This unit covers control systems, the control process, types and characteristics of effective control, barriers to controlling, and quality control concepts including TQM.
Concept of Control
Meaning of control
Control is the process by which management ensures that resources are obtained and used effectively to accomplish objectives. It measures actual performance against planned performance and takes corrective action if there's any deviation.
Planned (standard) performance is the expected result; actual performance is what's actually completed. The basic function of controlling is to achieve predetermined goals within a stated time and standard, making it the key to implementing any plan.
Notable definition
Decenzo and Robbins: Control is the process of monitoring activities to ensure they are being accomplished as planned and of correcting any significant deviations.
Why controlling is an important function of management
Efficient implementation: Plans deal with an uncertain future, so control is the only means to ensure plans are properly implemented and to keep performance on track by determining variations.
Guides in achieving goals: Control provides standards for appraising actual performance and feeds back information for remedial action, guiding subordinates toward goals.
Assists coordination: Adequate controls coordinate activities and bind various departments, individuals, and their efforts toward common goals through unity of direction.
Delegation and decentralization of authority: Effective control facilitates delegation and decentralization, since dispersed decision-making authority can't work without adequate control.
Simplifies supervision: Control identifies deviations between standard and actual performance, keeping employees disciplined and reducing the need for constant orders and guidance.
Process / Steps in the Control Process
The four basic steps
Set control standards: Standards are the expected level of performance targeted within a given budget and time, often derived directly from objectives. They should be easy to measure and defined on the basis of service, units, hours, quality, or measurement.
Measure actual performance: Gather data on actual performance to detect problem areas. This is the phase of evaluation, appraisal, or assessment, and it also helps predict future deviations.
Compare actual performance with standard: Identify deviations by comparing actual results against the standard. The deviation is the difference between what was planned and what was achieved, revealing strengths and weaknesses.
Take corrective action: If standards aren't met, find the cause of the deviation and correct it. Corrective action may involve modifying original standards or work procedures, addressing internal or external factors.
Types of Control Systems
The three main types (by timing)
Pre-control system (feedforward control): Takes place before the operation starts to prevent anticipated problems. Management uses policies, procedures, rules, and standards to anticipate deviations and take corrective precautions before output is affected. It requires timely, accurate information that can be difficult to develop.
Concurrent control system: Takes place while an activity is in progress, detecting problems as they occur. When a manager directly observes an employee's actions, they can correct problems immediately. It's widely used in manufacturing, inventory, and quality control to prevent defective output.
Post-control system (feedback control): Takes place after the action is completed, based on information feedback. Managers analyze deviations from planned results and adjust future action accordingly. It's used in quality control, financial statement analysis, standard cost analysis, and performance evaluation.
Characteristics of an Effective Control System
Main features
Suitability: The control system must fit the organization's nature, type, size, and requirements—a large organization's system differs from a small one's.
Simplicity: The system must be simply designed so it's easy to understand and operate, avoiding unnecessary complexity.
Objectivity: It must meet the organization's objectives and ensure actual performance matches the defined standards.
Economical: It must be within the organization's financial capability, with outcomes (benefits) higher than the cost of control.
Flexibility: It must adapt to changing environments and be modifiable according to time and situation.
Responsibility-based: It must point out the responsibility of every department and employee, helping take timely steps.
Suggestive: Beyond finding deviations, it should suggest remedial steps to overcome weaknesses in actual performance.
Forward-looking: An effective system anticipates future problems rather than only reacting to past ones.
Barriers and Problems of Control
Potential barriers to successful controlling
Over-control: Controlling employees beyond business purpose—such as their dress, family, or friends—irritates and demotivates them.
Inappropriate focus: When focus shifts from the primary task of producing quality output to secondary things like rewards and vacations, control is lost.
Rewards for inefficiency: Rewarding inefficiency demotivates everyone—efficient employees stop trying and inefficient ones don't push harder.
Too much accountability: Making employees accountable for every mistake makes them resist control and lose motivation.
Problems of the control system
Over-control: Unnecessary pressure and limits on employee freedom affect their behavior negatively.
Problem in fixing standards: Qualitative factors like employee morale, customer response, and attitude are hard to measure accurately, making it difficult to judge right from wrong.
Resistance: People resist controls imposed without understanding their behavior; management must communicate about control before introducing it.
Rigidity: Rigid rules and procedures defeat control's purpose and hamper employee creativity.
Reward for inefficiency: Rewarding without regard to efficiency causes other employees to resist the reward system.
Delay in reporting: Without the right information at the right time, managers can't evaluate performance or take timely corrective action; invalid reported information also creates problems.
Techniques of Control (Financial)
Tools to monitor and control financial matters
Financial statements: Used to evaluate financial performance—including the balance sheet (assets, liabilities, equity), profit and loss statement (income and expenses), cash flow statement (inflows and outflows), and financial ratios (liquidity, leverage, profitability).
Break-even analysis: Determines the break-even point where cost equals revenue, estimating the output and sales needed to earn profit. Profit comes only when sales exceed the break-even point—a very useful tool in manufacturing.
Financial audit: A systematic, periodic examination of the accuracy and legitimacy of financial statements. Internal audit (by finance department staff) detects and rectifies errors early; external audit (by hired professionals) is done at year-end to verify accuracy and safeguard owners' interests.
Management Information System (MIS)
MIS is a network established within an organization to provide managers with summarized information that assists decision-making. It's a formal way of collecting information so managers can monitor performance and control activities.
Concept of Quality
Meaning of quality
Quality is a sense of appreciation that a product or service is better than others. Customers perceive it by evaluating dimensions like performance, reliability, and durability—and importantly, quality is determined by customers, not producing firms.
Quality and productivity have become major determinants of business success or failure today, so management should focus on better quality at competitive prices.
Notable definition
American Society for Quality Control: Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
Characteristics of quality
Sophistication and durability in the product.
Effective leadership with a new vision.
Focus on customer satisfaction.
Factors affecting quality
Policy / management support: Quality results only when top management formulates quality-driven policy and commits to it—not just slogans.
Information availability: Right information supports better strategy; competitive benchmarking helps obtain customer needs and competitors' quality standards.
Materials: Quality output needs quality raw materials, so firms set standards and use pre-control to prevent inferior materials and maintain long-term relationships with better suppliers.
Machine / methods and engineering design: Advanced, automatic machines, software, and robotics create consistent, uniform output; product engineering and design avoid defective production.
People: Better people produce better results—well-trained, experienced, and dedicated employees contribute more to quality.
Process of Improving Quality
The three stages
Quality planning: A document specifying quality standards, practices, resources, and the sequence of activities for a product or service. It includes establishing quality goals, identifying customers, discovering their needs, and developing product and process features.
Quality control: The systematic control of variables in the manufacturing process that affect the end product's excellence, ensuring processes perform acceptably. Its steps are establishing standards, measuring quality, analyzing deviations, and taking corrective action.
Quality improvement: A systematic, formal approach to analyzing and improving performance, with the primary goal of improving outcomes. It involves proving the need, identifying projects, organizing teams, diagnosing causes, and changing and controlling.
Total Quality Management (TQM)
Meaning of TQM
TQM is a strategic commitment by top management to change its whole approach to business so that quality becomes a guiding factor in everything it does. It provides an umbrella under which everyone in the organization works hard to create customer satisfaction.
TQM consists of three qualities: quality of return (to satisfy shareholders), quality of products and services (to satisfy consumers), and quality of life at work and outside (to satisfy the organization's people). It ensures things are done right the first time, eliminating defects and waste.
Notable definition
Robert Kreitner: TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction.
Tools of TQM
Benchmarking: Searching for the best practices among competitors and comparing the organization's own products and processes against the very best to examine what drives excellent performance.
Outsourcing: Subcontracting some jobs to another organization or professional to gain the benefits of specialization, reduce cost, and improve quality.
Speed (reducing cycle time): The time required to perform an activity across development, production, and distribution. Increasing speed gives a strategic advantage and completes tasks more effectively.
ISO 9000: International standards set by the International Organization for Standardization. Firms meeting these standards apply for certification and are audited; in
Kaizen
Kaizen was developed by Japanese philosopher Masaaki Imai in 1986, building on Deming's Plan-Do-Check-Act cycle. It combines two Japanese words—"Kai" (change) and "Zen" (good/betterment)—meaning continuous improvement in all things. It assumes every aspect of life deserves constant improvement and focuses on small jobs rather than big ones.
Deming Management — Principles and Techniques
About Deming
William Edwards Deming was an American mathematician and consultant who developed statistical process control techniques during World War II. His principles and techniques changed how people think about quality, management, and leadership.
Deming's principles
Quality improvement drives the entire economy: It increases productivity and efficiency by eliminating waste.
The customer always comes first: Satisfied customers are the essence of business success, so business should meet their expectations.
Do not blame the person, fix the system: Quality problems come from the system, which must be fixed rather than blaming individuals.
Plan-Do-Check-Act (PDCA): Management plans, identifies problems, monitors corrective measures, and takes proactive steps.
Continuous improvement: Achieved through training, teamwork, and self-improvement.
Deming's techniques for quality management
Create constancy of purpose: Maintain constant effort to improve products and services.
Adopt the new philosophy: Practice a new culture and use advanced technology to improve quality.
Cease dependence on inspection: Build quality in from the start rather than inspecting for faulty products afterward.
Seek continuous improvement: Continuously improve production, service, and other activities to raise quality and lower cost.
Avoid the search for lowest-cost supplier: Don't buy from the cheapest suppliers, as they don't ensure quality materials.
Institute modern methods of training: Provide regular, modern on-the-job training so everyone has adequate skills.
Institute leadership: Manage people with new leadership suited to changing situations.
Drive out fear: Create a fearless workplace where workers freely express their views.
Promote teamwork: Encourage group effort and break down bureaucratic barriers between departments.
Additional techniques include avoiding slogans and numerical quotas, removing barriers to pride of workmanship, running education and self-development programs, and making transformation everybody's job.
Related Concept: Quality of Work Life (QWL)
Quality of work life is the quality of the relationship between employees and their total working environment. Its purpose is to integrate employee needs and well-being with the intention of improving productivity and job satisfaction, emphasizing a quality working environment for employees.
Important Questions and Solutions
Exam-style questions with solutions for this unit.
1. Give the concept of total quality management. (2083)
Total Quality Management (TQM) is a strategic commitment by top management to change its whole approach to business so that quality becomes the guiding factor in everything the organization does. According to Robert Kreitner, TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction.
- Three qualities: TQM covers quality of return (for shareholders), quality of products and services (for consumers) and quality of work life (for employees).
- Right the first time: it aims to do things right the first time, eliminating defects and waste. Its tools include benchmarking, outsourcing, speed and ISO 9000
2. Show the relationship between digital dimensioning and control. (2083)
Digital dimensioning means bringing digital technology into every part of an organization, including its operations, communication, customer service and decision-making. Control is the process of measuring actual performance against standards and taking corrective action. The two are closely related, because digital tools make every step and type of control faster, more accurate and more continuous.
The relationship can be shown as follows:
- Setting standards: digital data and analytics help managers set realistic, measurable standards based on past performance and market data, instead of guesswork.
- Measuring performance: software, sensors, point-of-sale systems and ERP systems record actual performance automatically and in real time. For example, a supermarket’s billing system records sales every minute.
- Comparing with standards: dashboards and reports compare actual results with standards instantly and highlight deviations, so managers do not have to calculate them manually.
- Taking corrective action: quick digital alerts allow managers to act on deviations immediately, before small problems grow.
- Feedforward control: digital forecasting and data analytics help anticipate problems before operations start. Examples include predicting demand or spotting poor-quality supplier materials in advance.
- Concurrent control: real-time monitoring of production lines, inventory and service delivery lets managers correct problems while work is in progress.
- Feedback control: digital financial statements, ratio analysis and performance reports make post-action evaluation faster and more accurate.
- Management Information System (MIS): MIS gives managers summarized information for decision making and control. Digital technology makes it the backbone of modern control.
- Financial control and audit: accounting software and digital payment systems such as eSewa and Khalti leave clear transaction records. These records make internal and external audits easier and reduce fraud.
- Quality control: digital machines, software and robotics produce consistent, uniform output and track defects. This supports TQM and continuous improvement (Kaizen).
Digital dimensioning strengthens control by making information timely, accurate and accessible. Digitalization therefore turns control into a continuous, real-time process.
3. Define control. Discuss the essentials of effective control system and explain in the basic steps in control process. (2082)
Control is the process by which management ensures that resources are obtained and used effectively to accomplish objectives. It measures actual performance against planned performance and takes corrective action whenever there is a deviation. According to Decenzo and Robbins, control is the process of monitoring activities to ensure they are being accomplished as planned and of correcting any significant deviations. Control is the key to implementing any plan, because it ensures that predetermined goals are achieved within the stated time and standard.
The essentials of an effective control system are:
- Suitability: the control system must fit the organization’s nature, type, size and requirements. For example, the control system of a large company such as Nepal Telecom differs from that of a small retail shop.
- Simplicity: the system should be simply designed so that it is easy to understand and operate, without unnecessary complexity.
- Objectivity: the system must serve the organization’s objectives and ensure that actual performance matches the defined standards.
- Economy: the system must be within the organization’s financial capacity, and the benefits of control must exceed its cost.
- Flexibility: the system must adapt to a changing environment and be modifiable according to time and situation.
- Responsibility-based: the system should clearly identify the responsibility of every department and employee, so that timely steps can be taken.
- Suggestive: beyond finding deviations, the system should suggest remedial steps to overcome weaknesses in performance.
- Forward-looking: an effective system anticipates future problems rather than only reacting to past ones.
- Timely reporting: information about deviations must reach managers on time, because delayed reporting prevents timely corrective action.
- Focus on strategic points: control should concentrate on the critical areas that matter most to performance, instead of trying to control everything.
The basic steps in the control process are:
- Set control standards: standards are the expected level of performance within a given budget and time, usually derived from objectives. They should be easy to measure and expressed in terms of units, hours, quality or service. For example, a factory may set a standard of 1,000 units per day.
- Measure actual performance: data on actual performance is gathered to detect problem areas. This is the stage of evaluation, appraisal or assessment, and it also helps predict future deviations.
- Compare actual performance with the standard: actual results are compared with the standard to identify deviations. The deviation is the difference between what was planned and what was achieved, and it reveals strengths and weaknesses.
- Take corrective action: if standards are not met, the cause of the deviation is found and corrected. Corrective action may involve improving work procedures, training staff or, if the standard was unrealistic, modifying the standard itself.
- Feedback for the future: the results of corrective action are fed back into planning, so the control process works as a continuous cycle.
An effective control system that is suitable, simple, economical, flexible and forward-looking, applied through these steps, ensures that plans are implemented properly and organizational goals are achieved.
4. Enlist the process of communication. (2082)
Communication is the process of transmitting and exchanging ideas, information and feelings between two or more persons. Its process consists of the following elements are below :
- Sender: the person who initiates the message.
- Message: the idea, information or feeling to be shared.
- Encoding: turning the message into words, symbols or pictures.
- Medium: the channel used, oral or written.
- Decoding: the receiver’s interpretation of the message.
- Receiver: the person who receives and acts on the message.
- Feedback: the receiver’s response, which shows whether the message was understood.
- Noise: any disturbance that interferes with communication.
5. Mention any four characteristics of control system. (2081)
An effective control system possesses certain features that make it useful to the organization. Four of them are:
- Suitability: the control system must fit the organization's nature, type, size, and requirements.
- Simplicity: it must be simply designed so it is easy to understand and operate.
- Economical: its benefits must be higher than the cost of operating the control.
- Flexibility: it must adapt to changing environments and be modifiable according to time and situation.
6. What is total quality management? Explain the tools used for total quality management. (2081)
Total Quality Management (TQM) is a strategic commitment by top management to change its whole approach to business so that quality becomes a guiding factor in everything it does, providing an umbrella under which everyone in the organization works to create customer satisfaction. According to Robert Kreitner, TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction. It consists of three qualities — quality of return, quality of products and services, and quality of life at work — and ensures things are done right the first time.
The main tools used for TQM are explained below:
- Benchmarking: searching for the best practices among competitors and comparing the organization's own products and processes against the very best to examine what drives excellent performance.
- Outsourcing: subcontracting some jobs to another organization or professional to gain the benefits of specialization, reduce cost, and improve quality.
- Speed (reducing cycle time): reducing the time required to develop, produce, and distribute a product, since increased speed gives a strategic advantage and completes tasks more effectively.
- ISO 9000: international standards set by the International Organization for Standardization; firms meeting these standards apply for certification and are audited, and in Nepal the Nepal Bureau of Standards and Metrology grants ISO 9000 certificates.
- Kaizen: developed by Masaaki Imai, meaning continuous improvement in all things ("Kai" = change, "Zen" = betterment), focusing on small, constant improvements.
- Deming's PDCA cycle: the Plan-Do-Check-Act approach to continuously plan, implement, monitor, and correct quality activities.
In conclusion, TQM builds a culture of continuous improvement, and tools like benchmarking, outsourcing, speed, and ISO 9000 help the organization achieve quality and lasting customer satisfaction.
7. Point out two types of control system. (2080)
Control systems are classified by their timing relative to the operation. Two types are:
- Pre-control system (feedforward control): takes place before the operation starts, using policies, procedures, rules, and standards to anticipate deviations and take corrective precautions before output is affected.
- Concurrent control system: takes place while an activity is in progress, so the manager can directly observe actions and correct problems immediately — widely used in manufacturing, inventory, and quality control.
8. What is total quality management? Explain the techniques of Deming management. (2080)
Total Quality Management (TQM) is a strategic commitment by top management to change its whole approach to business so that quality becomes a guiding factor in everything it does, creating an umbrella under which everyone in the organization works to satisfy customers. According to Robert Kreitner, TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction.
The techniques of Deming management for achieving quality are explained below:
- Create constancy of purpose: maintain a constant effort to improve products and services over the long term.
- Adopt the new philosophy: practice a new quality culture and use advanced technology to improve quality.
- Cease dependence on inspection: build quality in from the start rather than inspecting for faulty products afterward.
- Seek continuous improvement: continuously improve production, service, and other activities to raise quality and lower cost.
- Avoid the search for lowest-cost supplier: do not buy from the cheapest suppliers, as they do not ensure quality materials.
- Institute modern methods of training: provide regular, modern on-the-job training so everyone has adequate skills.
- Institute leadership: manage people with new leadership suited to changing situations.
- Drive out fear: create a fearless workplace where workers can freely express their views.
- Promote teamwork: encourage group effort and break down bureaucratic barriers between departments.
In conclusion, TQM builds a quality-driven culture, and Deming's techniques — from constancy of purpose to teamwork and driving out fear — provide the practical means to achieve continuous quality improvement.
9. Define quality (2079)
Quality is a sense of appreciation that a product or service is better than others, which customers perceive by evaluating dimensions like performance, reliability, and durability — and importantly, quality is determined by customers, not by the producing firms. According to the American Society for Quality Control, quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
10. Define total quality management. Describe the tools of TQM. (2079)
Total Quality Management (TQM) is a strategic commitment by top management to change its whole approach to business so that quality becomes a guiding factor in everything it does, providing an umbrella under which everyone in the organization works to create customer satisfaction. According to Robert Kreitner, TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction. It consists of three qualities — quality of return to satisfy shareholders, quality of products and services to satisfy consumers, and quality of life at work to satisfy the organization's people.
The tools of TQM are described below:
- Benchmarking: searching for the best practices among competitors and comparing the organization's own products and processes against the very best to examine what drives excellent performance.
- Outsourcing: subcontracting some jobs to another organization or professional to gain the benefits of specialization, reduce cost, and improve quality.
- Speed (reducing cycle time): reducing the time required to develop, produce, and distribute a product, since greater speed gives a strategic advantage and completes tasks more effectively.
- ISO 9000: international standards set by the International Organization for Standardization; firms meeting these standards apply for certification and are audited, with the Nepal Bureau of Standards and Metrology granting ISO 9000 certificates in Nepal.
- Kaizen: developed by Masaaki Imai, combining "Kai" (change) and "Zen" (betterment) to mean continuous improvement in all things, focusing on small, constant improvements. (related concept in your notes — supporting addition)
- Deming's PDCA cycle: the Plan-Do-Check-Act approach used to continuously plan, implement, monitor, and correct quality activities.
In conclusion, TQM makes quality the guiding factor of the whole organization, and tools like benchmarking, outsourcing, speed, and ISO 9000 help it deliver continuous improvement and customer satisfaction.
11. Define total quality management. (2078)
Total Quality Management (TQM) is a strategic commitment by top management to change its whole approach to business so that quality becomes a guiding factor in everything it does, providing an umbrella under which everyone in the organization works to create customer satisfaction. According to Robert Kreitner, TQM is creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction. It ensures things are done right the first time, eliminating defects and waste.
12. State any four tools of total quantity management (2077)
The main tools of TQM are:
- Benchmarking: comparing the firm's products and processes against the best competitors.
- Outsourcing: subcontracting jobs to specialists to cut cost and raise quality.
- Speed (reducing cycle time): shortening development, production, and distribution time for strategic advantage.
- ISO 9000: meeting international quality standards and gaining certification.
13. The major problem of the Nepalese business organization is the inability of maintaining the quality of the products. Do you think that Deming’s principle of quality management can help to solve the problem of quality inconsistency in the Nepalese business organization? Explain. (2077)
Deming's principles of quality management, developed by the American mathematician and consultant William Edwards Deming, changed how people think about quality, management, and leadership, and they can be strongly applied to solve the quality inconsistency faced by Nepalese business organizations. The statement can be discussed as follows:
- The problem in Nepalese organizations: many Nepalese firms fail to maintain consistent product quality due to weak systems, poor materials, untrained people, and lack of management commitment — a genuine barrier to competitiveness.
- Quality improvement drives the entire economy: Deming's view that quality improvement raises productivity and efficiency by eliminating waste directly addresses the inefficiency and wastage common in Nepalese firms.
- Customer always comes first: since quality is determined by customers, Nepalese firms adopting this principle would design products around customer needs, improving consistency and acceptance.
- Fix the system, not the person: quality problems arise from the system, so instead of blaming workers, Nepalese organizations should correct faulty processes — a key shift given the tendency to blame individuals.
- Plan-Do-Check-Act (PDCA): applying this cycle would let Nepalese firms plan quality, implement it, monitor deviations, and take proactive corrective steps, directly tackling inconsistency.
- Continuous improvement: through training, teamwork, and self-improvement, firms can steadily reduce variation in product quality over time.
- Cease dependence on inspection: building quality in from the start, rather than inspecting defective output afterward, would prevent inconsistent products from being made in the first place.
- Avoid lowest-cost suppliers: many Nepalese firms buy cheap, inferior raw materials; Deming's advice to avoid the cheapest suppliers would ensure quality inputs and consistent output.
- Institute modern training: regular on-the-job training would equip Nepalese workers with the skills needed to produce uniform, high-quality goods.
- Institute leadership: effective leadership suited to changing situations would give Nepalese firms the direction needed to sustain quality.
- Drive out fear: a fearless workplace would let Nepalese workers freely report defects and suggest improvements, aiding consistency.
- Promote teamwork: breaking down departmental barriers would improve coordination and reduce quality gaps across the process.
- Role of management commitment: Deming stresses top-management commitment, which is often missing in Nepalese firms where quality remains a slogan rather than a practice.
- Practical challenges in Nepal: limited finance, weak technology, and untrained manpower may slow full adoption, so the principles must be applied gradually and realistically.
- Overall assessment: despite these challenges, Deming's principles offer a systematic, proven framework that can substantially reduce quality inconsistency if Nepalese management genuinely commits to them.
In conclusion, yes — Deming's principles of quality management can help solve the quality inconsistency of Nepalese business organizations, because they attack the root causes through system improvement, quality inputs, training, leadership, and continuous improvement, provided top management is truly committed to applying them.