CHAPTER 6 CONTROLLING.pptxbsisiejnejeikeejej

Skjsisie

1. Controlling

2. Control is a fundamental function of management. Controlling simply means seeing that everything is going on according to plans. It is the process of verifying whether actual performance is in conformity with planned performance and taking corrective action, if necessary. James Stoner,: "Management control is the process of ensuring that actual activities conform to planned activities"

3. Characteristics of Control It is an important managerial function. 2. It is the function of every manager. 3. It is closely related with planning. 4. It is a forward looking process 5. It is a continuous process 6. It is a process of checking actual performance against planned performance

4. Importance of Controlling Increases efficiency 2. Measures actual performance 3. Helps in decision making 4. Facilitates optimum use of resources 5. Facilitates co-ordination 6. Enhances employee morale 7. Facilitates decentralization or delegation 8. Helps in better planning

5. Requirements or Essentials of Effective / Sound Control System Suitability Prompt reporting Forward looking Objective Flexibility Economical Simple Remedial action Motivation E xception principle Acceptability

6. Process of Control (Steps In Control) Establishment of standards: Standards are criteria for judging the actual results. They are the yardsticks with which actual performance is measured. They should be stated clearly and precisely They should be accurate, acceptable and practicable. standards are expressed in quantities

7. 2. Measurement of actual performance: next step in the control process is to measure actual performance. The actual result may be tangible or intangible. Eg . Production units, profit etc. are tangible . These are easy to measure Employee morale, human relation, managerial efficiency etc. are intangible . These cannot be measured easily. techniques like personal observation, sampling, management accounting tools etc. are available for measuring the actual performance.

8. 3. Comparison of actual performance with the standards: By comparing the actual performance with the standard, the difference or deviation is calculated. The deviation may be nil, positive or negative. If the deviation is nil , it means that the performance is up to the standard . If it is positive , it means that the actual performance is greater than the standard. Negative performance means that the performance is not up to standard. If the deviation is small it may be ignored

9. 4. Taking corrective action: The management tries to identify the causes of difference or deviation. Then management analyses these causes, i .e., investigates as to why the deviation has come and who are responsible for this. there are three alternatives or courses of action before a manager . 1. One is do nothing (to maintain the status quo). If the events are proceeding to plans, no corrective action is required. 2. to solve the problem. If the deviation ais significant, the manager has to start problem solving. 3.The third alternative to revise the standard. If the deviation is due to errors in planning, corrective action is not required.

10. 5. Feedback: After correcting the deviation, it is essential to ensure whether the things are going now as per plans and whether the action taken has brought about any impact. through feedback the management comes to know the impact of corrective actions.

11. Relationship between Planning and Controlling Planning and controlling are the two basic functions of management. The process of management begins with planning and ends with controlling. Planning and control are closely related. Planning is the basis of control and control makes planning meaningful. 1.control requires planning 2.planning requires controlling.

12. Planning requires Controlling: Planning without control is meaningless. Planning is concerned with establishing objectives and policies and methods of attaining them. Control ensures that the activities are proceeding according to plans and policies and that objectives are achieved. If actual performance deviates from planned performance, the management can take corrective measures. Then only planning will get meaning. Control also indicates the need for revising plans.

13. Control requires Planning: Planning is the basis of control. Control is the process of evaluating the actual performance against standard performance. Planning provides such standards. Where there is no plan, there is no standard. Hence there is no basis for control. Planning sets the targets (standards). Control ensures whether the targets are accomplished. When the targets are not fully accomplished, control enables to analyse the reasons for such deficiencies, Planning determines where to go, while control ensures one is going in the right track This means that without planning control is blind.

14. Reciprocal relationship: Planning and control are complimentary to each other because both go hand in hand. One cannot go without the other. Controlling makes planning more meaningful, and planning in turn makes controlling more effective and purposeful. Planning and control are inseparable. These are the Siamese twins of management.