This article throws light upon the three key benefits of exercising control in an organisation. The benefits are: 1. Changing Circumstances 2. Compounding of Errors 3. Organisational Complexity.
Benefit # 1. Changing Circumstances:
In today’s highly complex and turbulent environment, all business organisations must find ways of coping with change.
If managers could set goals and achieve them in no time, there would hardly be any need for control. But between the time when a goal is established and the time when it is reached, various things may happen in the organisation and its environment to disrupt movement towards the goal — or even to change the goal itself.
As R.W. Griffin has rightly commented:
“A properly designed control system can help managers anticipate, monitor and respond to changing circumstances. In general, the longer the time horizon of organisational goals, the more important is to have adequate control. The monitoring of information and formulating responses to that information are both a part of the control function”.
Benefit # 2. Compounding of Errors:
The second important reason underlying managerial control is the process of error compounding. In most cases, the health of an organisation is not damaged by small mistakes and errors. However, if left uncontrolled, small errors may accumulate and become very serious with the passage of time. Control can help managers rectify errors and correct deviations from goals before they compound.
Benefit # 3. Organisational Complexity:
Another reason for control is the complexity of modern organisations. For a firm producing only one product by using only one raw material and having a simple production process and enjoying constant demand for its product, its manager can probably maintain control easily and quickly.
But, in a complex organisation that produces a large number of products from various raw materials, has a large market area and a complicated organisation structure and operates in a competitive environment, it is difficult, if not impossible, to maintain adequate control without any elaborate control system.