Co Ntr Olling

CO NTR OLLING

DEF INI TIO N Management control is a systematic effort to set performance standard with planning objectives

INTR ODU CTI ON 

“Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives acc to plans.” - Koontz o’donnell Cont….

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“Control maintains the equilibrium between ends and means , output and efforts” - Peter drucker

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“ Control consists of verifying whether everything occurs in conformity with the plans adopted , the instructions issued and the principles established.” - Henry fayol

ELEM ENTS OF CON TRO L Setting standards of performance at strategic points  Leading , motivating , supervising, directing , guiding of employees. Cont…….. 

Measurement of actual performance  Its comparison with the stated standards of performance. 

ELEM ENTS OF EF FECT IVE CO NTR OL        

Suitabiltiy Deviations Objective Predictions Flexible Economic Underestandable Corrective

CHAR ACTERI STI CS OF CO NTR OL End fuction  Continuous process  Flexibility activity  Forward looking  All level exercise 

Cont...

Employee behaviour  Anticipating probable changes  Economically realistic  Accurate- timely - objectives and comprehensive  Focuses on strtegic control points 

NEE D OF CONT ROL Proper action  Decision making  Consistency  Co-ordination  Positive impact  Detection of weakness  Proper implementation of plans 

PROC ESS OF CON TRO L Establishment of standards  Measurement of actual performance  Comparison step  Corrective action 

CON TRO L TECH NI QU ES

OLD TECHNIQUES  NEW TECHNIQUES 

OL D TECH NI QU ES Personal observation  Suitable organizational structure  Unity of policies  Statistical reports  Break-even analysis  Budgetary/financial control 

     

BUDGET/FINANCIAL CONTROL (statements) Balance sheet Income statement Cash flow statement BUDGET/FINANCUAL CONTROL (methods) Responsibility centers --Revenue centers --Expense centers

--Profit centers --Investment centers

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FINANCIAL CONTROLS ARE FOR— --LIQUIDITY --GENERAL FINANCIAL CONDITION --PROFITABILITY

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TYPES OF BUDGET - Operating budget --EXPENSE BUDGET -- REVENUE BUDGET -- PROFIT BUDGET

VARIABLE VERSUS FIXED BUDGET

NEW TECH NI QU ES MANAGEMENT AUDITS  RETURN ON INVESTMENT  RESPONSIBILITY ACCOUNTING 

PERT AN D CPM PERT : Programme evaluation and review technique  CPM : Critical path method  They are oriented towards achieving better mangerial control of time spent in controlling a project. Cont……. 

SI MIL ARI TY Under both techniques , a project is decomposed into activities and then all activities are integrated in a highly logical sequence to find the shortest time required to complete the whole project.

DI FFERE NCE

PERT FOCUSES ON TIME WHERE AS CPM FOCUSES ON THE COST

LIMIT ATI ONS OF CONTR OL External factors  Difficulty in setting standards  Fixing of responsibility  Variation and its causes 

CON TROL LING “ Planning is the basis of control, Action is the essence of control, Delegation is the key to control, & Information is guide to control ”