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Control is an indispensable part of management. However it is often confused with other similar terms like integration, power, manipulation etc. There is also scope for confusing management and control as equivalent i.e. management is inclusive of Control and hence it not being considered as a separate entity of study. (Child, 2005) The English definition of control is "theÂ actÂ orÂ powerÂ ofÂ controlling;Â regulation;Â dominationÂ or command" (Dictionary.com). The definition of Control can be tweaked to suit an organizational structure as "Control is the regulation of organizational activities so that some targeted element of performance remains within acceptable limits" (http://courses.washington.edu/inde495/lecg.htm). The main purpose of control is to increase efficiency and attainment of goals, whilst making sure the resources consumed are minimal. There are many different methods of exercising control; they can be broadly classified as conventional methods and the newer approaches. In this essay we will look at the newer approaches to control and also whether these approaches would be suitable enough in Indian organizations.
APPROACHES TO CONTROL
The conventional methods of control are still in practice in a majority of organizations across the world, especially in public services and the large organizations. Few such approaches are Personal supervision, centralization, bureaucracy and electronic surveillance. The basic reason behind exercising such methods of control is standardization. The top level management expects things to be predictable and to be within a set of rules and conducts. It is an inflexible and formal control mechanism and is heavily reliant on Hierarchical authority.
On the other hand, the newer approaches to control are designed to be flexible and more informal. Many new age organizations led by budding business leaders are increasingly inclined towards adopting these control mechanisms. Output Control, Decentralization, Cultural control and HRM control are few such approaches. These mechanisms work on the principles of fostering innovation and are more market driven. John Child (2005) suggests that these newer philosophies also indulge in the value of human capital and also in managing the employees through monitoring how they achieve goals rather than laying down stringent rules and other direct supervision methods.
It is not possible to argue whether one approach is better than the other or vice versa. Both conventional as well as newer approaches have their own advantages and it is the choice of the organizations to choose the approaches to control which is relevant to them.
NEWER APPROACHES TO CONTROL, ADVANTAGES AND ITS IMPLICATIONS IN INDIAN ORGANIZATIONS
In today's increasingly enterprising business environment, many organizations are opting for the newer approaches to control. There has been a tendency to shift towards a more liberal, decentralized and market driven organization, moving away from the traditional rigid organizational structure. This is mainly due to the constantly changing needs of customers and unpredictable, frequent changes in business regulations. Focus is slowly shifting more into getting the job done rather than setting a number of rules for getting the job done. Few advantages of decentralizing organizations can be listed as follows - Speedier and efficient decision making, employee empowerment, self-actualization for individuals, decrease in burden of work etc. (Chris Joseph).
In India, where majority of organizations are state-owned and hence are completely hierarchical. However the newer organizations led by the younger generation of business leaders are opting for flat organizations. A leading retail outlet, Big Bazaar, is a premier example of an organization which has adopted flexible methods of control and is an immensely successful firm (Biyani, 2006). Other newer organizations like makemytrip.com and bharatmatrimony.com have also adopting more relaxed approaches to control.
The different approaches to control are as follows.
This method of control is among the most reliable and also the most transparent. This strategy depends on being able to identify tasks or jobs which has a measurable output. It may not necessarily be the end product but can also be other benchmarks such as number of sales in a day for salesman, targets set by an organization in a financial year or financial quarter, etc. The main advantage of this method is that the employees are free from unnecessary comprehensive control and gives them freewill to do jobs on their own accordance. The main focus is on improving performance, which is influential for the long-time good of any organization. It also cuts down on the unnecessary costs involved in personal supervision and other methods of bureaucratic control. Output control is hence definitely among the better approaches of control especially among the newer organizations.
However it also has a few complications in its implementation. The freedom given to the employees may have a negative effect, as not all of them may agree with such changes brought in to the system. Another technical difficulty related to this method would be deciding on appropriate measures of output. For instance, it is not possible to measure the output of a receptionist in a hotel as one cannot determine the number of guests in a day. Hence, output control cannot be exercised in such cases.
Decentralisation is the dissolution of powers and spreading responsibility across to the lower level managers, rather than the complete control exercised by the top-level management. This relieves the top layer of management from a heavy load of burden and also gives the freedom and increased decision making powers to the lower level employees. This in turn increases the job satisfaction and boosts the morale of employees, as they get a sense of participation and involvement in the overall functioning of the organization. Decision making is much faster and so is communication within the firm, owing to the fewer levels of organization. Another advantage of decentralisation can be increased managerial skills for the subordinate managers, as they often are involved in making judgements, which would not have been the case in centralized organizations (Bakshi).
Looking into the negative aspects, Decentralization can lead to increased administrative costs and expenses. With more people involved in the decision making process, it increases the chances of conflicts and reaching a consensus may not always be feasible. Hence Coordination among the peers becomes a major issue.
Organizational culture can be defined as "A system of shared meaning held by members that distinguishes organizations from other organizations " (Stephen P.Robbins, Timothy A.Judge, Seema Sanghi, 2009). It gives the organizations an individual identity and makes it stand out of the crowd. It involves control of employees by means of conforming to internal standards and regulations set by the firm rather than external constraints (Child, 2005). Cultural Control brings a sense of uniformity and consistency into the firm. It is an intangible asset to the organizations. Few organizations which have strong corporate cultures are Wal-Mart, Southwest Airlines, Hewlett Packard, Google etc. (El-Nadi).These cultures are often associated with high sociability and an enjoyable work environment. There is an increased trust among the employees which can have a direct impact on the productivity of the organization. A strong cultural control in a firm can be a substantial competitive advantage over its competitors.
However, on the downside, Organizational culture is not something which can be inculcated in any firm as a sudden change. It is an evolutionary process. There is always scope for newer employees finding it difficult to adjust to the needs of the corporate culture. These negatives can easily be looked upon considering that there have been more instances of Cultural control having a positive impact and not negative. The increased flexibility and autonomy, along with a definitive directed approach among the employees, makes this form of control among the best methods to move away from the conventional organization.
Human Resources Management Control is another of the newer approaches increasingly being adopted by a growing number of organizations. All HRM practices within a firm are manipulated as such that they can be a form of control. Right from the recruitment procedures to the actual workplace practices, the control methods are setup in place in accordance to the needs of the individual organizations. It is implicit that the success or failure of an organization is closely linked to how the employees are managed and hence human resource management is an integral function in any firm. The recruitment process of new individuals is always carried out with intentions to improve the organizations. Also the employees and managers are given appraisals for good performances at regular intervals (Child, 2005). These appraisals are means to increase motivation among employees and hence create a much better work environment.
HRM Control strategies are not just an effective way to control the individual's performance and behaviour but also an effective strategy in acquirement and development of employees in a firm. It is another highly effective approach to control, which is being adapted by most of the organizations in the current environment.
RELEVANCE OF NEWER APPROACHES TO CONTROL IN INDIAN ORGANIZATIONS
India is traditionally an immensely hierarchical society. This is heavily reflected in the management styles and the organizational structure of a majority of Indian organizations. (indian Management Style) In addition to this, most of the Indian firms are state-owned; hence the bureaucratic environment becomes implicit. The common nature of management in Indian firms is explicitly following the orders or instructions of the top level management, even if the instruction seems incorrect.
According to Hofstede's cultural dimensions theory, the cultural differences between nations can be identified based on the following five dimensions - Power/Distance (PD), Individualism (IDV), Masculinity (MAS), Uncertainty/Avoidance Index (UAI) and Long Term Orientation (LTO (Hofstede, 2009)). The following graphs show the difference in these dimensions in India when compared to world average.
As evident from the above graphs, the Power/ Distance index of India is 77 which is remarkably high when compared to the world average of 56. This indicates high inequality in power distribution in the society, which is reflected in the organizations as well. The other indices are also indicative of the vast differences in the organizational structure and culture in India as compared to other nations in the world.
It is hence quite justifiable to assume that introducing the newer approaches into firms in India may not have an entirely positive effect. The vast cultural differences and the inherent bureaucratic structure in the Indian system are huge resistors to bringing out such changes in the organizations. However, with rapid evolutionary changes in the business environment of the world, it is becoming imperative for Indian firms to adapt accordingly and bring in more innovation into their businesses. Bringing on these changes is not possible in the current scenario due to the arcane management methods of the present Indian firms (Radjou, 2008). This stifles the creativity and does not allow even the most innovative of employees to work on their own accord. Thus to ensure that Indian firms do not fall behind the global standards of competitiveness, the newer approaches of control, must be introduced to bring in the required flexibility and freedom. Even though there maybe resistors to change and employees may find it hard to adapt in the initial stages, it will be highly beneficial in the longer run.
Another important line of consideration would be that India is the youngest country in the world. It has the biggest proportion of population under the age of 26, which implies the humongous working age population present in India. This younger generation, which forms a large part of the actual workforce in India, require more flexibility and freedom in their workplaces. They may not be able to adjust with the traditional control mechanisms and hierarchically structured organizations. So it is quite possible that they may not work too long in such organizations and would prefer changing to a much more flexible firm. The younger generation would definitely prefer an organization with a flatter structure and a non- bureaucratic structure. They would like to work in an environment which gives them an increased decision making power and also the freedom to work on their own accord rather than being bound by rules and regulations. Hence the newer approaches to control will be of significant relevance here. Measures like output control, Cultural control, decentralisation etc. which gives them enough participative power and flexibility, should be introduced into the firms. Such measures can go a long way in increasing the global competitiveness of Indian organizations and also in fully utilising the potential and capabilities of the employees.
Few Indian organizations have already understood the immense benefits of such newer control methods. Taking the example of Nokia India- It promotes the idea of 'Community Based Innovation'. It implies that the employees themselves are involved in the idea forming and commercialization of even entirely new product lines. This gives the employees a sense of satisfaction and achievement. It is to be noted that Nokia India has among the lowest attrition rates among all Indian organizations (Radjou, 2008). This can be attributed to the highly flexible nature of the organization. It is evident from this illustration that more and more Indian companies should do away with the traditional control methods and hierarchical structures, and start adopting the newer approaches to control.
Control is an extremely important aspect of management and is an inherent part of any organization. The notion of discussion is the methods of control, i.e. how is control exercised in all organizations. There has been a tendency in the recent past to move away from the traditional, hierarchical and bureaucratic methods of control as these tend to suppress freedom and creativity of the individuals and has shown a negative effect on the development of an organization. Newer and more flexible approaches to control such as decentralisation, Output Control, HRM Control and Cultural Control to name a few are all gaining in voice now. However, completely shunning away from hierarchical authority is not the way forward, as for any organization some amount of control is needed from the higher management to ensure the smooth functioning of the firm. Hence an organization must integrate a right mix of control methods keeping in mind the benefits for the firm as well as the employees
Integrating the newer approaches of control into Indian organizations is a much tougher proposition as compared to other countries. This is owing to the traditional values of the Indian Society which is heavily reflected in the Indian organizations as well. But due to the huge working age population of India and increasing needs to build global enterprises, it is becoming more and more important for Indian firms to adapt these newer control methods. There is a need for increase in innovation and competitiveness among the organizations which is not easy to achieve with a traditional hierarchical authority. Hence in the future, there will be a spurt in the proportion of Indian organizations abstaining from traditional methods of control and moving towards more flexible methods.