The principles of administrative control are the general rules to be followed in the process of analyzing whether the actions are being carried out as planned and taking the necessary corrective measures to confirm the planning.
Managing means trying to make the best use of available resources to achieve the business objective . Therefore, the administration includes all the operations of the company.
Administrative controls are the set of procedures necessary for administrative and economic efficiency. As an integral part of an organization's internal control system, its objective is to ensure the full and timely implementation of management's policies and plans.
Some examples of administrative controls include procedural changes, employee training, and installation of warning signs.
The basic principles of administrative control can be grouped into eleven categories, reflecting its purpose and nature, structure and process. These principles of administrative control are detailed below.
Basic principles of administrative control
Goal assurance principle
The basic objective of administrative control is the achievement of objectives. This is done by detecting flaws in the plans.
Potential or actual deviations from the plans must be sufficiently detected to allow effective corrective action.
Controls efficiency principle
An administrative control system must detect and highlight the causes of deviations from the plans with the minimum possible costs.
The principle of efficiency is particularly important in control, because the techniques tend to be expensive and cumbersome.
A manager can be so engrossed in control that he may spend more than necessary to detect a deviation. Controls that seriously interfere with the authority of subordinates or with the motivation of those who execute the plans are inefficient.
Control responsibility principle
The main responsibility for exercising control rests with the manager in charge of executing the plans. Their responsibility cannot be abrogated or annulled without changing the structure of the organization.
The responsibility to control must be given to specific people at each stage of the operation.
This simple principle clarifies the rarely understood role of controllers and control units.
These agencies act as a service that provides control information. However, they cannot exercise control unless they are given managerial authority and responsibility for things controlled.
Prevention principle
Control, like planning, must be forward-looking and preventive. This principle has often been neglected, largely because control has relied more on statistical and accounting data, rather than on forecasts and projections.
Although the forecasts are not accurate, they are better than the historical records. Ideally, a control system should provide instant feedback to correct deviations from desired performance as soon as they occur.
If this is not possible, the control should be based on forecasts, in order to anticipate deviations over time. More attention should be paid to preventing deficiencies than to remedying them after they occur.
For example, cash forecasts help maintain the solvency of businesses by anticipating and preventing cash shortages.
Direct control principle
The vast majority of controls in use today are based on the fact that humans make mistakes. They are often used as indirect checks to detect errors, often after the fact.
Wherever possible, direct controls aimed at preventing errors should be used. Improving the quality of managers can minimize the need for indirect controls. High-quality managers make very few mistakes and carry out all their functions to the best advantage.
Principle of reflection of plans
Control is the task of ensuring that the plans are carried out effectively. Therefore, control techniques must reflect the specific nature and structure of the plans.
The clearer and more comprehensive the organization's plans are, and the more controls are designed to reflect these plans, the more effective the controls will be in meeting needs.
For example, cost control must be based on planned costs of a defined and specific type.
Pri ncipio Pyramid
Feedback data should first be reported at the bottom of the pyramid; that is, to supervisors and even to operational personnel at the lowest levels.
This will give employees the opportunity to control their own situations, as well as speed up corrective actions.
Organizational suitability principle
An administrative control system conforms to the area of administrative authority and should reflect the structure of the organization.
When the administrative control system is adapted to the structure of the organization, it determines the responsibility of the action and facilitates the correction of the deviation of the plans.
Similarly, the information for evaluating performance against plans must be tailored to the position of the manager who will use it. In other words, all figures and reports used for control purposes must be in organizational terms.
Principle of individuality of controls
Controls become effective when they are consistent with the position, operational responsibility, competence, and the needs of the individual concerned.
The scope and detailed information required vary by level and function of management.
Similarly, different managers prefer different forms and units of information reporting. Therefore, the controls must meet the individual requirements of each manager.
Critical point control principle
All operations have certain vulnerable or critical points. It is these that cause the most problems and lead to large deviations.
A manager, while exercising control, must focus on the factors that are critical to evaluating performance.
It would be unnecessary and uneconomical for a manager to verify every detail of performance. Therefore, you must focus your attention on critical performance points.
Principle of action
Control turns out to be a waste of time if corrective action is not taken. Corrective actions may include rethinking plans, reorganization, replacement or training of a subordinate, motivation of staff, etc.
Control is justified only when indicated deviations from plans are corrected through proper planning, organization, staffing and direction.
see also finance and business knowledge
