4 important factors for formulating organization policies are given below:

1. Control over Policies:

The object of this control is to see that policies are formulated in those matters which recur often and they are followed in practice, too. (a) So senior operating staff should be involved in policy formulation, (b) Top management should keep a general check on the application of policies, (c) Policies should also be periodically reviewed.

2. Control over Production:


It is combined with production planning. Production planning and control envisage tour processes of activities in main –

(a) Routing i.e., indicating the sequence of production.

(b) Scheduling i.e., -fixing the times for starting and finishing each operation.

(c) Dispatching i.e., issuing the materials for work, allotting the machines etc.


(d) Chasing i.e., follow-up the work.

3. Control over Quality:

The quality of a product refers to certain characteristics such as colour durability, fineness, strength, size and so on. Quality control means checking product from the standpoint of certain predetermined standards based on these characteristics.

4. Control over Inventory:


Inventory refers to the stock of materials – raw materials, work-in-process and finished products. It emphasises the burden involved through tied- up money. The important principles of inventory control are:

i. Never run out of stock.

ii. Never keep too much of any materials in stock.

iii. Purchase materials in economic lots.


iv. Scientifically determine the ordering level.