Principles of Management Unit 5 Controlling.pptx

Principles of Management

1. Kongunadu college of engineering and technology (AUTONOMOUS) (Approved by AICTE, New Delhi, Affiliated to Anna University, Chennai, Accredited by NAAC B++ Grade , Accredited by NBA, Recognized by UGC with 2(f) & 12(B) An ISO 9001:2015 certified Institution) Namakkal - Trichy Main Road, Thottiam , Trichy - 621215 SUBJECT CODE & NAME 20MG501 PRINCIPLES OF MANAGEMENT Prepared by, Dr. P. Dineshkumar M.E., Ph.D., Assistant Professor, Department of Agricultural Engineering, Kongunadu College of Engineering and Technology . 1 Dr. P. Dineshkumar / AP / AGE / KNCET

2. CONTROLLING Foundation of Control — Importance, Process and Tools — Budgetary and Non-Budgetary Control Methods — Types of Budgets — Auditing — MIS — Operation System — Importance of Operations Management — Designing Operations System — Reporting. Dr. P. Dineshkumar / AP / AGE / KNCET 2

3. The Purpose of Control Adapt to environmental change Limit the accumulation of error Control helps the organization C ope w i t h org a n iz a t ion a l complexity M ini m i ze c o s ts

4. Levels of Control Operational control: Focuses on the processes used to transform resources into products or services. Financial control: Concerned with financial resources. Structural control: How the elements of structure are serving the intended purposes. Strategic control: How effective are the functional strategies helping the organization meet its goals.

5. Levels of Control 2 - 5

6. Who Is Responsible for Control? Control rests with all managers. Large corporations have a controller. What does a controller do? Helps line managers with their control activities. 2 - 6

7. Process of c o n troll i n g 1– 7

8. Steps in the Control Process Establish standards. Measure performance. Compare performance against standards. Determine need for corrective action. The sub-steps: Maintain status quo. Correct deviation. Change standards. 2 - 8

9. Steps in the Control Process 2 - 9

10. 1. Establishing Standards Measurable or tangible( Output Standards ) Standards can be measured and expressed quantitatively are called as measurable standards. They can be in form of cost, output, expenditure, time, profit, etc. Non-measurable or intangible( Input Standards ) There are standards which cannot be measured quantitatively . For example- performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards.

11. 2. Measuring Actual Performance Measurements must be accurate enough to spot deviations or variances between what really occurs and what is most desired. Without measurement, effective control is not possible.

12. 3.Comparing Actual with Standard Deviation is as the gap between actual performance and the planned targets. For example, if stationery charges increase by a minor 5 to 10%, it can be called as a minor deviation. On the other hand, if monthly production decreases continuously, it is called as major deviation .

13. Acceptable Range of Deviation

14. 4.Correction of Deviation Taking any action necessary to correct or improve things. There are two types of exceptions: Problems - below standard Opportunities - above standard

15. Types of Control

16. BUDGETARY CONTROL The establishment of budgets, relating the responsibilities of executives to the requirements of a policy 1– 17

17. Salient features: Objectives: Determining the objectives Activities: Determining the variety of activities Plans: Drawing up a plan Performance Evaluation: Laying out a system of comparison of actual performance Control Action: Ensuring that when the plans are not achieved, corrective actions are taken 1– 18

18. CLASSIFICATION OF BUDGETS 1– 19

19. Long Term Budget: prepared for periods longer than a year ex: R&D Budget Short Term Budget: less than year ex:cash budget Basic Budget: remains unaltered Current Budget: related to the current conditions Fixed Budget: remain unchanged Flexible Budget: various budgets for different levels of activity Functional Budget: the individual functions in an organization Master Budget: Profit & Loss Account 1– 20

20. Typical Productivity Calculations Physical Productivity This is a ratio of the amount of product to the resources consumed. Functional Productivity This is a ratio of the amount of the functionality delivered to the resources consumed Economic Productivity ratio of the value of the product produced to the cost of the resources used to produce it.

21. COST CONT R OL Cost control is the measure taken by management to assure that the cost objectives set down in the planning stage are attained

22. Steps involved in designing process of cost control system: Establishing norms: To exercise cost control it is essential to establish norms, targets or parameters Appraisal: The actual results are compared with the set norms. Corrective measures: The variances are reviewed and remedial measures or revision of targets, norms, standards etc., as required are taken.

23. Advantages of cost control Better utilization of resources To prepare for meeting a future competitive position. Reasonable price for the customers Improves the image of company for long-term benefits. Improve the rate of return on investment.

24. PURCHASE CONTROL Purchase control is an element of material control. The advantages derived from a good and adequate system of the purchase control are as follows: Continuous availability of materials Purchasing of right quantity Economy in purchasing Works as information centre Development of business relationship Finding of alternative source of supply F i x ing r e s pon s ib i l i t i e s

25. MAINTENANCE CONTROL Maintenance department has to excercise effective cost control, to carry out the maintenance functions in a pre- specified budget First line supervisors must be apprised of the cost information of the various materials A monthly review of the budget provisions and expenditures actually incurred in respect of each center/shop The total expenditure to be incurred can be uniformly spread over the year The controllable elements of cost such as manpower cost and material cost can be discussed

26. QUALITY CONTR O L Quality control refers to the technical process that gathers, examines, analyze & report the progress of the project & conformance with the performance requirements

27. steps involved in quality control process are Determine what parameter is to be controlled. Establish its criticality Establish a specification for the parameter to be controlled Produce plans for control Organize resources to implement the plans Install a sensor at an appropriate point Collect and transmit data to a place for analysis Verify the results and diagnose the cause of variance. Propose remedies and decide on the action Take the agreed action and check that the variance

28. Advantages and disadvantages Advantages include better products and services Disadvantages include needing more man power/operations to maintain quality control

29. PLANNING O P E RATIO N S An operational planning is a subset of strategic work plan. It describes short-term ways of achieving milestones and explains how, or what portion of, a strategic plan will be put into operation during a given operational period, in the case of commercial application

30. Like a strategic plan, an operational plan addresses four questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress?

31. Operational plans should contain: clear objectives activities to be delivered quality standards desired outcomes staffing and resource requirements implementation timetables a process for monitoring progress.

32. R e fere n c e s www.slideshare.net www.docstoc.com www.slideworld.com www.nptel .ac.in www.scribd.com http://opencourses.emu.edu.tr/ http://engineeringppt.blogspot.in/ http://www.pptsearchengine.net/ www.4shared.com www.eazynotes.com

33. Book References & PPT materials Stephen P. Robbins and Mary Coulter, 'Management', Prentice Hall of India. Charles W L Hill, Steven L McShane, 'Principles of Management', Mcgraw Hill Education Hellriegel, Slocum & Jackson, ' Management - A Competency Based Approach 1 – 49