Controlling as a Function of Management - Term Paper Example

Controlling as a function of management (A case of Canadian Tire). Controlling in management entails monitoring the performance of any activity, evaluating them, and then taking appropriate measures to achieve the set objectives. It is one of the management functions that the Canadian Tire has managed to use so as to achieve its set objectives. Canadian Tire Corporation Limited is a Canadian operates automotive parts and accessory stores, Gasoline stations, Family clothing stores, Electronic shopping, automotive oil change and Lubrication shops, Tire dealers, Home centers and Car washes. According to Harold Koontz, Cyril O’Donnell (1995) says, “Control is checking current performance against predetermined standards contained in the plans with a view to ensure adequate progress and performance.” Controlling as part of the management ensures that the organization activities are carried out as planned and ensures that the resources are utilized effectively and efficiently while taking any corrective action so as to achieve the overall organizational goals. Furthermore, every person in the organization has an individual goal which mostly depends on the organizational performance so if the organization goal fails so is to the individuals. So to ensure that the individual goals are met, the overall organizational goals must be controlled for consistency. It also ensures that the organizational policies and rules are adhered to so as to improve the organizational trust, reputation, loyalty and growth from infancy to maturity. As McBride & Hugh (1997) puts it. “The company-Hamilton Tire and Garage Limited-stocked a small inventory of repair and replacement goods, including tires batteries, automobile fluids. Although automobile Industry was still in its infancy, the Billesses believed surging automobile sales at the Time indicated a bright future for their time. Later that year, in fact, Toronto hosted its first “Closed car show,” in which windshield wipers, automatic starter and other new car part were introduced." (p.56) The control process in Canadian Tire is not cybernetic, one that is self contained in its performance monitoring and correction capabilities, but it does follow similar principles. That is, setting the objectives of the organization and standards that are feasible, taking measurement of the results and then comparing them with the set objectives or the standards and then takes appropriate action. As Mockler (1970) points out the essential elements of the control process in his definition of control, he says. “Management control is a systematic effort to set perform objectives, to design information feedback system, to compare actual performance with these predetermined standards...to measure their significance and take any action…’’ Controlling in an organization is a process which begins at the planning stage where the organizations objectives, and standards for comparing them are set. There are types of standards used in Canadian Tire; output standards which measure performance results as quantity produced, cost incurred in producing the product, time taken, the quality of the output, and Input standards which measure work efforts or the number and quality of personnel, raw materials or equipments that go into a performance task. The second process of controlling is measurement. Once the activities of the organization have been performed, the output must be measured accurately so that the deviations and variances from actual and the set standards can be determined without error. As Henri Fayol (2004) states, “Without measurement effective control is not possible.” So it is to the Canadian Tire. The third process is comparing the measurement results, which is the actual output with the already set objectives and the desired results. After the comparison, then the appropriate action is taken depending on the outcome. The most used ways of comparison by the Canadian Tire managers is through benchmarking and historical, relative or engineering. The last part of the process is taking appropriate corrective measure or action. Any deviation or variance from comparison can be positive or negative. Mostly it is the negative variations which need correction measures immediately as they hinder the organization from achieving its set objectives. The positive variations may also have an important communication to the organization as to whether; it is doing very well, or it had set its objectives and standards very low. Therefore, any variation must be interpreted very well and then the appropriate action is to be taken so that the organizations objectives are met. When corrective measures are done appropriately, it saves the organizational resources, time and money, and it also ensures effective and efficient utilization of resources. The first is control used by the preliminary control. This is sometimes called a feed-forward controls because they applied and accomplished before the actual activity starts. It ensures that proper directions are established, and appropriate resources are available so as to achieve the set objectives. The second type is concurrent control. This focus on what happens during the work process. They monitor the organizational operations and activities to ensure that things are being done correctly as planned. Then, the last type of control is post action. Sometimes referred to as feed backward loops, these are the results of the outcome of an action. Besides, managers have two broad options with the respect to control. They can rely on people to exercise self control (internal) over their own behavior or use external measures such as rules and policies to control and rectify the behaviour of others. Internal controls allow motivated individuals to exercise self-control in fulfilling job expectations. The potential for self control is uplifted when people understand the organizational objectives clearly, and appropriate resources are a located to them. While external control occurs through personal supervision and the use of formal administrative system such as performance appraisal systems, employee disciplines system, compensation and benefits system and management-by-objectives. There are various control systems that are being used by the Canadian Tire. These systems are: management processes such as performance appraisal, selection and training of new employees, formulation of the organizational policies and procedures and performance modeling, norms an organization culture, Compensation benefits; this attract talented people and retain them in the organization. It also involves motivating people to exert maximum effort in their performance work, recognizing the value of their performance contribution. And employee discipline system; discipline is defined as the in fluency behavior through reprimand. Progressive discipline is where people involve more positively and directly in making decisions so as to improve their behavior. To be effective, discipline should be immediate, consistent, support realistic rules, focus activity, not personality, informative and occur in a supportive setting; Information and financial control system. Canadian Tires controls its information and financial activities through information and financial control system. Which controls the activity-based costing; this is the actual cost of all goods and services and any value addition to the organizations products and services which examine the value added by all the activities and understanding the implication, meaning and interpretations of key financial measures such as ratios of the organizational performance. Canadian Tire also carries operations and management control. This control system is of three parts namely; purchasing, project management and statistical quality control. Purchasing control is concerned with economic order quantity and automatic reorder points. This is a situation where when the quantity of the products reduces to a certain level (reorder point) then appropriate amount of the product is replenished with a certain amount of the product(order quantity) so as the product is at the required level. It also involves Just- in-Time scheduling. This is a situation where the products are only being produced when the order is placed. The purchases are made immediately the order for the products is received. Project management is another operations management and control which is being used by the Canadian Tire Corporation. It uses Program Evaluation and Review Technique (PERT). Which identifies and controls the many separate events in complex projects. Besides, Canadian Tire uses statistical quality control. This is where upper and lower control limits are set and monitored at given intervals of time to ensure that the products are to the standards. For examples, at Canadian Tire, automotive parts that do not meet the set standards are picked out or removed from the system as defective. In conclusion, Canadian Tire uses control as one of the functions of management so as to improve its operations and to meet its set objectives. This has helped the corporation to move from its infant stage to the top where it standards in Canadian Economy. Without a good control process, an organization cannot make any steps forward as it will be confused on its objectives and more so will not utilize its resources effectively and efficiently hence leading to its collapse. References Harold Koontz, Cyril O’Donnell (1955). The Principle of Management. New York: McGraw-Hill Book Company. Henri Fayol (2004). Industrial and General Administration. New York: Mc Graw- Hill Book Company. McBride, Hugh, (1997). 75 Years of Canadian and Canadian Tire, Toronto. Quantum Book Group, 127p. Robert J. Mockler (1970). Reading in Management Control. 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