Elements of Control

Basic Elements of Control

Lori Green BMGT 1111 WEB 44655

Control can be described as power used to influence or direct people's behavior or the course of events. Control can be used to adapt to environmental changes, limit errors, cope with organizational complexity, or to minimize costs. All of which enhance a company’s profits or reputation in some way.

Basically there are four areas of control within a company; physical, human, information and financial. These controls work together to provide a stable table foundation for a working atmosphere. Physical inventory must be gathered to ensure that not too much or too little product is available. Human resources are there to ensure the right people are in the right job earning the right compensation. Information controls allow a group to forecast or predict economic conditions in order to be prepared for future sales. The financial area of control is in place to ensure that the bills are paid and/ or collected to keep a positive cash flow to keep the company in business.

A controller may be put in place to help manage any of these areas. This person would be there to help managers by gathering information a manager can use to make decisions in their area of control. Gathering information will help a manager to establish standards for comparison, measure performance, compare performance with standards, and take corrective action if necessary.

The types of control vary based on levels, areas and responsibilities. Different levels include operations, financial, structural and strategic. Each level has its own importance and is just as necessary as the other levels. For instance, a manager may have 3 of the 4 levels in control, but the fourth is somehow out of “whack”. If the financial control is lost, resources will not be available for long to assist in the other controls.

Operations control focuses on the process the organization uses to transform resources into products or services....