Controlling in Management - Definition,Scope,Steps,Techniques

Controlling in Management - Definition,Scope,Steps,Techniques

1. Controlling in Management – Definition, Scope, Steps, Techniques 1

2. Objectives 2 Have knowledge about Control Understand about features & need Know about advantages & disadvantages of control. Know about PERT-CPM earn about problems of budgetary control

3. Introduction 3 Control is the last function of management. Controlling function is unnecessary to the management if other functions of management are performed properly. The deviation are set right by control function

4. Definition of Control 4 Koontz and O’Donnel : Measurement of accomplishment against standards & Correction to deviation from standards Henry Fayo : control consists in verifying whether everything occurs in conformity.

5. Definition of Control 5 Earnest Dale :controlling is Envisages a system, which pinpoints reasons Billy E.Goetz: Management control seeks to compel events to confirm to plans .

6. Definition of Control 6 J.K Rosen : Control is the presence in business of that force which guides it to predetermined value. George Terry: Controlling is determining what is being accomplished

7. Scope of Control 7 Policies Organization Production Wages & salary Environment Pubic relations

8. Steps in control process 8 Establishing Standards Measuring Performance Comparison actual with standards Taking Corrective action

9. Requirement of effective control system 9 Feedback Objective Suitability Prompt Reporting Forward looking

10. Requirement of effective control system 10 Pointing Out expectations Flexible Economy Intelligible Suggest remedial action Motivation

11. Techniques o f control 11 Statistical Control reports Personal Observation Cost Accounting Break Even Analysis Special Control Report

12. Techniques o f control 12 Management Audit Standard Costing Return On Investment Internal Audit Responsibility Accounting

13. Techniques o f control 13 Managerial Statistics Performance Evaluation & Review Technique Critical Path Methods Gantt Milestone chart Production Control

14. Techniques o f control 14 Management Information System External Audit Control Zero-base Budgeting Standing Orders Budgetary Control

15. PERT ‐CPM 15 PERT stands for Programme or Project Evaluation & Review Technique. CPM stands for Critical Path Methods. PERT was developed from Gantt chart by Booze,Allen and Hamilton. PERT is used as planning as well as controlling tool

16. Suitability PERT ‐CPM 16 PERT technique is suitable for the following projects. Large weapon system Ship building Air port facilities building Launching new products

17. Advantages of PERT ‐ CPM 17 Ensures planning Identification of favorable factors. Saving of cost and time Taking preventing action Attention on critical activities Everything at right

18. Advantages of PERT ‐ CPM 18 Making Awareness of activities. Securing co-operation Facilitates decision making Improved communication Timely completion of project

19. Limitation of PERT ‐ CPM 19 Error in estimation of time & cost. Application: Can be applied only one time for non repetitive projects. Time consuming & expensive

20. Distinction between PERT and CPM 20 PERT gives importance to time. CPM gives importance to cost PERT is event oriented CPM is activity oriented.

21. Features of Control 21 Controlling process. Universal Forward looking Dynamic process An Essence of action

22. Need of Control 22 Judging the accuracy of standards. Minimize dishonest behavior. Better performance

23. Advantages of Control 23 Adjustment in operation Verification of policy Managerial accountability Psychological pressure

24. Advantages of Control 24 Maintaining morality Co-ordination Efficiency

25. Limitations of Control 25 Absence of perfect standards Uncontrollable factors Difficulty in fixing responsibility Expensive process

26. Types of managerial Control 26 Standardizing control Preserving control Delegation of authority control Measurement control Motivating control

27. Budget 27 The term Budget is derived from the French word ‘Budgette’ which means small lather bag Budget is a financial and a quantitative statement ,prepared prior to defined period of time Hary L.Wlise: Budgets are finished products •

28. Budget 28 According to G.R Terry Budget is plan for income or outgo or both Landers: The essence of a budget is a detailed plan of operations for some specified future period followed by a system of records which will be served as a check upon the plan. Clearance L.Von Sickle: The budget is an estimate prepared in advance of the period to which it applies.

29. Budgetary control 29 Budgetary control is a tool used by management to obtain the objectives expressed as in the form of budget. According to J. Betty Budgetary control is a system which uses budget as a means of planning. According to R.C. Davis Budgetary control is an important means of establishing accountability.

30. Budgetary control 30 Institute of Cost & Management Accountant, London Budgetary control is the establishment of a budget relating to the responsibilities of executives to the requirements of policy. According to Walter W.Bigg “ Budgetary control is applied to management and accounting control by which all operations & output are forecast

31. Objectives of Budgetary control 31 Fixation of income and expenditure Defining goals for a stipulated period Co-ordination of work of various departments

32. Objectives of Budgetary control 32 Assisting in terms of data, the top management for policy determination. Forecasting financial position of company Centralizing management control

33. Characteristics of Budgetary control 33 The activities of organization are presented department wise or section wise. The future is planned on the basis of past experience. Recommends and implements the corrective action whenever necessary.

34. Advantages of Budgetary control 34 Tool for planning the activities. Thinking in advance. Control of expenditure Better utilization of resources

35. Advantages of Budgetary control 35 Promotion of efficiency Achievement of goals Criteria of self examination Fixation of responsibilities Encourages exchange of information

36. Disadvantages of Budgetary control 36 Inaccuracy Personal bias Non availability of co-operation Rigidity Results are not attainable

37. Disadvantages of Budgetary control 37 Consistency Time consuming process Ineffective Budgetary control Discourage the initiative More paperwork

38. Essentials of Effective Budgeting System 38 Efficient organization Preparing master budget Preparing master budget Quick response Flexible Appropriate authority

39. Types of Budgets 39 Master budget Sales budget Cash budget Production budget Physical property budget

40. Types of Budgets 40 Time & material budget Selling & distribution cost budget Balance sheet budget Suppliers budget Production cost budget

41. Types of Budgets 41 Production overhead cost budget Research & development Fixed budget Flexible budget

42. Preparation of a Budget 42 Sound forecasting Developed accounting system Fixation of responsibility centers Formation of budget committee

43. Preparation of a Budget 43 Clear definition of business policies Statistical information Support of top management Budget period

44. Summary 44 Control function is last function of management. Controlling function is unnecessary to the management if other functions of management are performed properly. The deviation from standards is set by control function PERT-CPM expresses total events and activities and there interrelationship. Budget is a financial and a quantitative statement ,prepared prior to defined period of time