Lack of Knowledge, Experience of Judgement

Plans may fail when people appointed to managerial posts lack the necessary background. At the top level, the chance of correction through separation from the firm tends to be fairly small but at middle and lower level deviations can be dealt with through transfers, demotions or separation. If the cause of error is poor judgement which is due to inadequate training or experience or to failure to use appropriate information in decision making correction can be made. Managers can improve their education and experience.

Direct control is based on the following assumptions:

(a)    That performance can be measured—But there are several things that cannot be measured e.g. creativity, foresight and judgement.

(b)    That personal responsibility exists—sometimes no manager is responsible for poor results. Environmental factors could affect achievement.

(c)    That mistake can be discovered in time—Discovery of deviations from plans often comes too late for effective action. Although the control can be applied only to future action most controls depend on historical data.

(d)    That time expenditure is warranted—Whether managers undertake the inquiry themselves or assign it to others, executive time must be spent differentiating out causes of poor results.

(e)    That the person responsible will take corrective steps—Fixing the responsibility may not lead to correction, especially if the person is in superior management, e.g. production cost must not always be traced to the production department. They could flow from the marketing department.