Requirements for effective controls

 Tailor controls to plans & positions
o It should reflect the plans they are designed to follow
o Tailor it to the positions. Example: what is suitable for VP marketing is not suitable for Salesman
o Should reflect the organization structure. It becomes easy to pinpoint the accountability for the execution of the plans
 Tailoring controls to individual managers
o The way a manager wants it, the control system should be provided in that manner; even if it is complicated
 Designing controls to point up exceptions at critical point
o It should point the exceptions as well as deviations as & when it occurs
 Seeking objectivity of controls
o Controls should not be subjective, otherwise performance can be manipulated
 Ensuring flexibility of controls
o As when the goals change, the control system should also undergo a change
 Fitting the control system to the organizational culture
o If there is participative culture do not have tight controls, & vice-a versa.
 Achieving economy of controls
o It should be worth its cost.
 Establishing controls that lead to corrective action
o When deviations are pointed out. Corrective action should be possible.