The first type concerns measurement. The ability of a manager to develop potential managers, the effectiveness of research, and the amount of creativity, foresight, and judgment in decision making can seldom be measured accurately.
The second type of shortcoming concerns the location of the control. Managers know that critical stages exist in acquiring input factors, manipulating them to produce a finished product and selling and delivering the product. In a factory operation, for example, critical stages would include receiving inspection, inspection for each assembly process, shipping, and billing. These are critical because effective control here will minimize costs. No amounts of control at other points can make up for lack of control at these stages.
Assumption that personal responsibility exists:
Sometimes no manager is responsible for poor results. An increase in interest rates or inflation may cause the costs of many activities to rise precipitously; scarcity of a particular fuel may necessitate use of less economical sources of power; and markets may shrink for reasons unconnected with the firm.
Assumption that the time expenditure is warranted:
Whether managers undertake the inquiry themselves or assign it to others, executive time must be spent in ferreting out causes of poor results. Large scrap losses, for example may call for meetings attended by persons representing quality control, production planning, engineering, purchasing, and manufacturing. Because time has passed, recalling facts may be quite difficult. These drawbacks may convince managers that the cost of investigation exceeds any benefit they may derive. This often precludes investigation of clear violations of standards.
Assumption that mistakes can be discovered in time:
Discovery of deviations from plans often comes too late for effective action. Although true control can be applied only to future action, most controls depend on historical data – all that most managers have available. Managers should, of course interpret such data in terms of their implication for the future.
Assumption that the person responsible will take corrective steps:
Fixing the responsibility may not lead to correction. High production costs, for example might be traced back to a marketing manager who insists that “slight” product modification will make selling easier and that this involves no change in a production run. If the marketing manager is a member of top management, a subordinate investigator may be intimidated. Although great effort may be made to correct subordinate managers, it is sometimes very difficult to correct an executive to whom one reports.