control techniques

presentation on control techniques

1. PRESENTATION ON CONTROL TECHNIQUE AND PERFORMANCE Submitted by: Rakesh kumar (MBA 1 st semester) Submitted to: Mrs. Reena sidana HOD MBA

2. INTRODUCTION To enable managers effectively control the organizational activities, a large number of controlling techniques are available. A manager should know these techniques and in which situation it should be applied. There are two types of techniques of controlling.

3. TWO TECHNIQUES Traditional techniques Modern techniques

4. TRADITIONAL TECHNIQUES Personal observation Budgeting Break-even analysis Financial statement Statistical data & report Setting examples Standard costing Written instructions

5. PERSONAL OBSERVATION This is the most traditional method of control. It helps managers to collect first hand information. It also creates a psychological pressure on the employees to perform well as they are aware that they are being observed personally on their job. How ever it is very time consuming , & not suitable for all kinds of jobs.

6. BUDGETING Meaning - A budget is a statement which reflects future incomes ,expenditures & profits of the firm. Benefit of budgeting- Standards of performance Planning Predicting the future Financial planning

7. BREAK EVEN ANALYSIS It deals with the study of the relationship between costs, volume, & profit. It determines the probable profit and losses at different levels of activity. The sales volume at which there is no profit, no loss is known as breakeven point. It can be calculated as , Breakeven point=fixed cost/selling price per unit – variable cost per unit.

8. FINANCIAL STATEMENT Financial statements shows financial position of a firm over a period of time, generally one year. These are prepared along with last year statements, so that firm can compare its present performance with last year’s performance & improve its future performance. It offers information on , Liquidity Financial strength profitability

9. STATISTICAL DATA & REPORT Statistical analysis in the form of averages,percentages,ratios,..etc. Data can be used for diagramatic representations like histograms, pie chart, bar graphs..etc. A Report is a statement that represents data in the form of information for carrying out the controlling function.

10. SETTING EXAMPLES It is old saying that “example is better than precepts” Some managers follow this and put good examples of performance before subordinates and expect the same from them. Behaviour and actions of subordinates can be controlled through exemplary behaviour of the manager.

11. STANDARD COSTING It is a technique of cost control. Under this technique ,standard costs of materail,labour,overheads etc. are determined. Actual cost are recorded and compared with the standard costs and variances are found out. Then measures are taken to prevent variances in future.

12. WRITTEN INSTRUCTIONS These instructions are issued time to time to the organization members. These provide latest information and instructions in the light of changing rules and conditions. These are supplementary control technique.

13. MODERN TECHNIQUES Return on investment. Management audit. Management information system (MIS). PERT/CPM.

14. RETURN ON INVESTMENT Investment consists of fixed asset and  working capital used in business . Profit on the investment is a reward for risk taking. If the ROI is high then the financial performance of a business is good and vice-versa. It also shows the areas where corrective actions are needed.

15. MANAGEMENT AUDIT Management  Audit is an evaluation of the management as a whole. It critically examines the full management process. It finds out the efficiency of the management. Management auditing is conducted by a team of experts. The data is analyzed and conclusions are drawn about managerial performance and efficiency.

16. MANAGEMENT INFORMATION SYSTEM In order to control the organisation properly the management needs accurate information. Information is collected continuously to identify problems and find out solutions. They need information about the internal working of the organisation and also about the external environment. MIS collects data, processes it and provides it to the managers.

17. PERT/CPM Programme Evaluation and Review Technique ( PERT ) and Critical Path Method ( CPM ) techniques were developed in USA in the late 50's. Any programme consists of various activities and sub-activities. Importance is given to identifying the critical activities. by controlling the time of the critical activities, the total time and cost of the job are minimized.

18. THANKS