Directing and Controlling

3,812 views 46 slides Jan 09, 2022
Slide 1
Slide 1 of 46
Slide 1
1
Slide 2
2
Slide 3
3
Slide 4
4
Slide 5
5
Slide 6
6
Slide 7
7
Slide 8
8
Slide 9
9
Slide 10
10
Slide 11
11
Slide 12
12
Slide 13
13
Slide 14
14
Slide 15
15
Slide 16
16
Slide 17
17
Slide 18
18
Slide 19
19
Slide 20
20
Slide 21
21
Slide 22
22
Slide 23
23
Slide 24
24
Slide 25
25
Slide 26
26
Slide 27
27
Slide 28
28
Slide 29
29
Slide 30
30
Slide 31
31
Slide 32
32
Slide 33
33
Slide 34
34
Slide 35
35
Slide 36
36
Slide 37
37
Slide 38
38
Slide 39
39
Slide 40
40
Slide 41
41
Slide 42
42
Slide 43
43
Slide 44
44
Slide 45
45
Slide 46
46

About This Presentation

Meaning and nature of directing, leadership styles, motivation, meaning and importance, Communication, meaning and importance, co-ordination, meaning and importance and techniques of co-ordination, control, meaning, features, importance and steps in control process, essentials of a sound control sy...


Slide Content

UNIT V
1
MR.T.SOMASUNDARAM
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT
KRISTU JAYANTI COLLEGE,
BANGALORE.

UNIT V
DIRECTING & CONTROLLING
Meaningandnatureofdirecting,leadership
styles,motivation,meaningand
importance,Communication,meaningand
importance,co-ordination,meaningand
importanceandtechniquesofco-
ordination,control,meaning,features,
importanceandstepsincontrolprocess,
essentialsofasoundcontrolsystem,
methodsofestablishingcontrol(inbrief).
2

DIRECTING
Meaning:
Directingissaidtobeaprocessinwhichthemanagers
instruct,guideandoverseetheperformanceoftheworkers
toachievepredetermined.
Itissaidtobetheheartofmanagementprocess.
Itisacomplexmanagerialfunctionconsistingofal
activitiesthataredesignedtoencouragedsubordinatesto
workeffectively.
Definition:
"Activatingdealswiththestepsamanagertakestoget
sub-ordinatesandotherstocarryoutplans"
-NewmanandWarren.
Directingconcernsthetotalmannerinwhicha
managerinfluencestheactionsofsubordinates. 3

Nature(Characteristics)ofDirecting:
InitiatesAction–keymanagerialfunctionandmanagerhas
toperformthisfunction.
ContinuingFunction–itisacontinuousactivity
throughoutthelifeoforganization.
PervasiveFunction–itisrequiredatalllevelsof
organization.
CreativeFunction–helpsinconvertingplansinto
performance.
Linkingfunction–initiatedattoplevel&flowstobottom
throughorganizationhierarchy.
ManagementofHumanFactor–itisrelatedto
subordinatesandthereforeitisrelatedtohumanfactor.
4

PrinciplesofDirecting:
•PrincipleofMaximumIndividualcontribution.
•PrincipleofHarmonyofobjectives.
•PrincipleofUnityofCommand.
•PrincipleofAppropriatenessofDirectiontechnique.
•PrincipleofManagerialCommunication.
•PrincipleofuseofInformalorganization.
•PrincipleofLeadership.
•Principleoffollowthrough.
ElementsofDirecting:
Thethreeelementsofdirectingare
•Motivation
•Leadership
•Communication
5

LEADERSHIP
Definition:
“Leadershipistheartofprocessofinfluencingpeopleso
thattheywillstrivewillinglytowardstheachievementofgroup
goals”.
-Koontz&O’Donnel
“Leadershipistheactivityofinfluencingpeopletostrive
willinglyforgroupobjectives”. -GeorgeR.Terry
“Leadershipisdefinedasinfluence,theartorprocessof
influencingpeoplesothattheywillstrivewillinglyand
enthusiasticallytowardtheachievementofgroupgoals”.
“Leadershipistheprocessofinfluencingtheactivitiesofan
individualoragroupineffortstowardsgoalachievementina
givensituation”. -Heresy&Paul
6

Nature(characteristics)ofLeadership:
Involvesguidingandmotivating.
Needssubordinatesandcommoninterests.
Promotesinterestinthework.
Needssupportfromall.
Influencessubordinatesthroughpersonalqualities.
Dynamicandcontinuousprocess.
Leadershipissituational.
Assumesobligation.
Needsinteractionwithfollowers.
Achievementofobjectives.
7

ImportanceofLeadership:
1.Motivatingemployees:
-Highermotivationwillmaketheemployeesforhigherperformance.
2.Leaderdevelopsteamwork:
-leader,subordinates&environmentarethreevitaldeterminantsof
teamwork&leadershouldmaketheenvironmenttoworkefficiently.
3.BetterutilizationofManpower:
-leaderimplementsplans,policies,programmesoforganizationto
utilizeavailablemanpowereffectively&getmaximumproduction.
4.Creatingconfidencetofollowers:
-leadercreateconfidentsinhisfollowersbydirectingthem.
5.Directinggroupactivities:
-leadercandirecthisfollowerandtakestheleadinallactivities.
6.Buildingmorale:
-basedonattitudes,voluntarycooperation,highmorale.
7.Maintainingdiscipline:
-promptsindividualtoobserverules,procedurestoachievegoals.8

LeadershipQualities:
9

LeadershipStyles:
Thebehaviourexhibitedbyaleaderduringsupervisionoffollowers.
1.AutocraticOrDictatorialleadership:
Theleadertakesalldecisionsby
himselfwithoutconsultingsubordinates.
Hehasfullauthorityandneverdelegates
authority.
*Types:
a)Strictautocrat–leaderfollowsthisstyleinstrictmanner.
-hefollowsnegativemotivationforgettingwork.
b)Benevolentautocrat–takesdecisionhimselfbutgivespositive
motivation.
c)Incompetentautocrat–adoptthisstyletohidetheirinabilities(i.e.)
incompetence.
*Autocraticleadershipstyleisappropriatein-
-subordinateshavinglackofknowledgeaboutcompanygoals.
-subordinatesareinexperienceorlackoftraining.
Autocratic leader
Follower
Follower
Follower
10

-companyindicatesfear&punishmentasdisciplinarytechniques.
-leaderisactiveanddominantindecision–making.
-littlechanceforerrorinfinalaccomplishment.
Advantages:
-facilitatesquickdecisionmaking.
-providesstrongmotivationandsatisfactiontoleader.
-highestproductivity,yieldpositiveoutcome.
-lesscompetentsubordinatesatlowlevels.
Disadvantages:
-employeemoralewillbelow,absenceofleaderaffectoutput.
-dissatisfactionwilldevelopamongemployees.
-employeeturnoverwillbemore.
-fullpotentialcreativeideasofsubordinatesarenotfullyutilized.
-communicationwithoutfeedbackleadstomisunderstandingand
communicationbreakdown.
11

2.ParticipativeOrDemocraticleadership:
Subordinatesareconsultedandtheirfeedbackistakenintodecision
makingprocess.
Theauthorityisdecentralized&thisleaderattachedtobothworkand
people.
*Participativeleadershipisappropriate-
-trulydesirestoheartheideasofhisemployees.
-organizationhascommunicateditsgoalsandobjectivesto
subordinates.
-workersarereasonablyknowledgeandexperienced.
-timefortaskcompletionallowsforparticipation.
-subordinatesdesireactiveandtrueinvolvement.
Democratic leader
Follower Follower Follower
12

Advantages:
-subordinatesaremotivatedbyparticipationindecisionmaking
process.
-absenceofleaderdoesn’taffectoutput.
-labourabsenteeismandturnoverwillbeminimum.
-qualityisdecisionisimproved.
-leadermultiplieshisabilitiesthroughcontributionofhisfollowers.
Disadvantages:
-timeconsuming,resultsdelayindecisionmaking.
-subordinatesarelazy&avoidwork,controllingisdifficult.
-itcan’tappliedatlowerlevelofmanagement.
-leadersmaybeuncomfortablewithreductioninpower&control
overlabour.
-yieldpositiveresultswhensubordinatespreferminimuminteraction
withleader.
-leaderrequirescommunicationandpersuasiveskill.
13

3.Laissez-FaireOrFreereinleadership:
Completefreedomtosubordinatesforplanning,motivation,control.
Authorityisdecentralized&leaderwillnottakedecision.
*Thistypeofleaderiseffective-
-leaderisinterestedindelegatingdecisionmaking.
-subordinatesarehighlyintelligentandawareofroles&
responsibility.
Advantages:
-positiveeffectonjobsatisfaction&
morale.
-createsenvironmentoffreedom&teamspirit.
-fullutilizationofpotentialofsubordinates.
Disadvantages:
-lackofdiscipline,lowestproductivity.
-nocontrol&co-ordination.
-membersputtheirowninterest.
Free –rein leader
Follower
Follower
Follower
14

4.Bureaucraticleadership:
Theyfollowrulesrigorouslyandensurethattheirstafffollows
proceduresprecisely.
Thisisappropriatestyleforworkinvolvingserioussafetyrisks.
5.Charismaticleadership:
Itissimilartransformationalleadership,becauseleadersinspirelots
ofenthusiasmintheirteamsandenergeticindrivingothersforward.
Charismaticleaderscantendtobelievemoreinthemselvesthanin
theirteams.
Charismaticleadershipcarriesgreatresponsibilityandneedsalong-
termcommitmentfromtheleader.
6.Servantleadership:
Servantleadershipisaformofdemocraticleadership,becausethe
wholeteamtendstobeinvolvedindecisionmaking.
Someone,atanylevelwithinanorganization,leadssimplyby
meetingneedsofteam,itisdescribedas‘ServantLeader”.

7.Transactionalleadership:
Itstartswithideathatteammembersagreetoobeytheirleadertotally
whentheyacceptajob.
Itislikepayingtheteammembersinreturnfortheireffortand
compliance.
8.Transformationalleadership:
Peoplewiththisstylearetrueleaderswhoinspiretheirteams
constantlywithsharedavisionoffuture.
Thisleaderslookafterinitiativesthataddnewvalue.
9.Task–Orientedleadership:
Itfocusonlyongettingjobdoneandactivelydefinesworkandroles
required,putstructuresinplace,plan,organizeandmonitor.
10.People–Orientedleadership:
Ittotallyfocusonlyonorganizing,supportinganddevelopingthe
peopleintheirteams.
Itisparticipativestyleandencouragegoodteamwork.

MOTIVATION
Definition:
“Motivation”isaLatinword,meaning‘tomove”.
“Motivationistheprocessofinducingpeopleinnerdrivesand
actionstowardscertaingoalsandcommittinghisenergiestoachieve
thesegoals”.
“Motivationisageneraltermapplyingtotheentireclassof
drives,desires,needswishesandsimilarforcesthatinducean
individualoragroupofpeopletowork”.-Koontz&O’Donnell
“Motivationmeansaprocessofstimulatingpeopletoactionto
accomplishdesiredgoals”. -Scott
“Motivationistheprocessofattemptingtoinfluenceotherstodo
yourwillthroughthepossibilityofreward”. -EdwinB.Flippo
17

Nature(Characteristics)ofmotivation:
-itisanunendingprocessbecausehumanneedsareunlimited.
-itisanpsychologicalconcept.(inducementoffeeling)
-itisbehaviouralconceptthatdirectshumanbehaviour.
-personcan’tbepartiallymotivated,frustratedmancan’tbe
motivated.
-itcanbeeitherpositive(incentive,bonus,rewards)&negative
(demotion,penalties).
-itisacomplexprocess&systemoriented.
-itdependson3factors–
i)influencesindividual
ii)influencesorganizationand
iii)externalenvironment.
-itisdifferentfromsatisfaction.(i.e.)Motivationisdrive&effortto
satisfyandSatisfactionisexperienced,feelswhenpersonissatisfied.
18

ImportanceofMotivation:
Productiveuseofresources.
Increasedefficiencyandoutput.
Achievementofgoals.
Developmentoffriendlyrelationships.
Stabilityinworkforce.
Bestutilizationofresources.
Willtocontribute.
Reductioninlabourproblems.
Sizeableincreaseinproductionandproductivity.
Basisofcooperation.
Improvementuponskillandknowledge.
Acceptanceoforganizationalchange.
Betterimage.
19

TypesofMotivation(Techniques):
1.Positivemotivation:
-properrecognitionofemployee’seffortsandappreciationof
employeecontributiontowardsgoalachievement.
(E.g.)pride,authority,responsibility,economicbenefits.
2.Negativemotivation:
-thisisbasedonforce,fear&threats.
(E.g.)failtocompletethework,demotion,dismissed,paycut.
3.Extrinsicmotivation:
-thisisinducedbyexternalfactors.
(E.g.)higherpay,restperiods,holidays,profitshare,health
insurance.
4.Intrinsicmotivation:
-thisisavailableatthetimeofperformanceofwork.
(E.g.)Praise,recognition,power,status,participation.
20

COMMUNICATION
Definition:
"Communication,isanintercoursebywords,letters
symbolsormessages,andisawaythattheorganization
memberssharesmeaningandunderstandingwithanother".
-Koontz&O’Donnell
Communicationfunctioninorganizations:
Itisthepowerfultool&significantcharacteristicsofman-kind.
Itissuccessofmanagementdependonabilitytocommunicate
withlabour.
Itistheprocessofinterchangingfacts,viewpointsandideas
betweenpersonsindifferentpositionsbyeffective
communication.
Thisleadtoworksatisfactorilyintheorganization.
21

ImportanceofCommunication:
NecessaryofPlanning.
BasisofCo-ordination.
Establishmentofeffectiveleadership.
Increasesmanagerialefficiency.
PromotesCo-operationandIndustrialpeace.
BasisofDecision–making.
MoraleBuildingandMotivation.
SmoothWorkingofEnterprise.
JobSatisfaction.
22

PurposeandFunctionofCommunication:
NeedforCommunication:
Toestablish&spreadgoalsofenterprisewidely.
Todevelopplansforfurtherachievement.
Toorganizehuman&otherresourcesinmosteffectiveandefficient
way.
Toselect,develop&appraisemembersoforganization.
Tolead,direct,motivate&creategoodworkingenvironment.
Tocontrol&maintaintheuniformsperformancethroughout.
Planning ControllingLeadingStaffingOrganizing
Communication
External Environment
•Suppliers
•Customers
•Governments
•Community
•Others
23

CommunicationProcess(Or)ModelofCommunication
(Or)Elements:
Feedback
Decoding
Source /
Sender
Encoding Channel
Receiver
Noise
Understanding
24

1.Source(Or)Sender:
-thisisoriginofcommunication&itcanbeindividualorgroup.
-thepersonwhoinitiatetheprocessassender,sourceor
communicator.
-hesendamessagetosomeotherpersontoachievesomepurpose.
2.Encoding:
-thisindicatecontentofmessage,wheresenderusehisownframeof
reference(e.g.)organization,situation,personalrelationships,
attitudes,knowledge&experience.
-threeconditionsforencodingarei)Skill–speaking,reading,
listening&reasoningskills,ii)Attitudes–influenceourbehaviour,
predisposedideasonno.oftopics,iii)Knowledge–amountof
knowledgeaboutsubjectandseekstotransfer.
3.TheMessage:
-itisactualphysicalproductfromsourceencoding&contains
thoughtsandfeelings.
-2components,i)Content(words,ideas),ii)Affect(feeling,
emotion)
25

4.Channel:
-themediumthroughwhichtheencodedinformationistransmitted
fromsendertoreceiver.(E.g.)noticeonnoticeboard,circulars,
booklets,telephone,e-mail,fax,videoconference.
5.Symbols:
-itprovidesthebasisfortransferofinformationsymbolsinformof
written(words),sketches,figures,orallikeactionandcoding,etc.
6.Decoding:
-itmeansinterpretingwhatthemessagemeans&itdependsupon
individualcharacteristicsofsenderandreceiver.
-itisbasedontypeofperception&subjecttoperceptionbiases.
7.Receiver:
-thepersonwhoreceivesfinalinformationortowhomthemessageis
directedandunderstandsit.
-tounderstandtherelevantinformation,thepersonshouldconvertthe
decodedinformationcorrectly.
8.Feedback:-helpsendertopayattention&interpretsit.
26

COORDINATION
Meaning:
Itisunificationandintegrationoftheeffortsofgroupmembers
andtoprovideunityofactioninachievementofcommongoals.
Coordinationishelpfulinachievingtheobjectivesofthe
organization.
Itisaprocessanditisnotfixed,itprefersgroupactivities.
Definition:
“Co-ordinationisapartofallphasesofadministrationand
thatisnotaseparateanddistinctactivity".-Newman
“Co-ordinationistheintegrationofseveralpartsintoan
orderlywhosetoachievethepurposeofunderstanding".
-CharlesWorth
27

ElementsofCo-ordination:
Co-ordinationthroughPlanning.
Co-ordinationthroughOrganizing.
Co-ordinationthroughStaffing.
Co-ordinationthroughDirecting.
Co-ordinationthroughControlling.
ImportanceofCo-ordination:
BackboneofManagement.
UnificationofActivities.
CreatingHealthyHumanRelations.
SecuringHighEmployeeMorale.
PromotingEfficiencyandEconomy.
ResolutionofConflict.
Integratingfunctionsofrelateddepartments.
28
CoreofGroupEfforts.
InterdependenceofWorkUnits.

TechniquesofCo-ordination:
1.ChainofCommand:
Employeeshouldreceiveordersfromonesuperior,because
dualcommandisacontinuoussourceofconflict.
Clearcutauthorityrelationshipwillreduceconflictsamong
differentdepartments.
2.Leadership:
Co-ordinationbecomespossiblethroughleadershipasit
providesindividualmotivationandpersuadesgroupto
identifyofinterests.
3.Committees:
Ithelpstopromoteunityofpurposeanduniformityof
actionamongdifferentdepartments.
Itprovideco-ordinationamongvariousactivities&persons
throughinformation,advice,etc.
29

TechniquesofCo-ordination:
4.Communication:
Effectivecommunicationconveysideas,opinionsordecisionsof
managerstosubordinateatdifferentlevelsoforganization.
5.VoluntarilyCoordination:
Itispossibleinaclimateofmutualco-operation,whentwoor
morepersonsworkingwithinsameordifferentdepartments,
mutuallydiscussandarriveatcoordinatedaction.
6.SoundPlanningandClear–CutObjectives:
Organizationobjectivesandpoliciesmustbeclearlydefinedby
management.
Clearformulationofpoliciesinthefieldofproduction,sales,
finance,personnel,etc.mustbecorrelated.
7.Incentives:
Incentiveshaveatendencytoigniteactionandbringaboutco-
ordinationandtoreduceconflicts.
30

CONTROLLING
Definition:
“Controlischeckingcurrentperformanceagainst
predeterminedstandardscontainedintheplanswithaviewto
ensuringadequateprogressandsatisfactoryperformance”.
-E.F.L.Breach
“Controllingisthemeasurementandcorrectionof
performanceinordertomakesurethatenterpriseobjectivesand
theplansdevisedtoattainthemareaccomplished”.
-HaroldKoontz
FeaturesofControlling:
Managerialfunction.
Forwardlooking.
Continuousactivity.
Controlisrelatedtoplanning.
Essenceofcontrolisaction.
31

CharacteristicsofControlling:
Itisauniversal(essentialfunctioninorganization).
Itisacontinuousprocess(non-stopprocess).
Itisactionbased(ensuresperformance).
Itisforwardlooking(linedwithfuture).
Itiscloselyrelatedtoplanning(plansinvariousbusinessactivities).
Itisanintegratedsystem&alsominimizeserrors.
Controlisamanagementprocess&embeddedineachlevelof
organizationhierarchy.
Controlisatoolforachievingorganizationalactivities.
Controlcomparesactualperformancewithplannedperformance.
Itfacilitatesoptimumutilizationofresources.
Itevaluatesaccuracyofstandardandalsosetsdisciplineandorder.
Itmotivatestheemployeesandboostsemployeemorale.
Itensuresfutureplanningbyrevisingstandards.
Itimprovesoverallperformanceoforganization.
32

ImportanceofControlling:
1.AccomplishingOrganizationalgoals:
Ithelpsincomparingtheactualperformancewiththepredetermined
standardsandtakecorrectivemeasurestoachievethegoals.
2.JudgingAccuracyofStandards:
Efficientcontrolsystemhelpsinjudgingtheaccuracyofstandards.
3.Makingefficientuseofresources:
Itchecksworkingofemployeesandensureeffectiveandefficientuse
ofallresourcesinanorganization.
4.ImprovingEmployeeMotivation:
Systematicevaluationofperformanceandrewardsinformof
increment,bonus,promotion,etc.motivateemployeestoputtheirbest
efforts.
5.EnsuringOrderandDiscipline:
Itensureaclosecheckontheactivitiesoftheemployeesandcreate
orderanddisciplineinorganization.
33

ImportanceofControlling:
6.FacilitatingCoordinationinAction:
Ithelpsinprovidingacommondirectiontoalltheactivitiesof
differentdepartmentsandeffortsofindividualsforattainingthe
organizationalobjectives.
7.Basisforfutureaction:
Continuousflowofinformationaboutprojectskeepsthelong-range
planningonrighttrack.
8.FacilitatesDecision-making:
Controlhelpindecidingthefuturecourseofaction,wheneverthereis
deviationbetweenstandardandactualperformance.
9.FacilitatesDecentralization:
Decentralizationofauthorityisnecessaryinbigenterpriseandvarious
departmentusecontroltechniquetoachievetheirtargetorgoals.
10.HelpsinImprovingEfficiency:
Ithelpsinimprovingorganizationalefficiencythroughregular
monitoringactivitiesonperformanceofeveryperson.
34

LimitationsofControl:
Itisexpensiveandtime-consumingprocess.
Itdoesn’tconsidertheexternalfactorsliketechnologieschanges,
political,socialandgovernmentprocedures.
Humanbehaviourandemployeemoralecan’tbemeasured.
ProcessofControlling(Or)ControllingProcess:
Establishment of
standards
Measurement of
Performance
Comparing actual
performance and
standards
Finding deviationsCorrective actions
35

1.Establishingstandards:
Itisfirststepofcontrolprocess,expressedinquantitativeor
qualitativeterms.
Standardiscriteriaagainstwhichresultscanbemeasured.
Standardsshallbeaccurate,precise,acceptableandworkable.
Someofthestandardsareas–
a)Timestandards–goalwillbesetonbasisoftimelapsein
performingatask.
b)Coststandards–indicatefinancialexpendituresinvolvedperunit
(E.g.)materialcostperunit,costperperson,etc.
c)Incomestandards–relatetofinancialrewardsreceiveddueto
particularactivity.
d)Marketshare–relatetoshareofcompany’sproductinthemarket.
e)Productivity–measuredonthebasisofunitsproducedpermanhour,
etc.
f)Profitability–itissetwithconsiderationofcostperunit,market
share,etc.
36

2.Measuringperformance:
Measurementofactualperformancedoesn’tmeanknowingwhathas
happened.
Performanceshouldbeinquantitativeterms.
Measurementtechniquemaybepersonalobservation,sample
checking,performancereport,etc.
Theperformancecanbemeasuredbyfollowingsteps:
a)Strategiccontrolpoints:Itisnecessarytopickstrategiccontrol
pointsformeasurementlike-
i)Income–itissignificantcontrolpointandmustbeasmuchperunit
oftimeaswasexpected.
ii)Expenses–totalandoperationalcostperunitmustbecomputedand
mustbeadheredto.
iii)Inventory–someminimuminventoryofbothfinishedproductas
wellasrawmaterialskeptinstockasabuffer.
iv)Qualityoftheproduct–standardsofestablishedqualitymustbe
maintainedespeciallyinfoodprocessing,automobiles,etc.
37

v)Absenteeism–excessiveabsenteeismofpersonnelisaserious
reflectionontheenvironmentandworkingconditions.
b)Mechanizedmeasuringdevices:Itinvolveswidevariantoftechnical
instrumentsusedformeasurementofmachineoperationsand
productionprocesses.Thesemeasurementsmaybemechanical,
electronicorchemicalinnature.
c)RationAnalysis:Ratioanalysisisoneofthemostimportant
managementtools.Itdescribestherelationshipofonebusiness
variabletoanother.
d)ComparativeStatisticalanalysis:Theoperationsofonecompany
canbeusefullycomparedwithsimilaroperationsofanothercompany
orwithindustryaverages.Itisaveryusefulperformancemeasuring
device.
e)PersonalObservation:Itcanbeusedincertainsituationasa
measuringdeviceforperformancesandwillhavegeneralideaabout
howpeopleareworking.
38

3.Comparingactualwithstandards:
Tofindoutdeviationandidentifythecauseofsuchdeviations.
Employeemoraleandeffectivenessofhumanresourcesstatements.
Itgivescorrect,quickandfavourableresults.
4.Findingoutdeviations:
Itisfindingoutlocatingthedeviationspointsproperly.
Thecauseofdeviationswhichdependsuponproperaccurateand
timelyinformation.
Deviationbetweenstandardandactualperformanceisbeyondthe
prescribedlimit.
5.Correctionofdeviations:
Itisessentialwithcorrectingdeviationsfromplannedperformance.
Itmaybeaccurateforecastpoorcommunication,defectivemachines,
lackofmotivation,etc.
Managementshouldtakenecessaryactionforcorrectionof
deviations.
39

EssentialsofanEffectiveandEfficientControlSystem:
1.Simplicity:
Agoodcontrolsystemmustbesimpleandeasilyunderstandableand
managerscanapplyiteffectively.
2.Objectivity:
Standardsofperformanceshouldbeobjectiveandspecific,quantified
andverifiable.
3.Promptness:
Itshouldprovideinformationsoonenoughsothatthemanagerscan
detectandreportandtakenecessaryactioninpropertime.
4.Economy:
Controlsystemfollowedintheorganizationmustjustifytheexpenses
involved.
5.Flexibility:
Internalgoalsandstrategiesmustberesponsivetochangesin
environmentandcontrolsystemshouldbeflexiblebasedonchanging
conditions.
40

6.Accuracy:
Controlsystemshouldencourageaccurateinformationinorderto
detectdeviations.
7.Suitability:
Controlmustreflectneedsandnatureofactivitiesoforganization.
8.Forward–lookingnature:
Controlsystemmustbedirectedtowardsthefutureanditwill
conformedwithplansadopted.
9.Motivating:
Agoodcontrolsystemshouldpaydueattentiontohumanfactorand
designedtosecurepositiveactionfromworkers.
10.CorrectiveAction:
Adequatecontroltechniquesshouldnotonlydetectdeviationsand
failuresbutshouldalsodisclosewheretheyareoccurringand
responsibletocorrectthem.
41

MethodsofEstablishingControl:
1.DirectsupervisionandObservation:
Itobservestheemployeesandtheirworkandbringsthemindirect
contactwithworkers.
Supervisorgetfirsthandinformationandbetterunderstandingwith
theworkers.
2.FinancialStatements:
Itgivesasummaryofincomeandexpensesforspecifiedperiod,
whichshowsfinancialpositionoforganization.
Ithelpstounderstandtheprofitability,liquidityandsolvencyposition
ofbusiness.
3.BudgetaryControl:
Budgetisaplanningandcontrollingdeviceanditisessenceof
financialcontrol.
Itisdoneforallaspectsofbusinesslikeincome,expenditure,
production,capitalandrevenue.
42

4.Breakevenanalysis:
BreakevenanalysisorBreakevenpointispointofnoprofit,noloss.
Ithelpstofindoutcompany’sperformance.
(E.g.)Whenorganizationsells50Kcars,itwillbreakeven.(i.e.)any
salebelowthispointwillcauselossesandabovethispointwillearn
profits.
5.ReturnonInvestment(ROI):
Itisatooltoimprovefinancialperformanceandhelpsbusinessto
compareitspresentperformancewiththatofpreviousyear’s
performance.
6.ManagementbyObjectives(MBO):
Itfacilitatesplanningandcontrolandfulfillrequirementsrelatedto
objectivesforindividuals,periodicevaluation&regularfeedbackand
achievementofobjectives.
7.ManagementAudit:
Itisanevaluationandexaminesfullmanagementprocess(i.e.)
planning,organizing,directingandcontrollingtocheckcompany’s
plans,objectives,policies,procedures,etc.
43

8.Self-Control:
ItisSelf-directedcontrolandevaluateone’sownperformanceand
takecorrectivemeasuresasandwhenrequired.
Itcontroltheimportantactivitiesofthesubordinates.
Controltechniquesprovidemanagerswithtypeandamountof
informationtheyneedtomeasureandmonitorperformance.
9.StatisticalDataandReports:
StatisticalDataandReportsDatahelpinapplyingstatistical
techniquesofaverages,regression,correlationetc.topredict
company'sperformance.
10.QualityControl:
Itisusedtosustainthequalityofproductorservicetosatisfy
customerneeds.
11.TotalQualityManagement(TQM):
Itisfocusedoneveryorganizationalactivityandaimsatcontinuous
improvementtofocusontotalsatisfactionofconsumers.
44

45
Unit 5 -POM Mr.T.Somasundaram

46Unit 4 -POM Mr.T.Somasundaram