(Q) Operations Control-Meaning, Importance and Types?

Controlling is an important function of management which all the managers are

required to perform. In order to contribute towards achievement of organisational
objectives, a manager is required to exercise effective control over the activities of his
subordinates. ... Hence, it is a goal oriented function.
Operational business controlling is used to regulate the internal processes necessary to
monitor and direct of the company in the short term. It allows making business decisions
related to ongoing business operations. The main tasks of operational controlling include:
controlling of the results,
liquidity planning,
monitoring of profitability,
improving effectiveness of use of existing resources.

The process of operational controlling (also called business controlling) allows converting
strategic plans in the operational plans. These plans must be tailored to specific units that
make up the whole company. The whole process takes often place in the socalled budgeting process.
Basic elements/significance of business controlling system is:
internal reporting system,
budgetary control,
operational planning (budgeting).

Business controlling normally takes the form of budgetary control, and is performed by
comparing the short-term performance of organizational units with those established in the
budget. Then managers analyse the deviations of actual values from the values set in goals
for specific unit and the whole company.
The detailed design process consists of the following steps:
1.
2.
3.
4.
5.
6.
7.
8.

Determination of the time, scope and field of controlling.

Preparation - setting goals and plans.
Selection of parameters, measures and indicators.
Providing proper information sources across organization.
Determining the procedure for monitoring deviations.
Establishing rules for decision-making process.
A decision on the implementation of the system.
Determination of the detailed time schedule and financial resources needed for
implementation

Types of the Operational/Business Controls

1. Direct controls
a. Called as the direct controls as the people here get so well tuned to the job that there are
very less chances for the deviations to take place.
b. Also called as the preventive controls.
c. Aims at the saving on the cost of the control.
d. Also aims at the zero defects from the initiation.
e. Great emphasis is given on the prevention of the need of the controls; to build the
systems, the procedures, the culture, the discipline etc.
f. But with time these types of the controls also get older and outdated.
g. For the proper functioning of the direct controls, assistance of the indirect controls is
very much needed.
2. Feed forward controls
a. Whenever a process is performed, two factors are very critical namely the inputs and the
outputs.
b. Here we take into account the various deficiencies of a process well in advance, so that
these can be cured or controlled at the initial stages.
c. The shape of the feedback controls is taken by almost all the controls.
d. It is advised by the various experts to have the both feed forward and the feed backward
controls on the process.
e. Helps in the establishment of a right direction and control right from the beginning.
3. Feed backward controls
a. Here the controls are put at the output end as the deviations that occur are not known to
us till the moment of the output.
b. Very heavy cost is involved.
c. Results into the customer dissatisfaction.
4. Real time controls
a. Involve the instantaneous feedback almost in the real time, (real time can defined as the
time when both the creation of a report and its transmission is done almost with no gap that
one can almost read it at the time it is being sent) for e.g. the fax or the telephone.
5. Automation in the controls
a. Here, mainly for the development of the control systems involving very less human
power, building of the instrumentation takes place.
b. Computers are used for the feedback systems and for the automatic corrections.