Tag: Stakeholder Management

Control

The last but not the least significant phase is control of sales force operations. In any sphere of activity, supervision and control of salesmen is essential with a view to achieve the maximum success. The sales operations are to be materialized as per plans laid down, followed by scientific control of efforts and resources. A plan is necessary when you construct a building. In the same way, in business also a chalked out plan is a sine-qua-non and the plan to be under a successful control is essential.

What is control? It simply means a check, a means of controlling or testing. Control involves such functions as checking, verifying, standard selling, and directing or guiding. One may say, “Control means watching results and translating them into positive action.” Control is a process to establish the standard of performance measuring the work done. Through control salesman’s performance can be appraised.

All the organisations must have the operation of control, as a tool, for their progress and successful working. It is an act of checking or verifying the performance as per the plans. “Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and the principles established. Its objective is to point out weaknesses and errors in order to rectify them and prevent their recurrence. It operates on every thing-things, people and actions.”

Is Control Necessary?

The manager exercises the control over the activities of salesmen through supervision. The planned sales operations are to be carried out systematically in order to get success over the aimed result.

Salesmen are human beings; the need for supervision arises because of:

• Salesmen may be working independently and may be at a longer distance from the sales manager. There may arise a problem of co-ordination, of salesmen’s effort with the other sales efforts i.e., publicity, sales promotions etc. To ensure co-ordination, control is a must.
• The sales effected by each salesman should be known to the sales manager, who compares the actuals with the targets, to find negative variation, which should be rectified by corrective actions. There may be mistakes in the approach of a salesman, laziness in activities etc.,. These must be traced out and the salesman guided in order to channelize his efforts into desired path.
• Efforts of the salesman have to be directed to maximize profits to firm in the light of progressive ideas and techniques to ensure the proper utilization of men and materials.
• “Of all the assets customers are the most valuable.” To build a sound public relation, complaints of different types of customers are to be redressed. Thereby, it is possible to build a good image in the minds of the public. The salesman is guided by the sales manager, who tries to satisfy the customers through salesmen.

Prerequisites of Control

• The sales manager should know what exactly he expects a salesman to do. (through fixing the sales quota).
• Salesman should be given an idea of what he is expected to do. (through training).
• Sales manager should know that the salesman is doing exactly what he is expected to do. (through reports).
• Salesman should be made to know that the sales manager knows what he does, (through personal talk and reports).
• Salesman should know that the sales manager appreciates what he does, (through reports).

Elements Involved in Control

The following steps are involved in the process of control:

1. Analysis of Performance

All controls involve the setting of a standard and the measurement of performance against their standard. The performances are analysed and compared with reference to the objectives, budgets and standards. This will reveal the variances between the performance and the standard.

2. Analysis of Variance

After finding out the variance, the first question is whether this variance is significant. If the variance is significant, the next question is usually, “What went wrong with the performance?” and possibly a better question will be “What is wrong with the standard?” Effective sales control should reveal poor execution of sales policies or indicate when sales policies need changing.

Sales Control may not, however, disclose the reasons for poor execution. For instance, poor execution may be due to ignorance of sales policies, inability to perform the tasks, resentment, discontent etc. The significant variances are considered carefully to enable the authority to take corrective steps.

3. Measures to Deal with Unfavorable Variance

The function of control is to identify the weakness and errors in the sales efforts. Reasons and causes are found out and their remedial measures are formulated in order to correct the weakness and errors in a speedy manner. These enable the sales manager to guide the individual salesman when necessary. All these are done in order to improve the sales programme performance.

Methods of Control

Control is essential in order to secure optimum performance from salesmen. Sales managers effect controls, by common methods, through personal contacts, correspondence and report.

1. Personal Contact

Personal contacts are more effective than other methods. Sales manager himself or through branch managers or field supervisors, exercises controls over the salesmen. Salesmen can be assisted and inspired, and corrective steps can be taken.

2. Correspondence

This method is commonly accepted and is economical. Through correspondence, instructions are passed on to the salesmen and replies received from the salesmen. The salesmen are supervised or controlled through letters.

3. Report

They are not in the form of letters. Printed report forms are used by the salesmen to make reports to the sales manager. In certain cases, the report may be oral.

Bases of Control

The control of salesman is based on:

• Reports and Records
• Sales Territories and Sales Quotas
• Determination of salesman’s authority
• Field Supervision and
• Remuneration Plans.

Importance of Supervision and Control in a Sales Organization

In an organization, the success of planning largely depends on the efficient supervision and control of the sales force. It is an important aspect of the management of the sales force.

In fact, the activities of the salesmen have to be supervised and controlled to ensure that the job is done properly and efforts are being made towards the achievement of the sales objectives. Supervision and control of salesmen is essential for the sales organization to achieve maximum success.

An organization may have a talented and efficient sales force with adequate training and the compensation plan may be attractive, but unless the activities of the sales force are properly supervised and controlled, it is hardly possible for the organization to achieve the sales targets.

Therefore, an effective method of supervision, direction and control of the sales force is extremely important in order to secure the most productive and economical performance from them. The establishment of sales territories and sales quotas are the specific control devices by which the sales manager exercises control on the salesmen.

Control is the process of trying to achieve conformity between goals and actions. Controlling is an act of checking and verifying an act to know whether everything is taking place in accordance with the predetermined plan. In other words, control covers the direction and guidance towards securing desired objectives.

To M.C. Niles, ‘controlling is maintaining of a balance in activities directed towards a goal or a set of goals.’ Therefore, control consists of the steps taken to ensure that the performance of the organisation conforms to the plans. The process of control consists of a few steps, namely

• Establishing standards or measures for performance,
• Measuring and recording of actual performance
• Comparing actual with the planned measures to find out the deviations
• Taking corrective measures, if needed. Thus, control is one of the important ingredients for the success of the sales department.

Reports and Records

Report

Every sales manager needs accurate and up-to-date information, on the basis of which he formulates policies for future business. Formulation of policies may not be practical in the absence of information. For the growing needs of the organization, expanding the professions, widening activities of the business etc., it has become essential to look for the information.

A report is a presentation of facts on the basis of activities. Salesmen’s reports-daily, weekly, monthly, provide valuable information relating to the salesmen’s activities for a sales organization. Salesmen, who are the primary source of information, being the eyes and ears of the selling firms, are asked to send reports periodically.

Advantages of Reports

• Salesman’s report is a good guide and indicator for building future plan-a barometer.
• Competitors’ attitude can be known.
• Sales manager does not waste time in formulating the policies for future, because of the brevity in reports.
• Salesmen takes little time in writing the reports.
• The report is a good form of control as it reveals the weakness and strong points of the salesmen.
• The changes in demand and attitude of the consumers can be known.
• It is a tool by which the activities of the salesmen can be sharpened.
• Sales manager is able to divert his attention to the situation warranted on the basis of importance.
• Salesman himself develops the habit of self-activity analysis.
• The two-way communication assures employee morale.

Sales Territories and Sales Quotas

Sales manager must try to know the sales field well in advance, before the production starts. He must know the area of demand for the products and for this he should know the habits and economic position of the customers; and the type of demand and quality of products usually in demand. In short, a detailed study of consumers is important. The sources of information are year books, census reports, publications, professional organisations etc.

Sales Territory

Almost all the firms divide their markets, after the sales field is located into different territories. Sales territory is a particular grouping of customers and prospects assigned to a salesman. A sales territory is a geographical area which contains present and potential customers, who can be served effectively and economically by a single salesman.

Its aim is to facilitate management’s task in matching sales efforts with the sales opportunities. An efficient salesman can successfully discharge his duties and responsibilities if the territory allotted to him is of workable and suitable size. A good sales planning is based on sales territory, rather than taking the whole market area.

That is, the market of a firm’s product is divided into small segments or territories or areas, so that each territory can be allotted to each salesman.

When allotting perfect sales territories, which have been planned carefully, the following objectives are aimed for the reasons thereof:

• Sales effort can be fruited more effectively in the assigned territory.
• It is possible to have increased market coverage, not losing the orders to competitors. He meets the competition wisely as it is pre-planned, because he knows the local condition.
• It prevents the duplication or overlapping sales efforts.
• Headquarters of each sales territory can be located in a place, where greater number of customers are located.
• Work load for each salesman can equitably be distributed, in terms of sales volume.

Sales Quota

Apart from the allocation of sales territories, salesmen are further controlled by fixing sales quota. Almost all the companies use quota system of defining and evaluating the task expected of the salesmen. Sales quota may be defined as the estimated volume of sales that a company expects to secure within a definite period of time.

Quota is the amount of business, in terms of value or in terms of units of sales, which is fixed for every salesman. It may be fixed for a geographical area to be achieved within a definite period of time, a month or a year. Shorter the period, the better it is. It is a target or a standard of performance that the salesman has to attain. The quota is fixed on the basis of sales forecast. For an effective control, smaller area and shorter period are preferred.

A sales quota, to be effective, practical and successful, should satisfy the following:

• Sales quota must be attainable and fair.
• It must be scientifically calculated. It should not be too small or too big.
• It must provide definite incentive to salesman.
• It must be flexible.
• It must be simple and must be fixed in consultation with the salesman.

Sales quota brings the following benefits

• The sales quota can be used as yardstick to assess the performance of the salesmen.
• It is a measuring rod with which the sales operations are directed and controlled to more profitable channels.
• It is possible and easier to locate strong markets and weak markets.
• It is a device to adopt more effective compensation plans.
• It fixes the responsibility on each salesman and so they work hard to attain the goal. The salesmen never allow the sales to fall below the quota.
• It facilitates sales contests and is a base.

Weaknesses

• In many cases the sales quota is fixed arbitrarily.
• If situations are changed, the quota fixed may become ineffective.
• If the quota is too small, the salesman will relax and if the quota fixed is too large or unattainable, the salesman loses initiative.
• It is difficult to set an accurate quota.

Bases Necessary for Fixing Quota:

• Purchasing power of the prospects.
• Past sales figures compared by analysis.
• Demand trend for the products.
• Position and degree of competition prevailing.

At the end of the quota period, it is a must to measure the effectiveness of quota by comparing the performance of salesman, in relation to the quota. To keep salesmen’s effort on the right path, quotas can be used as a control mechanism. Departure of sales activities from the projected quota is a main problem to the sales management. If sales volume is not satisfactory, the fault may lie with quota plans. Quota, as a diagnostic aid, cautions the authority to take corrective steps and especially, when the sales volume takes a negative departure from the past sales.

In all fairness, quota should be aimed at equitable distribution. It should be equal for all salesmen. Should all the salesmen have the same quotas? The answer depends upon the territories, which are not the same in respect of competition, extent, customers etc. the ability of the salesman is also different. The ‘better’ salesman with ‘better’ territory exceeds the quota and ‘poor’ salesman with ‘poor’ territory fails to achieve even the quota. By considering all these, fairness of the quote decision takes place.

Types of Quotas

• Sales volume, in value or units by product line, consumer type etc.
• Salesmen activity, such as calls, new accounts, demonstrations, display arranged etc.
• Expenses quota, either in value or percentage of sales obtained.
• Gross Margin from sales obtained etc.

Quota can be used as a management tool, if it is set scientifically.

Salesmen’s Authority

If the sales manager goes for doing all the works of a firm, it is very difficult to conduct the business Moreover, he lacks time. Therefore, the job is divided and entrusted to the salesmen. When the authority is passed on to the salesmen, there is transfer of power to the salesmen i.e., delegation of power. Delegation is the required authority to the salesmen to discharge their assigned job.

When one is delegated the authority, it means permission is given to do the duties. When authority is conferred on salesmen, they know their responsibilities. Customers may not be willing to deal with a salesman having no authority.

There are no hard and fast rules as to how much authority be given to a salesman. In modern time, the degree of authority is reduced. The authority and freedom of salesmen varies from firm to firm. To what extent the authority is given to a salesman depends upon the size and nature of the firm.

Since the salesmen are representing the firm and deal with customers, who have no direct contact with the firm, the salesmen’s authority be well-defined. Generally, catalogue, price lists advertisements etc., reveal the prices, guarantees, quality and other details of the products. And the salesmen are being relieved of these botherations.

However, salesmen may be conferred with certain measure of authority in dealing with the matters, such as special concessions, discount rates, granting credit, settlement of claims, settlement of damages, defective, unsalable items etc. But it is important that salesmen are watched in their acts which must be in accordance with the instructions by the sales manager and their activities are subject to the approval of the sales manager.

Field Supervision

Performance of a function or service by an individual is called duty; activities that an individual is required to perform are a duty on him. Authority is a right or power required to perform a job on the basis of duty assigned to one. An authorized person is empowered to do the assigned job Responsibility must always be followed by corresponding authority or power. Authority and responsibility move in opposite directions.

Authority always moves from the top downward, whereas responsibility moves upwards. Authority is derived from sales manager to whom the salesmen are responsible for proper performance of their activities. The individual responsibility and freedom of the sales personnel vary from firm to firm. A good degree of control is essential over the activities of the salesmen.

Generally the sales manager or any senior sales personnel or field supervisor; are appointed to check the activities of the salesmen so as to:

• Know whether the salesman is doing his job in best way
• Find out deficiencies if any
• Make suggestions for further improvement
• Check the procedure of orders taking
• Evaluate the performance of salesman
• Provide spot motivation to salesman
• Secure maximum coverage of the market

Control aims at appraisal of salesman’s performance. It must be done periodically and on continuing basis as to determine the compliance of policies and attainment of targeted quota in respect of job. Supervision and control are different. Supervision aims at direction for working and control includes supervision and evaluation of past performance.

Routing and Scheduling

Time must be used wisely while a salesman travels in his respective territorial area. Salesman will be encouraged to get maximum sales by reducing the wastage of time. Routing and scheduling is one of the techniques of controlling a salesman’s day to day activities. A planned routing of the salesman will facilitate easy communication, maximum territorial coverage and thereby reduce the waste time.

Management has a closer control. A clear tour plan is there and reveals route, location of customers, transport facilities, maps etc. The planned routes and schedules are to be followed by the salesman. The reports sent by the salesman can be compared with the planned routes and schedules and this reveals the deviations.

Strategic decision-making is the process of charting a course based on long-term goals and a longer term vision. By clarifying your company’s big picture aims, you’ll have the opportunity to align your shorter term plans with this deeper, broader mission giving your operations clarity and consistency.

Strategic decision making involves the following 3 things:

• The long term way forward for the company
• Selection of proper markets for the company
• The products and tactics needed to succeed in the targeted market.

Features of Strategic Decision Making

1. Strategy is at many times at tangent with Marketing Decisions

Where marketing decisions are short term, strategic decision making might consider a long term initiative, such as launching a very new and innovative product, or changing the existing product lines radically. Technology or innovation is at the crux of strategic decision making.

The reason that marketing decisions and strategy decisions are difference is because marketing is focused on retaining the existing customer base with the existing technologies. But the customer base is sure to get tired soon of the existing products and the innovators and adopters will keep searching for new products in the market. And hence, through strategic decisions, the firm has to stay in a place of continuous development.

2. There is immense risk involved while taking strategic decisions

Naturally, when you are implementing plans which will show positive or negative results only after 4-5 years, the risk in strategic decision making is huge. Think about the time and energy, not to say natural resources wasted to implement a plan which failed after 4-5 years.

Yet, even after the risk involved, companies have to implement risky strategic decisions from time to time just because the directors thought a unique product had demand in the market, or that another product is required in the market. Strategic decisions involve necessary risk and success is not guaranteed.

3. Strategic decisions involve a lot of Ifs and Buts

Think of a mind map and the number of branches and nodes that can form the complete mind map. When a brain starts thinking, the central thought might have further branches, and these branches will have even more nodes (or sub branches if you want to call them)

Similar to the mind map, a business can face many problems in the course of its run. A competitor can crop up, the market can become penetrative, the external environment can change, and many other unforeseen situations can happen. The strategic decision making has to consider all these alternatives, whether positive or negative. And the plan has to also include the action that the firm will take, if any of the above business problems or factors come into play.

4. Strategy implementation timelines

Whenever we make a schedule in our personal lives, we always start things when we have enough time in our hand. For example you will plan a holiday, when office work is not hectic. You will not plan it when there is a product launch nearby. Similarly, when in business, timelines are very important.

If a product is to be launched, the launch date is decided at least a year back, the sales phase has to be implemented at least 2 months before the actual launch so that you have sellers in place when the product is launch. Moreover, the service network is also to be planned before the launch, so that service issues are sorted out when there are problems after the product launch. If these concepts are not implemented, the marketing strategy and hence the product can fail miserably.

5. Preparing for the competition’s response

Whenever you change the market equilibrium, the competitors, whose businesses you have directly challenged, are sure to respond. When they respond, the market changes and you have to change your strategy accordingly.

In general there are 2 ways that a company directly affects the competition and the market.

• The company creates a completely new operating norm in the market itself.
• It raises customer expectations and thereby changes the market equilibrium.

Most strategic decisions will call for radical changes in the way the company operates in the existing market. Accordingly, the perception of competitors and customers will change for the company. The company has to in turn be prepared for the response of competitors in such a case.

Implementation of strategic decisions While implementing strategic decisions, you need to have eyes at the front as well as the back of your head. You need to look at what was decided at the start, as due to short term pressure, it is very much possible to deviate from the path which was already set.

Decision-making under Certainty

A condition of certainty exists when the decision-maker knows with reasonable certainty what the alternatives are, what conditions are associated with each alternative, and the outcome of each alternative. Under conditions of certainty, accurate, measurable, and reliable information on which to base decisions is available.

The cause and effect relationships are known and the future is highly predictable under conditions of certainty. Such conditions exist in case of routine and repetitive decisions concerning the day-to-day operations of the business.

Decision-making under Risk

When a manager lacks perfect information or whenever an information asymmetry exists, risk arises. Under a state of risk, the decision maker has incomplete information about available alternatives but has a good idea of the probability of outcomes for each alternative.

While making decisions under a state of risk, managers must determine the probability associated with each alternative on the basis of the available information and his experience.

Decision-making under Uncertainty

Most significant decisions made in today’s complex environment are formulated under a state of uncertainty. Conditions of uncertainty exist when the future environment is unpredictable and everything is in a state of flux. The decision-maker is not aware of all available alternatives, the risks associated with each, and the consequences of each alternative or their probabilities.

The manager does not possess complete information about the alternatives and whatever information is available, may not be completely reliable. In the face of such uncertainty, managers need to make certain assumptions about the situation in order to provide a reasonable framework for decision-making. They have to depend upon their judgment and experience for making decisions.

Modern Approaches to Decision-making under Uncertainty

There are several modern techniques to improve the quality of decision-making under conditions of uncertainty.

The most important among these are:

• Risk analysis
• Decision trees
• Preference theory

Risk Analysis

Managers who follow this approach analyze the size and nature of the risk involved in choosing a particular course of action.

For instance, while launching a new product, a manager has to carefully analyze each of the following variables the cost of launching the product, its production cost, the capital investment required, the price that can be set for the product, the potential market size and what percent of the total market it will represent.

Risk analysis involves quantitative and qualitative risk assessment, risk management and risk communication and provides managers with a better understanding of the risk and the benefits associated with a proposed course of action. The decision represents a trade-off between the risks and the benefits associated with a particular course of action under conditions of uncertainty.

Decision Trees

These are considered to be one of the best ways to analyze a decision. A decision-tree approach involves a graphic representation of alternative courses of action and the possible outcomes and risks associated with each action.

By means of a “tree” diagram depicting the decision points, chance events and probabilities involved in various courses of action, this technique of decision-making allows the decision-maker to trace the optimum path or course of action.

Preference or Utility Theory

This is another approach to decision-making under conditions of uncertainty. This approach is based on the notion that individual attitudes towards risk vary. Some individuals are willing to take only smaller risks (“risk averters”), while others are willing to take greater risks (“gamblers”). Statistical probabilities associated with the various courses of action are based on the assumption that decision-makers will follow them.

3For instance, if there were a 60 percent chance of a decision being right, it might seem reasonable that a person would take the risk. This may not be necessarily true as the individual might not wish to take the risk, since the chances of the decision being wrong are 40 percent. The attitudes towards risk vary with events, with people and positions.

Top-level managers usually take the largest amount of risk. However, the same managers who make a decision that risks millions of rupees of the company in a given program with a 75 percent chance of success are not likely to do the same with their own money.

Moreover, a manager willing to take a 75 percent risk in one situation may not be willing to do so in another. Similarly, a top executive might launch an advertising campaign having a 70 percent chance of success but might decide against investing in plant and machinery unless it involves a higher probability of success.

Though personal attitudes towards risk vary, two things are certain.

Firstly, attitudes towards risk vary with situations, i.e. some people are risk averters in some situations and gamblers in others.

Secondly, some people have a high aversion to risk, while others have a low aversion.

Most managers prefer to be risk averters to a certain extent, and may thus also forego opportunities. When the stakes are high, most managers tend to be risk averters; when the stakes are small, they tend to be gamblers.

Manpower Planning, also known as human resource planning, is the process of forecasting an organization’s future human resource needs and ensuring that the right number of qualified individuals are available to meet those needs. It involves analyzing current workforce capabilities, predicting future staffing requirements based on organizational goals and strategies, and developing plans to recruit, train, and retain employees. Effective manpower planning helps organizations optimize their human resources, minimize costs, improve productivity, and ensure that they can adapt to changing business conditions while achieving strategic objectives.

Process of Manpower Planning:

Process of manpower planning involves several steps that help organizations ensure they have the right number of employees with the necessary skills to meet their goals.

1. Assess Organizational Objectives

• Understand the organization’s short-term and long-term goals.
• Align manpower planning with strategic objectives to ensure that the workforce supports business needs.

2. Analyze Current Workforce

• Conduct a thorough evaluation of the existing workforce to determine the number of employees, their skills, experience, and qualifications.
• Identify strengths, weaknesses, and gaps in the current workforce.

3. Forecast Future Manpower Needs

• Project future staffing requirements based on factors such as business growth, upcoming projects, market trends, and technological changes.
• Use quantitative methods (statistical analysis) and qualitative methods (expert opinions) for forecasting.

4. Identify Gaps in Workforce

• Compare the current workforce against the projected needs to identify gaps.
• Determine the quantity and type of personnel required to meet future demands.

5. Develop Recruitment Plans

• Create strategies for recruiting new employees to fill identified gaps.
• Consider various recruitment sources such as job postings, employee referrals, recruitment agencies, and online platforms.

6. Implement Training and Development Programs

• Identify skills development needs and create training programs to enhance the existing workforce’s capabilities.
• Ensure employees are equipped with the skills required for future roles.

7. Evaluate and Adjust Staffing Levels

• Monitor the implementation of the staffing plan and assess its effectiveness.
• Adjust the workforce levels and recruitment plans based on changing business conditions and feedback from management.

8. Review and Revise Manpower Plan

• Continuously evaluate the manpower planning process to ensure it remains aligned with the organization’s objectives and responds to internal and external changes.
• Revise the manpower plan as needed to adapt to new business challenges or opportunities.

Reason of Manpower Planning:

• Optimal Utilization of Resources:

Manpower planning ensures that an organization effectively utilizes its human resources, preventing both understaffing and overstaffing, which can lead to inefficiencies and increased costs.

• Future Workforce Needs:

It helps organizations anticipate future staffing requirements based on business growth, projects, and changes in the industry, ensuring they have the right talent available when needed.

• Skill Development and Training:

Through manpower planning, organizations can identify skill gaps within their workforce and implement training programs to develop the necessary competencies, enhancing overall productivity.

• Employee Retention:

Effective manpower planning contributes to higher employee satisfaction by aligning individual career goals with organizational objectives, leading to improved retention rates.

• Cost Management:

By accurately forecasting staffing needs, organizations can manage labor costs more effectively, reducing unnecessary expenses related to recruitment and training.

• Adaptability to Change:

In a dynamic business environment, manpower planning enables organizations to quickly adapt to changes in market demand or operational needs by ensuring a flexible and capable workforce.

• Strategic Decision-Making:

It provides essential data and insights for strategic decision-making, allowing management to align workforce capabilities with business goals and objectives.

• Succession Planning:

Manpower planning facilitates the identification of potential leaders within the organization, ensuring a smooth transition in key positions and maintaining business continuity.

Challenges of Manpower Planning:

1. Dynamic Business Environment

The rapid changes in the business landscape, including technological advancements, market fluctuations, and evolving consumer preferences, make it difficult to predict future manpower needs accurately. Organizations must remain agile and adaptable to respond to these changes effectively.

2. Skill Shortages

Many industries face a shortage of skilled labor, making it challenging to find qualified candidates to fill key positions. As job requirements become more specialized, organizations may struggle to identify individuals with the necessary skills and experience, leading to potential gaps in the workforce.

3. Inaccurate Forecasting

Forecasting future manpower needs relies on various assumptions and data analysis, which may not always be accurate. Poor forecasting can lead to overstaffing or understaffing, both of which can have negative consequences for organizational performance and employee morale.

4. Employee Turnover

High employee turnover can disrupt manpower planning efforts. Frequent departures can create instability within teams and require ongoing recruitment and training efforts, complicating the planning process. Organizations need strategies to retain talent and minimize turnover to ensure a stable workforce.

5. Resistance to Change

Employees may resist changes associated with manpower planning, such as new roles, restructuring, or shifts in organizational culture. Overcoming this resistance requires effective communication and change management strategies to foster acceptance and cooperation among staff.

6. Integration with Other HR Functions

Manpower planning must be integrated with other human resource functions, such as recruitment, training, and performance management. Lack of coordination can lead to inefficiencies, misalignment, and missed opportunities for optimizing workforce capabilities.

7. Compliance and Regulations

Organizations must navigate various labor laws and regulations that impact manpower planning, such as equal employment opportunity laws, health and safety regulations, and union agreements. Compliance with these regulations adds complexity to the planning process and can limit flexibility.

8. Technological Integration

The integration of technology into manpower planning processes can be both a challenge and an opportunity. While technology can enhance data analysis and forecasting capabilities, organizations may face challenges in adopting new systems, training staff, and ensuring data accuracy and security.

Business Process Re-engineering (BPR) fundamentally transforms an organization’s processes to achieve significant improvements in critical performance metrics. BPR involves rethinking and redesigning workflows and business processes from the ground up, aiming to enhance efficiency, reduce costs, and improve quality. By focusing on outcomes rather than tasks, BPR often leads to radical changes in how work is done, potentially resulting in up to a 30-50% improvement in process performance. Successful BPR initiatives require strong leadership, a clear vision, and employee engagement to overcome resistance and ensure alignment with organizational goals.

Objectives of Business Process Re-engineering:

• Improving Efficiency

One of the primary objectives of BPR is to enhance operational efficiency. By analyzing and redesigning workflows, organizations can eliminate redundancies and streamline processes. This leads to faster turnaround times, reduced resource consumption, and ultimately, lower operational costs.

• Enhancing Quality

BPR aims to improve the quality of products and services by identifying and addressing flaws in existing processes. By focusing on quality improvement, organizations can increase customer satisfaction and loyalty, which are critical for long-term success. This might involve implementing standardized procedures and using technology for better accuracy.

• Increasing Flexibility

In today’s rapidly changing business environment, organizations must be agile. BPR encourages the creation of flexible processes that can quickly adapt to new market conditions, customer needs, or technological advancements. This flexibility allows companies to respond promptly to opportunities and challenges, maintaining a competitive edge.

• Boosting Customer Satisfaction

BPR is to enhance customer experience. By re-engineering processes to be more customer-centric, organizations can provide better service, reduce response times, and meet customer needs more effectively. Increased customer satisfaction not only fosters loyalty but also attracts new clients through positive word-of-mouth.

• Leveraging Technology

BPR emphasizes the integration of modern technologies to automate and optimize processes. By adopting new technologies, organizations can improve communication, data management, and workflow efficiency. This can result in significant cost savings and productivity gains, allowing employees to focus on higher-value tasks.

• Fostering Innovation

BPR encourages a culture of innovation within the organization. By rethinking established processes, organizations can identify new opportunities for improvement and growth. This objective supports the development of creative solutions and innovative products, helping companies stay ahead of competitors.

• Aligning with Strategic Goals

BPR seeks to align business processes with the overall strategic goals of the organization. By ensuring that processes support the broader objectives, companies can achieve greater coherence and synergy in their operations. This alignment facilitates better decision-making and resource allocation, ultimately driving organizational success.

Steps of Business Process Re-engineering:

• Identify Processes for Re-engineering

Start by identifying which processes need re-engineering. This involves analyzing current workflows to pinpoint inefficiencies, bottlenecks, or areas that do not align with organizational goals. Prioritize processes that will have the most significant impact on performance and customer satisfaction.

• Define Objectives and Goals

Clearly articulate the objectives of the re-engineering effort. Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with the organization’s strategic vision. These goals will guide the re-engineering process and help measure success.

• Assemble a Cross-Functional Team

Form a team that includes members from various departments affected by the process. A cross-functional team brings diverse perspectives and expertise, which is crucial for understanding the complexities of the existing processes and for designing effective solutions.

• Analyze Current Processes

Conduct a thorough analysis of the existing processes to understand how they function. Use tools like process mapping, flowcharts, or value stream mapping to visualize workflows. Identify inefficiencies, redundancies, and areas for improvement by examining how work is currently performed.

• Design New Processes

Based on the analysis, design new, streamlined processes that eliminate inefficiencies and enhance performance. Focus on creating processes that are customer-centric, leveraging technology and best practices. Ensure the new design aligns with the established objectives and goals.

• Implement Changes

Develop a detailed implementation plan that outlines the steps, timelines, and resources needed to execute the new processes. Communicate the changes to all stakeholders, and provide training and support to ensure a smooth transition. This step often requires strong leadership to guide the organization through the change.

• Monitor and Evaluate

After implementation, continuously monitor the performance of the new processes against the established metrics and goals. Gather feedback from employees and customers to assess the effectiveness of the changes. Use this data to identify areas for further improvement and make necessary adjustments.

• Continuous Improvement

BPR is not a one-time effort but a continuous process. Foster a culture of continuous improvement by regularly reviewing processes and seeking feedback. Encourage innovation and adaptability to ensure that the organization remains responsive to changing market conditions and customer needs.

Benefits of Business Process Reengineering:

• Increased Efficiency

One of the most immediate benefits of BPR is improved efficiency. By re-evaluating and redesigning processes, organizations can eliminate redundant steps and streamline workflows. This leads to faster execution of tasks and better utilization of resources, resulting in lower operational costs.

• Enhanced Quality

BPR focuses on identifying and rectifying process flaws, which can lead to higher quality products and services. By implementing standardized processes and best practices, organizations can reduce errors and improve consistency. Enhanced quality not only boosts customer satisfaction but also strengthens the organization’s reputation.

• Greater Customer Satisfaction

BPR prioritizes customer needs by creating processes that are more responsive and tailored to client expectations. By reducing response times and improving service delivery, organizations can enhance the overall customer experience. Increased customer satisfaction fosters loyalty and can lead to repeat business and referrals.

• Flexibility and Agility

In a dynamic business environment, the ability to adapt quickly is crucial. BPR enables organizations to design flexible processes that can easily accommodate changes in market conditions, customer demands, or technological advancements. This agility allows businesses to seize new opportunities and respond to challenges more effectively.

• Cost Reduction

Through the elimination of inefficiencies and redundancies, BPR can lead to significant cost savings. Organizations can reduce labor costs, minimize waste, and optimize resource allocation. Lower operational costs improve the bottom line and enable reinvestment in growth initiatives.

• Improved Employee Morale

Streamlined processes reduce frustration among employees caused by bureaucratic hurdles and inefficiencies. When employees work in an environment with clear, efficient processes, their productivity increases, leading to higher job satisfaction and morale. Engaged employees are more likely to contribute positively to the organization.

• Innovation and Competitive Advantage

BPR encourages a culture of innovation by challenging existing practices and promoting creative thinking. Organizations that embrace BPR are more likely to identify new opportunities and develop innovative products or services. This focus on innovation can provide a significant competitive advantage in the marketplace.

Challenges of Business Process Reengineering:

• Resistance to Change

One of the most significant hurdles in BPR is employee resistance. Many individuals are comfortable with established routines and may view changes as threats to their job security or work processes. Overcoming this resistance requires effective communication, involvement, and change management strategies to foster buy-in from all levels of the organization.

• Lack of Clear Vision

BPR initiatives can falter without a clear vision and objectives. If the goals of the reengineering process are not well-defined or communicated, employees may lack direction, leading to confusion and ineffective implementation. Establishing a clear and compelling vision is essential for aligning efforts and motivating the team.

• Insufficient Leadership Support

Successful BPR requires strong leadership commitment and support. Without active engagement from top management, initiatives may lack the necessary resources, authority, and visibility. Leaders must champion the change, provide direction, and demonstrate commitment to the reengineering process for it to gain traction.

• Inadequate Training and Skills

Reengineering processes often require new skills and knowledge. If employees are not adequately trained to adapt to new systems, technologies, or workflows, the implementation can suffer. Organizations must invest in comprehensive training programs to equip employees with the skills needed to succeed in the transformed environment.

• Complexity of Processes

Analyzing and redesigning complex processes can be overwhelming. Organizations may struggle to identify all variables and interdependencies within their existing workflows. This complexity can lead to incomplete assessments and poorly designed processes, undermining the effectiveness of the reengineering effort.

• Scope Creep

BPR projects progress, there is a risk of scope creep, where the focus expands beyond the original objectives. This can lead to resource overextension, delays, and confusion about priorities. Organizations must maintain a disciplined approach, ensuring that the scope of the project remains focused and aligned with strategic goals.

• Measurement and Evaluation Challenges

Measuring the success of BPR initiatives can be difficult. Organizations may struggle to define appropriate metrics or benchmarks to evaluate performance improvements effectively. Without clear metrics, it can be challenging to assess the impact of changes and make necessary adjustments, leading to potential stagnation or regression.

Control in Management refers to the process of monitoring and evaluating performance against established standards and objectives. It involves setting performance benchmarks, measuring actual outcomes, comparing them with targets, and taking corrective actions as needed. The ultimate goal of control is to ensure that organizational activities align with strategic goals, thereby enhancing efficiency and effectiveness.

Control Process involves the following Steps as shown in the figure:

The control process involves several key steps:

1. Establishing Standards

Standards serve as benchmarks for evaluating performance in business functions and are classified into two categories:

• Measurable (Tangible) Standards: These standards are quantifiable and expressed in terms of cost, output, time, profit, etc.
• Non-Measurable (Intangible) Standards: These cannot be quantified monetarily. Examples include manager performance, employee attitudes, and workplace morale.

Establishing these standards simplifies the control process, as control is exercised based on them.

2. Measurement of Actual Performance

The second step is assessing actual performance levels to identify deviations from established standards. Measuring tangible standards is generally straightforward, as they can be quantified easily. However, evaluating intangible standards, such as managerial performance, can be challenging and may rely on factors like:

• Employee attitudes
• Workforce morale
• Improvements in the work environment
• Communication with superiors

Performance measurement may also be supported by various reports (weekly, monthly, quarterly, or yearly).

3. Comparison of Actual Performance with Standards:

Comparing actual performance against planned targets is crucial. A deviation is defined as the gap between actual and planned performance. Managers need to identify two key aspects:

• Extent of Deviation: Is the deviation positive, negative, or aligned with expectations?
• Cause of Deviation: Understanding why deviations occurred is vital for effective management.

Managers should focus on critical deviations while overlooking minor ones. For instance, a 5-10% increase in stationery costs may be considered minor, whereas a continuous decline in monthly production signifies a major issue.

Common causes of deviations:

• Faulty planning
• Lack of coordination
• Defective plan implementation
• Ineffective supervision and communication

4. Taking Corrective Actions

After identifying the extent and causes of deviations, managers must implement remedial measures. They have two options:

1. Corrective Measures: Address the deviations that have already occurred.
2. Revision of Targets: If the corrective actions do not align actual performance with planned targets, managers may choose to adjust the targets.

Controlling is a fundamental management function that involves monitoring organizational performance, comparing it against established standards, and taking corrective actions when necessary. It ensures that the organization’s activities align with its goals and objectives. The controlling process includes setting performance standards, measuring actual performance, and evaluating deviations from the standards. Effective controlling helps identify areas for improvement, ensures resource optimization, and enhances decision-making. By providing feedback on performance, controlling enables managers to make informed adjustments to strategies and operations, fostering efficiency and effectiveness in achieving organizational goals.

Definition of Controlling:

• Henri Fayol:

Fayol, a pioneer in management theory, defined controlling as “the process of verifying whether everything occurs in conformities with the plan adopted, the instructions issued, and the principles established.” This emphasizes the alignment of actual performance with planned objectives.

• George R. Terry:

Terry defined controlling as “the measurement of accomplishment against standards and the correction of deviation to ensure achievement of organizational objectives.” This highlights the evaluative aspect of controlling in relation to organizational goals.

• Harold Koontz and Cyril O’Donnell:

They defined controlling as “the function of management which ensures that everything occurs in accordance with the standards established.” This definition stresses the importance of standards in the controlling process.

• Peter Drucker:

Drucker defined controlling as “the process of measuring performance and taking corrective actions when necessary.” His focus is on performance measurement and the proactive nature of controlling.

• Luther Gulick:

Gulick described controlling as “the function of management which ensures that organizational goals are met through appropriate actions.” This definition emphasizes the role of controlling in achieving organizational objectives.

• American Management Association (AMA):

AMA defines controlling as “the process of establishing standards to achieve organizational goals, measuring actual performance against those standards, and taking corrective action when necessary.” This definition encapsulates the overall purpose of the controlling function.

• Robert J. Mockler:

Mockler defined controlling as “the process of monitoring performance, comparing it with the established standards, and taking corrective action if necessary to ensure that the organization’s objectives are achieved.” This highlights the cyclical nature of controlling in the management process.

Importance of Controlling:

• Ensures Goal Achievement:

The primary purpose of controlling is to ensure that organizational goals are met. By setting performance standards and measuring actual performance against these benchmarks, managers can identify deviations and take corrective actions, ensuring that the organization remains on track to achieve its objectives.

• Enhances Efficiency:

Controlling helps to improve the efficiency of organizational processes. By monitoring operations, managers can identify bottlenecks, redundancies, and areas for improvement. This allows for the optimization of resource utilization, reducing waste and improving overall productivity.

• Facilitates Decision-Making:

Effective controlling provides managers with relevant and timely information about performance. This information is critical for informed decision-making. Managers can analyze trends, identify problems, and evaluate the effectiveness of different strategies, enabling them to make better decisions that align with organizational goals.

• Promotes Accountability:

Control systems establish clear expectations and performance standards for employees. This promotes accountability, as individuals are aware of the metrics against which their performance will be evaluated. When employees understand that their work is being monitored, they are more likely to take ownership of their responsibilities and strive to meet performance standards.

• Encourages Continuous Improvement:

Controlling fosters a culture of continuous improvement within the organization. Regular performance assessments and feedback mechanisms encourage employees to seek ways to enhance their work processes, leading to innovation and higher quality outcomes. This proactive approach contributes to long-term organizational success.

• Identifies Problems Early:

Through ongoing monitoring and evaluation, controlling enables managers to identify potential issues before they escalate into significant problems. Early detection allows for timely interventions, minimizing the impact on operations and helping to maintain organizational stability.

• Facilitates Coordination:

Controlling ensures that different departments and teams within the organization are working harmoniously toward common goals. By monitoring interdependencies and ensuring that performance aligns with overall objectives, controlling promotes coordination and cooperation among various organizational units.

• Provides a Basis for Future Planning:

The information gathered during the controlling process serves as valuable input for future planning. By analyzing performance data, managers can assess the effectiveness of previous strategies, identify trends, and make informed projections for the future. This alignment between past performance and future planning helps organizations remain agile and responsive to changing circumstances.

Nature of Controlling:

• Goal-Oriented:

Controlling is fundamentally concerned with achieving organizational goals. It involves setting performance standards that align with these goals and continuously monitoring progress toward their attainment. By focusing on objectives, controlling ensures that all activities are directed towards fulfilling the organization’s mission.

• Continuous Process:

Controlling is an ongoing process that occurs throughout the life of an organization. It involves regular monitoring and evaluation of performance, enabling managers to identify deviations and take corrective actions as needed. This continuous nature ensures that organizations remain adaptable to changes and can maintain effective performance.

• Feedback Mechanism:

One of the critical functions of controlling is to provide feedback on performance. By comparing actual performance with established standards, managers can assess whether goals are being met. This feedback loop is essential for identifying areas for improvement and making informed decisions regarding resource allocation and operational adjustments.

• Dynamic Function:

Controlling is not a static function; it evolves with the organization and its environment. As organizations face new challenges and opportunities, the controlling process must adapt to reflect changes in strategies, technologies, and market conditions. This dynamism ensures that controlling remains relevant and effective in guiding organizational performance.

• Involves Decision-Making:

Controlling is closely linked to decision-making processes. Managers must analyze performance data, interpret results, and make decisions about corrective actions when performance deviates from standards. This aspect highlights the importance of analytical skills and judgment in effective controlling, as managers must be able to determine the best course of action based on performance assessments.

• Universal Applicability:

The principles of controlling apply to all types of organizations, regardless of size or industry. Whether in manufacturing, services, or non-profit sectors, controlling is essential for ensuring that organizational activities are aligned with strategic objectives. This universality underscores the importance of controlling as a core function of management.

• Emphasizes Efficiency and Effectiveness:

The primary aim of controlling is to enhance organizational efficiency and effectiveness. By monitoring processes and performance, organizations can optimize resource use and improve productivity. Effective controlling helps identify waste, streamline operations, and ensure that activities are conducted in the most efficient manner possible, ultimately contributing to organizational success.

Scope of Controlling:

• Performance Measurement:

One of the primary scopes of controlling is to measure the actual performance of employees, departments, and the organization as a whole. This involves establishing performance standards and metrics, collecting data on actual performance, and comparing it with the set standards. Performance measurement provides insights into how well an organization is functioning and identifies areas that require improvement.

• Deviation Analysis:

Controlling involves analyzing deviations between actual performance and planned performance. When discrepancies arise, managers must determine the causes of these deviations. This analysis helps in understanding whether the deviations are due to external factors, such as market conditions, or internal factors, such as operational inefficiencies. By identifying the root causes, organizations can implement corrective actions to address the issues.

• Corrective Actions:

Based on the analysis of deviations, controlling encompasses the development and implementation of corrective actions. These actions are designed to realign actual performance with established standards and objectives. Corrective measures may include changes in processes, resource reallocation, or additional training for employees. The goal is to ensure that the organization remains on track to achieve its goals.

• Resource Management:

Controlling plays a critical role in managing organizational resources effectively. This includes financial resources, human resources, and physical assets. By monitoring resource utilization and efficiency, managers can ensure that resources are allocated appropriately, minimizing waste and maximizing productivity. Effective resource management contributes to the overall effectiveness of the organization.

• Budgetary Control:

A significant aspect of controlling is budgetary control, which involves monitoring the organization’s financial performance against budgeted figures. Managers use budgetary controls to assess spending, revenue generation, and profitability. By analyzing variances between budgeted and actual figures, managers can make informed financial decisions and adjust budgets as necessary to meet organizational objectives.

• Quality Control:

Controlling also encompasses quality control measures to ensure that products and services meet established quality standards. This includes implementing processes for inspecting and testing outputs, as well as continuous improvement initiatives. Quality control helps organizations maintain high standards, enhance customer satisfaction, and reduce costs associated with defects and rework.

• Strategic Control:

Controlling extends to strategic control, which involves monitoring the organization’s progress toward achieving its long-term goals and strategic objectives. This includes assessing the effectiveness of strategies, evaluating competitive positioning, and ensuring that the organization adapts to changing market conditions. Strategic control helps organizations remain proactive and responsive in a dynamic business environment.

Limitations of Controlling:

• Inflexibility:

Controlling can lead to rigidity in an organization. Overemphasis on control mechanisms may result in inflexible procedures, stifling creativity and innovation. Employees may feel constrained by strict guidelines and metrics, which can hinder their ability to adapt to changing circumstances or propose new ideas.

• Costly Process:

Implementing a comprehensive control system can be expensive. The costs associated with setting up control measures, monitoring performance, and conducting audits can strain organizational resources. Small businesses, in particular, may find it challenging to allocate sufficient funds for effective control systems.

• Time-Consuming:

The controlling process can be time-consuming. Collecting data, analyzing performance, and implementing corrective actions require considerable time and effort from managers and employees. This time investment may distract from other critical activities and delay decision-making processes.

• Subjectivity in Evaluation:

Controlling often involves subjective judgment in performance evaluation. Managers may rely on their interpretations of data, which can lead to bias and inconsistencies in assessing employee performance. This subjectivity can create misunderstandings, conflicts, and decreased morale among staff.

• Limited Scope:

Control systems may focus primarily on quantitative measures, neglecting qualitative factors such as employee satisfaction, teamwork, and organizational culture. A narrow focus on numbers can overlook important aspects of performance that contribute to overall success.

• Resistance to Control:

Employees may resist control measures due to perceived threats to their autonomy and job security. This resistance can result in a lack of cooperation, reduced morale, and a negative organizational climate. Overly strict control measures can lead to disengagement and decreased productivity among staff.

• Delayed Feedback:

In some cases, feedback from control systems may be delayed, making it challenging to address issues promptly. If performance data is not available in real-time, managers may miss opportunities to make timely corrections, allowing problems to escalate.

• Overreliance on Control Systems:

Organizations may become overly dependent on control systems, leading to a lack of initiative and accountability among employees. When individuals feel that their work is constantly monitored, they may become less proactive and less willing to take risks, ultimately affecting overall performance.

Management by Exception (MBE) is a management approach where leaders focus on significant deviations from set standards or expected outcomes, rather than on routine operations. Managers intervene only when performance significantly deviates from targets, either exceeding or falling short of expectations. This allows them to concentrate on critical issues that require attention, while routine matters are handled by subordinates. MBE improves efficiency by reducing the time managers spend on day-to-day activities and encourages employee autonomy. It ensures effective resource allocation and quick response to major problems or opportunities.

Steps of Management by Exception (MBE):

1. Set Clear Objectives and Performance Standards

The first step in MBE is to establish clear organizational goals and performance standards. These benchmarks provide a basis for evaluating results and identifying exceptions. The standards must be measurable, relevant, and aligned with the company’s strategic objectives. Employees should be well-informed about these expectations to ensure understanding and compliance.

2. Measure Actual Performance

Once the objectives and standards are set, managers need to continuously monitor and measure actual performance. This involves collecting data from various sources, such as reports, audits, or performance reviews, to ensure accurate and timely measurement of employee or departmental outputs. The performance data should be transparent and easily accessible to facilitate ongoing monitoring.

3. Compare Performance Against Standards

In this step, managers compare the measured performance against the set standards. The goal is to identify any significant deviations that require attention. This comparison helps determine whether performance is on track or if there are substantial differences that necessitate intervention.

4. Identify Exceptions

Managers focus only on deviations that are significant enough to be considered exceptions. These exceptions could be positive, such as exceeding sales targets, or negative, such as underperforming in a key area. Identifying exceptions helps managers concentrate on the most critical areas, while routine matters are handled by employees.

5. Analyze the Cause of Exceptions

Once exceptions are identified, managers analyze the underlying causes of the deviations. This involves investigating whether the exception was caused by internal factors, such as inadequate resources or poor planning, or external factors, such as market changes. Understanding the root cause is essential for developing appropriate corrective actions.

6. Take Corrective Action

After identifying the cause of exceptions, managers take corrective action to resolve the issue. The nature of the corrective action will depend on the severity and type of deviation. It could involve reallocating resources, providing additional training, revising strategies, or making adjustments to the performance standards.

7. Monitor Results of Corrective Action

Once corrective measures are implemented, the next step is to monitor the results to ensure the actions have successfully addressed the exception. This continuous monitoring helps prevent future deviations and ensures that the organization remains on track toward achieving its goals.

8. Review and Adjust Standards (if necessary)

In some cases, the performance standards themselves may need adjustment. If the deviation is not due to employee performance but rather unrealistic or outdated standards, managers may need to revise the objectives or benchmarks to reflect changing circumstances. This step ensures that the standards remain relevant and achievable.

Advantages of Management by Exception (MBE):

1. Efficient Use of Managerial Time

One of the primary advantages of MBE is that it saves time for managers by allowing them to focus on critical issues instead of routine matters. Managers only step in when performance deviates significantly from the plan, which frees them from constantly micromanaging every aspect of operations. This selective attention helps in better time management and ensures that their focus is directed where it is most needed.

2. Promotes Employee Autonomy

MBE encourages employees to take responsibility for day-to-day operations, as managers intervene only when necessary. Employees gain autonomy over routine tasks, which can boost their confidence, decision-making abilities, and job satisfaction. This empowerment of employees leads to increased accountability and promotes a sense of ownership over their work.

3. Encourages Better Decision-Making

Since MBE focuses on exceptions or significant deviations, it ensures that managerial attention is drawn to issues that require immediate decision-making. This system of management helps managers make quicker and more informed decisions about critical matters, leading to timely corrective actions. It also helps in prioritizing the most pressing concerns, thus improving overall decision-making efficiency.

4. Increased Productivity

By allowing employees to handle regular tasks independently and focusing managerial attention on significant issues, MBE can enhance productivity. Managers are not bogged down by routine matters and can concentrate on strategic activities, which in turn improves overall organizational efficiency. This division of focus also ensures that employees perform their tasks with minimal supervision, leading to a smoother workflow.

5. Reduction in Information Overload

MBE reduces the burden of information overload for managers. Since they are only required to intervene when performance falls outside established norms, they receive fewer reports and updates about routine activities. This selective information flow allows managers to concentrate on critical reports, reducing unnecessary data handling and simplifying decision-making.

6. Effective Resource Allocation

By focusing on significant deviations from the norm, MBE ensures that resources—both human and financial—are allocated efficiently. Managers can direct resources towards solving key issues or seizing important opportunities, rather than wasting them on minor adjustments. This strategic allocation of resources helps in optimizing organizational performance.

7. Improved Control Mechanism

MBE establishes a clear control mechanism by setting performance standards and monitoring outcomes. Managers can quickly identify areas of concern and take corrective actions when deviations occur. This ensures that problems are addressed before they escalate, maintaining better control over operations and ensuring adherence to goals and policies.

8. Encourages Focus on Strategic Issues

Since MBE directs managerial attention to exceptions, it ensures that managers focus on strategic issues that require intervention. This ability to concentrate on important matters allows for more effective long-term planning, risk management, and opportunity exploitation. It aligns managerial efforts with the organization’s strategic objectives, promoting growth and competitiveness.

Limitations of Management by Exception (MBE):

1. Overlooking Minor issues

MBE’s focus on significant deviations can lead to the neglect of minor problems that, if left unresolved, may escalate into larger issues. These small discrepancies might seem insignificant but can compound over time, eventually affecting overall performance or creating inefficiencies in processes.

2. Delayed Managerial Intervention

One of the potential downsides of MBE is that by waiting for deviations to become significant, managers may respond too late. This delay in intervention might cause problems to worsen before they are addressed. Timely management involvement is crucial, but MBE may cause managers to overlook issues until they require immediate attention.

3. Dependence on Pre-Established Standards

MBE relies heavily on pre-established performance standards or benchmarks. If these standards are outdated or inappropriate, the entire system of exception management may fail. Poorly set benchmarks can lead to either excessive managerial intervention or insufficient control over processes.

4. Employee Demotivation

Employees may feel demotivated or neglected under MBE, as managers only step in when there are issues. Without consistent feedback and engagement, employees might feel undervalued or ignored. This can reduce motivation and lower job satisfaction, ultimately affecting overall productivity.

5. Limited Managerial Involvement in Daily Operations

MBE encourages minimal involvement in routine operations. While this can increase efficiency, it also means that managers might lose touch with day-to-day activities. Lack of involvement in operational matters could result in managers being disconnected from the realities faced by employees, leading to ineffective decision-making when intervention is required.

6. Potential for Over-Reliance on Technology

In many MBE systems, technology is used to monitor performance and detect deviations. This reliance on technology can create issues if the systems fail or produce inaccurate data. Over-reliance on technology may also lead to a reduction in the human element of management, weakening the ability to understand the nuances of workplace dynamics.

7. Reactive Rather than Proactive Management

MBE is inherently reactive, meaning that managers wait for problems to arise before acting. This reactive approach can hinder the organization’s ability to proactively address potential risks or exploit emerging opportunities. Being proactive is essential for long-term success, but MBE may limit this forward-thinking capability.

8. Challenges in Defining “Exception”

Determining what constitutes a significant exception can be challenging. Different departments or managers may have varying thresholds for what they consider an exception, leading to inconsistency in when interventions are triggered. This inconsistency can create confusion and reduce the effectiveness of MBE.

9. Stifling Innovation

MBE’s emphasis on conformity to standards may stifle creativity and innovation. Employees may focus solely on meeting established benchmarks, avoiding risks or new ideas to prevent deviations. This could limit opportunities for improvement and hinder the organization’s ability to innovate and adapt to changing environments.

Control Techniques are methods used by managers to ensure that organizational goals are achieved effectively and efficiently. They involve measuring actual performance against established standards, identifying deviations, and implementing corrective actions. Common control techniques include direct supervision, financial analysis, budgetary control, and management information systems. These techniques help organizations monitor operations, assess performance, and make informed decisions, ultimately facilitating continuous improvement and ensuring that objectives are met within the desired timeframe and resource constraints.

Types of Control Techniques:

• Direct Supervision and Observation

This is the oldest technique of controlling, where supervisors observe employees directly during their work. This method allows supervisors to address issues in real-time and gain firsthand insights into employee performance. It’s particularly effective in small businesses where close interaction is feasible.

• Financial Statements

Organizations prepare Profit and Loss Accounts and Balance Sheets to summarize financial performance over specific periods. These statements help compare current figures with previous years and facilitate ratio analysis, which assesses profitability, liquidity, and solvency.

• Budgetary Control

Budgetary control involves the establishment of budgets for various business aspects, including income, expenditures, production, and capital. It serves as a managerial control tool, enabling businesses to monitor financial performance against planned budgets.

• Break-Even Analysis

Break-Even Analysis identifies the point at which total revenues equal total costs, meaning no profit or loss is incurred. By determining this point, businesses can assess performance and make necessary adjustments to improve future outcomes.

• Return on Investment (ROI)

ROI measures the profitability of investments in fixed assets and working capital. A high ROI indicates strong financial performance, while a low ROI highlights areas needing improvement. It allows for performance comparisons over time and between firms.

• Management by Objectives (MBO)

MBO is a collaborative process where objectives are set jointly by superiors and subordinates. It includes periodic evaluations and feedback, ensuring that individual performances are assessed against established goals, which can lead to rewards for achievement.

• Management Audit

Management audit evaluates the entire management process, including planning, organizing, directing, and controlling. Conducted by experts, it assesses efficiency by analyzing plans, objectives, policies, and procedures, providing insights into managerial performance.

• Management Information System (MIS)

MIS collects and processes accurate information about internal operations and external environments. By providing managers with relevant data, it supports informed decision-making and allows for effective delegation without losing control.

• PERT and CPM Techniques

Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) focus on the sequential completion of activities within a project. These techniques help manage time and resources effectively, ensuring timely project completion.

• Self-Control

Self-control empowers individuals to set their own targets and evaluate their performance independently. While it’s crucial for top-level managers, subordinates should also be encouraged to adopt self-control to reduce the burden of constant oversight by superiors.

Types of Control:

• Feed-Forward Controls

These controls are proactive, aiming to identify and address potential problems before they arise. They can be diagnostic (indicating what has deviated from standards) or therapeutic (explaining why deviations occurred and recommending corrective actions).

• Concurrent (Prevention) Control

This type of control allows for adjustments during an ongoing process. By establishing clear job descriptions and specifications, concurrent controls prevent errors before they happen, improving overall efficiency.

• Feedback Controls

Feedback controls are historical and assess performance after the fact. They focus on end results and provide information for future activities to avoid repeating past mistakes.

Controlling Process in Business Management

• Setting Performance Standards

The first step involves establishing benchmarks for measuring actual performance, which can be quantitative (e.g., revenue targets) or qualitative (e.g., improving employee motivation).

• Measurement of Actual Performance

After setting standards, actual performance is measured using various techniques, such as performance reports, financial ratios, and direct observation.

• Comparing Actual Performance with Standards

This step involves evaluating actual results against the established standards to identify any deviations.

• Analyzing Deviations

Significant deviations warrant urgent management attention, while minor deviations can be addressed later. Techniques such as critical point control and management by exception are useful in this phase.

• Taking Corrective Action

If deviations exceed acceptable limits, management must implement corrective measures to align performance with standards, focusing particularly on critical areas that impact overall business success.

Staffing is a crucial management function that involves the recruitment, selection, training, and development of employees to ensure that an organization has the right people in the right positions. It aims to align individual skills and competencies with organizational needs, promoting efficiency and productivity. Staffing encompasses job analysis, workforce planning, and employee engagement strategies, facilitating the achievement of organizational goals. Effective staffing ensures that an organization can adapt to changing demands, enhances employee satisfaction, and fosters a positive work environment, ultimately contributing to the overall success and growth of the organization.

Functions of Staffing

• The first and foremost function of staffing is to obtain qualified personnel for different jobs position in the organization.
• In staffing, the right person is recruited for the right jobs, therefore it leads to maximum productivity and higher performance.
• It helps in promoting the optimum utilization of human resource through various aspects.
• Job satisfaction and morale of the workers increases through the recruitment of the right person.
• Staffing helps to ensure better utilization of human resources.
• It ensures the continuity and growth of the organization, through development managers.

According to Theo Haimann, “Staffing pertains to recruitment, selection, development and compensation of subordinates.”

1. Staffing is an important managerial function: Staffing function is the most important managerial act along with planning, organizing, directing and controlling. The operations of these four functions depend upon the manpower which is available through staffing function.
2. Staffing is a pervasive activity: As staffing function is carried out by all mangers and in all types of concerns where business activities are carried out.
3. Staffing is a continuous activity: This is because staffing function continues throughout the life of an organization due to the transfers and promotions that take place.
4. The basis of staffing function is efficient management of personnel’s: Human resources can be efficiently managed by a system or proper procedure, that is, recruitment, selection, placement, training and development, providing remuneration, etc.
5. Staffing helps in placing right men at the right job: It can be done effectively through proper recruitment procedures and then finally selecting the most suitable candidate as per the job requirements.
6. Staffing is performed by all managers: Depending upon the nature of business, size of the company, qualifications and skills of managers, etc. In small companies, the top management generally performs this function. In medium and small scale enterprise, it is performed especially by the personnel department of that concern.

Nature of Staffing

Staffing is an integral part of human resource management. It facilitates procurement and placement of right people on the right jobs.

(i)  People Centred

Staffing is people centred and is relevant in all types of organizations. It is concerned with all categories of personnel from top to bottom of the organization.

(ii) Responsibility of Every Manager

Staffing is a basic function of management. Every manager is continuously engaged in performing the staffing function. He is actively associated with recruitment, selection, training and appraisal of his subordinates. These activities are performed by the chief executive, departmental managers and foremen in relation to their subordinates. Thus, staffing is a pervasive function of management and is performed by the managers at all levels.

It is the duty of every manager to perform the staffing activities such as selection, training, performance appraisal and counseling of employees. In many enterprises. Personnel Department is created to perform these activities.

But it does not mean that the managers at different levels are relieved of the responsibility concerned with staffing. The Personnel Department is established to provide assistance to the managers in performing their staffing function. Thus, every manager has to share the responsibility of staffing.

(iii) Human Skills

Staffing function is concerned with training and development of human resources. Every manager should use human relations skill in providing guidance and training to the subordinates. Human relations skills are also required in performance appraisal, transfer and promotion of subordinates. If the staffing function is performed properly, the human relations in the organization will be cordial.

(iv) Continuous Function

Staffing function is to be performed continuously. It is equally important in the established organizations and the new organizations. In a new organization, there has to be recruitment, selection and training of personnel. In a running organization, every manager is engaged in various staffing activities. He is to guide and train the workers and also evaluate their performance on a continuous basis.

Importance of Staffing

It is most importance for the organization that right kinds of people are employed. They should be given adequate training so that wastage is minimum. They must also be induced to show higher productivity and quality by offering them incentives.

1. Efficient Performance of Other Functions

Staffing is the key to the efficient performance of other functions of management. If an organization does not have competent personnel, it can’t perform planning, organization and control functions properly.

2. Effective Use of Technology and Other Resources

It is the human factor that is instrumental in the effective utilization of latest technology, capital, material, etc. the management can ensure right kinds of personnel by performing the staffing function.

3. Optimum Utilization of Human Resources

The wage bill of big concerns is quite high. They also spend money on recruitment, selection, training and development of employees. In order to get the optimum output from the personnel, the staffing function should be performed in an efficient manner.

4. Development of Human Capital

The management is required to determine the manpower requirements well in advance. It has also to train and develop the existing personnel for career advancement. This will meet the requirements of the company in future.

5. Motivation of Human Resources

The behaviour of individuals is shaped by many factors such as education level, needs, socio-cultural factors, etc. that is why, the human aspect of organization has become very important. The workers can be motivated through financial and non-financial incentives.

6. Building Higher Morale

Right type of climate should be created for the workers to contribute to the achievement of the organizational objectives. By performing the staffing function effectively, management can show the significance it attaches to the personnel working in the enterprise. This will increase the morale of the employees.

Steps involved in Staffing Process

• Manpower Planning

Manpower planning can be regarded as the quantitative and qualitative measurement of labour force required in an enterprise. Therefore, in an overall sense, the planning process involves the synergy in creating and evaluating the manpower inventory and as well as in developing the required talents among the employees selected for promotion advancement

• Recruitment

Recruitment is a process of searching for prospective employees and stimulating them to apply for jobs in the organization. It stands for finding the source from where potential employees will be selected.

• Selection

Selection is a process of eliminating those who appear unpromising. The purpose of this selection process is to determine whether a candidate is suitable for employment in the organization or not. Therefore, the main aim of the process of selection is selecting the right candidates to fill various positions in the organization. A well-planned selection procedure is of utmost importance.

• Placement

Placement means putting the person on the job for which he is selected. It includes introducing the employee to his job.

• Training

After selection of an employee, the important part of the programmed is to provide training to the new employee. With the various technological changes, the need for training employees is being increased to keep the employees in touch with the various new developments.

• Development

A sound staffing policy provides for the introduction of a system of planned promotion in every organization. If employees are not at all having suitable opportunities for their development and promotion, they get frustrated which affect their work.

• Promotions

The process of promotion implies the up-gradation of an employee to a higher post involving increasing rank, prestige and responsibilities. Generally, the promotion is linked to increment in wages and incentives but it is not essential that it always relates to that part of an organization.

• Transfer

Transfer means the movement of an employee from one job to another without increment in pay, status or responsibilities. Therefore this process of staffing needs to evaluated on a timely basis.

• Appraisal

Appraisal of employees as to how efficiently the subordinate is performing a job and also to know his aptitudes and other qualities necessary for performing the job assigned to him.

• Determination of Remuneration

This is the last process which is very crucial as it involves in determining remuneration which is one of the most difficult functions of the personnel department because there are no definite or exact means to determine correct wages.

Benefits of the Staffing Process:

• Right People, Right Jobs: Ensures the right individuals are hired for the right positions at the right time.
• Improved Organizational Productivity: Proper selection and training lead to enhanced employee quality and performance.
• Job Satisfaction: Effective staffing promotes job satisfaction, leading to high employee morale.
• Organizational Harmony: Staffing practices that prioritize meritocracy foster peace and cooperation within the organization.

Limitations of Staffing:

• Internal Recruitment Bias: Relying on internal sources may deter capable external candidates from applying.
• Limited Talent Pool: The required number of qualified individuals may not always be available within the organization.
• Innovation Constraints: Positions requiring creative thinking may not benefit from an internal recruitment approach.
• Inefficient Promotions: Over-reliance on seniority can lead to the promotion of less efficient individuals, negatively impacting the organization.