The fourth component in management is control. By that, I don't mean physical control of anything; rather, I am referring to systems th
at will help you decide if the company is proceeding according to plan.
An example is in order. You will remember that the annual budget is in reality a short-term plan. As a manager, you will be able to control expenses, but there is nothing you can do about revenues. Your company is either selling its goods and services, or it isn't. If revenues fall below expectations, the manager must take action. Should he or she try to reduce expenses? Invest more in advertising to boost sales? Many alternatives must be considered.
The point is that company operations will never be precisely on target. There will always be plus or minus deviations from plans. As a manager, you must set upper and lower limits for these deviations. If they are too great, management action is required.
Another example of a control system appears in manufacturing. Machinery and mechanical processes are never perfect. There are plus and minus variations. Again, as with the budget, managers must set upper and lower ranges to define what is "acceptable" and within standards.
An interesting case involves quantities of processed food. Let's say that a bottle of ketchup is supposed to have 12 ounces of product inside, but the equipment fills the containers within a plus or minus 0.1 ounce range. That is, the bottles will be filled with anywhere from 12.1 to 11.9 ounces of product, even though the equipment is set for 12.0 ounces. Should the manager take action? What would YOU do?
To understand control systems, think of the cruise control device on your automobile. You set it for a particular speed, but it still varies slightly, particularly if you are going up and down hills. You can also think of the thermostat in your home as a control device.
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