Correcting deviations:

The ultimate goal of the control process is to pinpoint the occurrences outside the permissible range of action and permit the management to take corrective action. For instance, the number and duration of interruptions in power supply everyday in a locality could be controlled to manage demand. While the duration and/or number of interruptions increase beyond an acceptable level, it is time for the production supervisor to investigate and take appropriate steps to correct the condition.

The successful control procedure hinges on the concept of feedback. This refers to the information on the critical control variable of the operation or activity that when fed back to the manager enables her/him to take corrective action. Except in a self-regulated, closed mechanical system, whereas the corrective action is taken instantaneously and automatically, most activities inside an organization require human intervention. For example, the finance manager of your utility might be more interested in finding out why earnings/collections/profits have fallen below the established level and might take suitable steps to remedy this. In some cases, only a minor corrective action is required. But sometimes the situation needs drastic action, such as scrapping a department or plant whose operation has become totally unprofitable.

In the earlier times, feedback implied a lag among the time while the event actually occurred and the time by which information about the event reached the manager concerned. To overcome this problem of time lag, most companies generated daily reports of critical variables that provide early signals to the manager. With the introduction of computers and real time information systems (instantaneous transmission), this problem has hugely been overcome.  All control processes should reflect the plans which they are supposed to follow. Thus, to be truly effective, the controls must highlight the critical variables in an objective manner and be worth their cost in installing and operating.

Budget is a traditional and widely used control process. Apart from this, an organization may use historical statistical data, and break-even analysis to manage its operations. Several sophisticated control techniques pertaining to implementation of control for inventory management and distribution logistics and project or programme management are designed. A few of these involved Programme Evaluation and Review Technique (PERT), Critical Path Method (CPM), etc.