resources needed to provide their teams exchange of ideas, information, and input even, without having physical offices. For this, teams are encouraged to communicate more, as communication processes has become more seamless. And, teams which communicate more, are more likely to collaborate well and finish their assignments in the required quality and time frames. Following are some new tools and techniques being used to enhance digital communication. (i) Faceless, Paperless & Cashless Operations - By the year 2024, the idea is to go fully faceless, cashless and paperless. Many researchers have called it a death of paper in the near future. The paperless future promised decades ago, has made substantial progress over the past two years, mainly due to the pandemic. A host of “no-contact” protocols and technologies have suddenly become familiar. From Omni channel, contactless delivery and curbside pickup, to QSR codes, Apple Pay, and workflow software, the momentum has swung irrevocably away from paper. (ii) Smart Documents - Smart documents also known as intelligent documents. These are files programmed with functions, which help the user to carry out work tasks. For example, Microsoft Office programs such as Word and Excel can be programmed with smart document solutions such as formulas and templates to speed up work solutions. (iii) Complete Automation - Most Communication is being made online. Even the meetings and conferences are mostly on the video conferencing mode or dual mode. Many offices have gone ‘Paper Less’ in the recent times, by boasting of being completely automated.. (iv) Artificial Intelligence - AI is shaping customer Service in a big way, in the recent times. AI is the ability of a digital computer or computercontrolled robot to perform tasks commonly associated with intelligent beings. The term is frequently applied to the project of developing systems endowed with the intellectual processes characteristic of humans, such as the ability to reason, discover meaning, generalize, or learn from past experience. (v) Omni Channel Communication - Omni channel is a multichannel approach to sales that seeks to provide customers with a seamless
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shopping experience, whether they are shopping online from a desktop or mobile device, by telephone, or in a brick-and-mortar store. It is an approach that brings about integration between distribution, promotion and communication channels on the back end. (vi) Augmented Reality - Augmented reality (AR) is the real-time use of information in the form of text, graphics, audio and other virtual enhancements integrated with real-world objects. It is this “real world” element that differentiates AR from virtual reality. AR integrates and adds value to the user’s interaction with the real world, versus a simulation. Customers are given a real feel with Augmented Reality. (vii) Virtual Reality - VR is not used just for video games anymore. It is the use of computer technology to create a simulated environment. Its most immediately-recognizable component is the head-mounted display (HMD). Human beings are visual creatures, and display technology is often the single biggest difference between immersive Virtual Reality systems and traditional user interfaces. Major players in Virtual Reality include HTC Vive, Oculus Rift and PlayStation VR (PSVR) (viii) Immersive Virtual Reality - This is the technology, which provides almost real and/or believable experience in a synthetic or virtual way. The goal of Immersive VR is to completely immerse the user inside the computer generated world, giving the impression to the user that he/ she has “stepped inside” the synthetic world. This can be achieved by using either the technologies of Head-Mounted Display (HMD) or multiple projections. (ix) Blended Communication Channels - Blended communication leverages both. Press releases should be used to announce major news. They represent a point in time when a deal is reached, a product is launched or an appointment is made. However, companies can abuse them to disclose information with little or no news value (x) Live streaming - Live streaming is when the streamed video is sent over the Internet in real time, without first being recorded and stored. Today, TV broadcasts, video game streams, and social media video can all be live-streamed. This technology is being used in a big way also. (xi) Video Conferences - Video conferencing is a technology that allows users in different locations to hold real-time face-to-face meetings, often at little to no cost. There are many ways to utilize video conferencing technology, such as company meetings, job training sessions, or addressing board members. (xii) Cloud Storage Solutions - Cloud storage is a cloud computing model, which stores data on the Internet through a cloud computing provider,
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who manages and operates data storage as a service. It is delivered on demand with just-in-time capacity and costs, and eliminates buying and managing one’s own data storage infrastructure. (xiii) Mobile Solutions - Businesses all over the world are constantly introducing the latest innovations and trends in their work patterns. A mobile app development solution is a recent innovation, which can transform a business tremendously. Mobile solutions refer to the online services that are made available to users while they are on the go. This technology has not only traversed geographical boundaries but has also accessed various domains. (xiv) Digi-Locker - People found it difficult to keep important documents safe and be able to present them anywhere. Targeted at the idea of paperless governance, Digi Locker is a platform for issuance and verification of documents & certificates in a digital way, thus eliminating the use of physical documents. (xv) Work chat apps - Team chat apps enable team members to engage, both on a personal and professional level. This is particularly important for remote teams without any other means of interaction. However, it is also beneficial for office teams to have another medium for engaging with their teammates. (xvi) Google Chat - Google Chat is a communication service developed by Google. Initially designed for teams and business environments, it has since been made available for general consumers. It provides direct message, group conversations, and spaces, which allow users to create and assign tasks and share files in a central place in addition to chatting. It can be accessed through its own website and app or through the Gmail website and app. (xvii) Pumble - Pumble is a free team chat app that allows teams of all sizes to collaborate. Unlike other team chat apps, it offers, Unlimited users, Unlimited chat history, User and workspace administration tools, 24/7 web support (xviii) Slack - Slack is a messaging app for business that connects people to the information that they need. By bringing people together to work as one unified team, Slack transforms the way that organizations communicate (xix) Track Finances - It is an expense tracker app, which allows the user to monitor and categorize expenses across different banks and investment accounts and credit cards (xx) Making Notes, Recording calls, Sharing files & Signing Documents- Computing, now allows the user to create notes, record calls, and share
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files with multiple users simultaneously and also sign documents without having to pay for the digital signatures.
8.2.1 Barriers to Digital Communication
Digital communication is expected to make communication between people easier, faster and better, but despite its conveniences, significant barriers to effective digital communication exist, both internally between coworkers and externally with the outside people organization interacts with. Following are some of the commonly experienced barriers: (i) Accessibility barriers - Digital communication is effective only when people of all abilities can access and understand information. (ii) Semantic barriers - Semantic barriers are about the different interpretations of words and symbols used to communicate. This ambiguity is especially strong in digital communications, where trending hashtags, fast-flying memes and emojis can convey complex and evolving ideas. (iii) Physical barriers - These barriers present different challenges for offline versus online communication. Physical barriers to digital communication include other environmental conditions like time, place and medium. (iv) Emotional barriers - Emotional or psychological barriers are perhaps the most common barriers to communication, digital or otherwise, because individual’s beliefs, attitudes and values have a strong influence on how they process information. (v) Identity barriers - These barriers include gender, racial, ethnic, sexual orientation, class, age, disability, or other personal, social or cultural identities. (vi) Credibility barriers - Credibility barriers interfere with digital communications, when people are not able to trust the message, the messenger, or both.
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(vii) Attention barriers - People may be confused, if too many details or options are given to them. Attention barriers also occur when people miss out on what was communicated, as they were distracted and their full focus was not there.
8.2.2 Cyber Security Risks and Mode of Prevention
The digital world has revolutionized in the recent past, particularly after the Covid-19, pandemic and so have the security risks. There have been increasing number of cyber-crimes, on a daily basis. India, being a recent and big user of the digital technology, with huge population base, the threats have multiplied also. Following are some of the risks associated with digital communication: (i) Password Theft - New to digital space, the users keep very obvious and common passwords, which are hacked by unethical persons and cause havoc for the user. Worse for an individual and an enterprise, lose sensitive data, due to hacking.
(ii) Malware - It is the most prolific and common form of security threat.
Malware is when an unwanted piece of programming or software installs itself on a target system, causing unusual behaviour. This ranges from denying access to programs, deleting files, stealing information, and spreading itself to other systems.
(iii) Ransomware - A nasty variant of malware, ransomware, installs itself on a user system or network. Once installed, it prevents access to functionalities, in part or whole, until a “ransom” is paid to third parties.
(iv) Phishing Attacks - Phishing scams are an older attack method and rely on social engineering to achieve its goal. Under this, an end user receives a message or email, which requests sensitive data, such as a password.
Sometimes, the phishing message appears official, using legitimate appearing addresses and media. This compels an individual to click on links and accidentally give away sensitive information.
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(v) Social Engineering - Similar to phishing, social engineering is the umbrella method for attempting to deceive users into giving away sensitive details. This can occur on any platform, and malicious parties will often go to great lengths to accomplish their goals, such as utilizing social-media info.
(vi) Traffic Interception - It is also known as “eavesdropping,” or traffic interception. It occurs when a third-party listen to information sent between a user and host, and steals information, based on traffic but it is often used to take log-ins or valuable data.
(vii) Distributed Denial of Service - DdoS is an attack method in which malicious parties target servers an overload them with user traffic. When a server cannot handle incoming requests, the website it hosts shuts down or slows to unusable performance.
(viii) Cross Site Attack - It is also called as an XSS attack. In this instance, a third-party targets a vulnerable website, one lacking encryption. Once targeted the dangerous code loads onto the site. The goal is to either disrupt standard services or steal user information.
(ix) Man-in-the-Middle - MitM attack occurs when a third-party hijacks a session between client and host. The hacker generally cloaks itself with
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a spoofed IP address, disconnects the client, and requests information from the client.
(x) Cryptojacking - Cryptojacking is an attempt to install malware which forces the infected system to perform “crypto-mining,” a popular form of gaining crypto-currency. It is deployed because the act of crypto-mining is hardware intensive.
(xi) Water Hole Attack
Water hole attacks occur when a group infects websites a particular organization frequently uses. The goal is to load a malicious payload from the infected sites.
(xii) Drive-By Attack
In a drive-by-attack, malicious code is delivered onto a system or device. The distinction, however, is that no action is needed on the user end, where they need to click a link or download an executable.
(xiii) Trojan Virus - Trojan malware attempts to deliver its payload by disguising itself as legitimate software. One technique used was an “alert” a user’s system was compromised by malware, recommending a scan, whereby the scan actually delivered the malware.
8.3 Controlling
While discussing the Functions of Management, in first chapter, Controlling has been explained. The remaining dimensions are being discussed here in this chapter. As explained earlier, controlling function in management, directs the organization toward attaining its goals over the long term. Important dimensions of controlling are:
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Maintaining control is not a one-time endeavor; it requires regular evaluation and revision of performance criteria. Controlling is focused on accomplishing organizational goals or specific strategies. Controlling necessitate adaptable controls to changing conditions. Dynamic processes such as Strategic, tactical, and operational control can be found at the highest levels of management and in the organization’s middle and lowest levels.
8.3.1 Steps in Controlling Function
Steps in Controlling Function include establishing standards, measuring performance, comparing actual performance with standard performance and finally taking remedial measures.
Establish Standards
Measure Performance Compare actual with standard performance The remedial Actions
Figure : Steps in Controlling Function
(i) Establishment of Standards- Standards are the targets required to be achieved. Controlling becomes easy through establishment of these standards because controlling is exercised on the basis of these standards.
They are the criterions for judging the performance. Standards generally are classified as u Measurable or Tangible Standards - Those standards which can be measured and expressed are called as measurable standards, such as cost, output, expenditure, time, profit, etc. u Non-Measurable or Intangible Standards - These cannot be measured monetarily, such as performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards. (ii) Measurement of Performance- Deviations are found out by comparing standard performance with the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc. Performance of a manager cannot be measured in quantities.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports. It can be measured only by their-
Attitude Morale to work
Response towards physical environment Communication with the superiors.
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(iii) Comparison of Actual with Standard Performance - By comparing the actual with standard, deviations are identified. Manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. The managers have to exercise control by exception. (iv) Taking Remedial Actions - Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives as follows:
Taking corrective measures for deviations which have occurred In the end, if the actual performance is not in conformity with plans, the targets are revised.
8.3.2 Types of Control
Feedback Control Steering Control Yes/No Control Feed Forward Control
Figure : Types of Control
(i) Post-Action-Control/Feedback Control - This process involves collecting information about a finished task, assessing that information and improvising the same type of tasks in the future. The results of the completed activity are compared with pre-determined standards and if there are any deviations, corrective action can be taken for future activities. For example, a restaurant manager may ask the customer about the quality and taste of food ordered by him/her and take suggestions to improve the meals. (ii) Concurrent Control - It is also called real-time control. It checks any problem and examines it to take action, before any loss is incurred. (iii) Steering Control - The key feature of this control is the capability to take corrective action, when the deviation has already taken place, but the task has not been completed. The big advantage of steering control is that corrective actions can be taken early. (iv) Yes/No Control - This control is designed to check at each check point, whether the allow activity to proceed further or not. These controls are necessary and useful where a product passes sequentially from one point to another, with improvements added at each step along the way. These controls stop errors from being compounded. Safety checks and legal approvals of contracts, prior to approval are examples of yes/no controls.
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(v) Predictive/ Feed Forward Control - This type of control helps to foresee problem ahead of occurrence. Therefore, action can be taken before such a circumstance arises.
In an ever-changing and complex environment, controlling forms an integral part of the organization.
8.4 Techniques of Controlling
Techniques of control are being used by managers since long and there are two categories of controlling namely the traditional techniques and the modern techniques.
Traditional Techniques
• Personal
Observation • Budgeting • Break-Even
Analysis • Financial
Statements • Statistical
Control
• Self-Control
Modern Techniques
• MIS • Management
Audit
• Responsibility
Accounting • PERT and
CPM
• Balanced Score
Card
• Ratio Analysis • EVA
Figure : Techniques of Controlling
8.4.1 Traditional Techniques
Some of the traditional techniques are being explained briefly below: 8.4.1.1 Personal Observation or Direct Supervision & Observation - It is the oldest traditional method available to perform the controlling function. In simple words, it can be understood as On-the-Spot or Direct Observation control. Direct observation pressurizes the employees and motivates them to work with maximum efficiency. In this, the manager personally observes the employees and workers, at the workplace.
Merits
Very good for Small, medium-sized and non-profit organizations. Very unsuitable for large-sized, profit-making organizations.
Demerits
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Merits Demerits
It creates psychological pressure on the employees and they perform better.
It enables the Managers to know the employee problems at the work place and they try to overcome these problems.
This method can also demotivate some of the employees, who do not like to work under psychological pressure. It may not be possible for all managers to personally observe all employees, due to their personal work pressure. 8.4.1.2 Budgeting or Budgetary Control - Budgetary Control is the process of utilizing budgets for comparing the actual performance with the corresponding budget performance in order to find out the deviations, and to remove the deviations by either adjusting the budget estimates or correcting the causes of deviations. A budget is a highly useful tool for controlling the day-to-day operations of the enterprise. It provides a standard by which, actual performance can be evaluated to find out the deviations from the planned results. This information enables the managers to take corrective action for bringing the actual results in conformity with the plans. Budgetary control is an effective and widely used control technique.
(a) Objectives of Budgetary Control
(i) To formulate a plan or fix a target of performance that becomes the basis of measuring the progress of activities in the organization. (ii) To evaluate the results of the activities in terms of quantity so that the actual result can be compared with the budgeted result. (iii) To draw attention of the managers on deviation between what is planned and what is being achieved. (iv) To remove the deviation and to implement the objectives of the activities.
(b) Merits and Demerits of Budgetary Control
Merits
Budgetary control leads to maximum utilization of resources, which leads to maximum output. It provides aid to managerial planning, co-ordination and control
Budgetary control compels the managers to plan their activities. It is fully concerned with concrete numerical goals, without ambiguity, which relate to the targets.
Demerits
Budgetary control faces problems due to uncertainty of future.
Budgets are prepared on the assumptions of future happenings, which are uncertain. A budget is just a guesswork.
Due to change in situations, budgets become meaningless and unreliable for achieving control.
TAXMANN®
Business Organisation & Management
B.Com. | UGCF
AUTHOR
: ABHA MATHUR PUBLISHER : TAXMANN DATE OF PUBLICATION : NOVEMBER 2022 EDITION : 2022 EDITION ISBN NO : 9789356224322 NO. OF PAGES : 376 BINDING TYPE : PAPERBACK
Rs. 395 | USD 34
Description
The book gives fundamental clarity on the following: u Evolution of Management u Apprehend its Effect on Future Managers u How Organisations Adapt to Uncertain Environments u Decipher Decision Making Techniques This book helps the reader in getting an insight into the entrepreneurship aspects. This book aims to fulfil the requirement of students of undergraduate courses in commerce and management, particularly the following: u Paper BC-DSC – 1.1 | Semester – I | Core Based on Undergraduate Curriculum
Framework (UGCF) for the University of Delhi u Non-Collegiate Women’s Education Board (NCWEB) u School of Open Learning (SOL) of the University of Delhi u Various Universities throughout India This book will also be helpful to any aspiring & budding Manager or Entrepreneur.
