Unit 4: Control and modern management techniques

Controlling is measuring and correcting the performance of subordinates to make sure that enterprise objectives and plans are accomplished (Koontz).

Nature and importance

• Goal-oriented, continuous, pervasive, forward-looking and backward-looking.
• Accomplishes goals, judges accuracy of standards, makes efficient use of resources, improves motivation, ensures order and discipline, facilitates coordination.

• Critical point control: focus on key result areas.
• Management by exception: only significant deviations are reported to top management.
• Types: feed-forward (preventive), concurrent, feedback (post-action).
• Techniques: budgetary control, standard costing, ratio analysis, break-even analysis, PERT/CPM, management audit, MIS.
• Relationship between planning and controlling: planning sets standards; controlling checks performance against them — "planning without control is meaningless and control without planning is blind".

• Theory Z (William Ouchi, 1981): combines American and Japanese practices — long-term employment, collective decision-making, individual responsibility, slow evaluation and promotion, informal control with formal measures, moderately specialised careers, holistic concern for employees.

• Rooted in Confucian values — hierarchy, harmony, respect for authority, family orientation; guanxi (relationship networks) central to business; paternalistic leadership; collectivism and face (mianzi); state influence in strategic sectors.
• Modern features: rapid decision-making in private firms (Alibaba, Huawei), long-term orientation, pragmatic adaptation of Western practices, emphasis on scale and speed.

• BPR (Hammer and Champy, 1993): "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance — cost, quality, service and speed."

• Business outsourcing: contracting non-core activities (IT, payroll, customer service, manufacturing) to external providers — BPO, KPO, ITO; benefits — cost, focus on core competence, access to expertise, flexibility; risks — loss of control, quality and security issues, dependency. India is a global leader in IT-BPM services.

• Knowledge management (KM): creating, capturing, sharing and using organisational knowledge — tacit (in people's heads) and explicit (documented).

• KM tools: intranets, knowledge repositories, communities of practice, expert directories, lessons-learned databases, AI search.
• E-business management: using internet technologies across the value chain — e-commerce, e-procurement, CRM, SCM, ERP, collaboration platforms; requires digital strategy, cyber security, data management and new skills.