CO NTR OLLING

DEF INI TIO N

Management control is a systematic

effort to set performance standard
with planning objectives
 INTR ODU CTI ON
 “Managerial control implies
measurement of accomplishment
against the standard and the
correction of deviations to assure
attainment of objectives acc to
plans.” - Koontz o’donnell
Cont….
 “Control maintains the equilibrium
between ends and means , output
and efforts”
- Peter drucker
 “ Control consists of verifying
whether everything occurs in
conformity with the plans adopted ,
the instructions issued and the
principles established.” - Henry
fayol
 ELEM ENTS OF
CON TRO L
 Setting standards of performance at
strategic points
 Leading , motivating , supervising,

directing , guiding of employees.

Cont……..
 Measurement of actual performance
 Its comparison with the stated

standards of performance.
 ELEM ENTS OF
EF FECT IVE
CO NTR OL
 Suitabiltiy
 Deviations
 Objective
 Predictions
 Flexible
 Economic
 Underestandable
 Corrective
 CHAR ACTERI STI CS
OF
CO NTR OL
 End fuction
 Continuous process

 Flexibility activity

 Forward looking

 All level exercise

Cont...
 Employee behaviour
 Anticipating probable changes

 Economically realistic

 Accurate- timely - objectives and

comprehensive
 Focuses on strtegic control points
 NEE D OF CONT ROL
 Proper action
 Decision making

 Consistency

 Co-ordination

 Positive impact

 Detection of weakness

 Proper implementation of plans

 PROC ESS OF
CON TRO L
 Establishment of standards
 Measurement of actual performance

 Comparison step

 Corrective action
 CON TRO L
TECH NI QU ES

 OLD TECHNIQUES
 NEW TECHNIQUES
 OL D
TECH NI QU ES
 Personal observation
 Suitable organizational structure

 Unity of policies

 Statistical reports

 Break-even analysis

 Budgetary/financial control
 BUDGET/FINANCIAL CONTROL (statements)
 Balance sheet
 Income statement
 Cash flow statement
 BUDGET/FINANCUAL CONTROL (methods)
 Responsibility centers
--Revenue centers
--Expense centers
--Profit centers
--Investment centers
 FINANCIAL CONTROLS ARE FOR—
--LIQUIDITY
--GENERAL FINANCIAL CONDITION
--PROFITABILITY

 TYPES OF BUDGET
- Operating budget
--EXPENSE BUDGET
-- REVENUE BUDGET
-- PROFIT BUDGET
VARIABLE VERSUS FIXED BUDGET
 NEW
TECH NI QU ES
 MANAGEMENT AUDITS
 RETURN ON INVESTMENT

 RESPONSIBILITY ACCOUNTING
 PERT AN D
CPM
 PERT : Programme evaluation and
review technique
 CPM : Critical path method

 They are oriented towards

achieving better mangerial control
of time spent in controlling a
project.
Cont…….
 SI MIL ARI TY
Under both techniques , a project is
decomposed into activities and
then all activities are integrated in a
highly logical sequence to find the
shortest time required to complete
the whole project.
 DI FFERE NCE

PERT FOCUSES ON TIME WHERE

AS CPM FOCUSES ON THE COST
 LIMIT ATI ONS
OF
CONTR OL
 External factors
 Difficulty in setting standards

 Fixing of responsibility

 Variation and its causes

 CON TROL LING
“ Planning is the basis of control,
Action is the essence of control,
Delegation is the key to control,
& Information is guide to control ”