nefits of efficiency are available only up to an optimum size, i. the
minimum cost per unit of output. Though functional structures
s of scales, once optimum size is surpassed, a subdivision wy
f economies or scale In practice, it is usually difficult jy
isation. The assignment of profit responsibility, ,,
another important consideration for organisation structure design. While the assignment of profit
responsibility is difficult in the case of functional organisations, the divisional structure offers
the advantage of assignment of profit responsibility to the divisional manager. From the cont
systems point of view, this is an important factor in favour of divisional Structure. It may,
however be pointed out that within a division, the departments are organised on functional basis
and therefore the control problem within the division is similar to the control problem confronted
in functional structures. The issues related to conflict and cooperation assumes importance if
there is greater interdependence and if it is difficult to assign specific responsibilities for non.
achievement of targets. In functional structure, inter-functional conflict is likely to be more
intense compared to divisional structures, because by design, divisional structures are more
autonomous except in cases where there are significant inter-divisional transfers. The
network/coupling type of structure is more suited when there is need to create autonomous but
mutually interlocked organisations such as the three-tier structure of cooperative organisations,
in which each tier is an autenomous organisation but is interlocked with the next level. These
structures are also better suited in those situations where there is need for greater inter-enterprise
coordination among Various autonomous enterprises working for the same cause.
FUNCTIONS OF THE CONTROLLER
The controller is the person who is responsible for setting up and operating the system for
supplying control information to management. He is the person of an organisation, He helps
chief executive officer in, setting stindard performance, installing management information
systems and, Lbptiding sound reporting system.
According to Anthony the controller function is a staff function, not a line function
Although the controller is usually Tesponsible for the design and operation of the systenr by
means of which control information is collected and reported, the use of this information in
actual control is the responsibility of line management. The controller is something more than an
accountant and something less than a chief executive. In addition to his responsibility for
_Acollecting figures, the controller may also be responsible for,gntlysing figures, for pointing out
their significance to management, and for making recommendations as to what should be done.
Moreover, he may police the adherence fo limitations on spending laid down by the chit!
executive. He controls the integrity of the assets from theft and fraud, In recent years the
controllership function has become increasingly important in companies generally.”
efficiency. However, the b
size at which it operates at the
offer the advantage of economic:
be called for to take the advantage 0
determine the optimum size for the orgal
Functions of Controller :
1, Assistance to top management in planning. In large organisations there is need for
special studies relating to planned allocation, make or buy decisions, econo™*y
JANA
2
3.
5.
10.
GERIAL BEHAVIOUR AND Ci
67
analysis, financial analysis etc. The controller advises and assist top management in
the performance of these functions, He helps in prescribing policies and procedure
with regard to financial accounting, tax accounting, internal account etc.
Designing Management Information System. Controller helps in designing and
installing management information system. It involves both reporting as well as
interpreting. This function deals with comparing performances with standards. The
controller helps in formulating accounting policy, coordination of systems and
procedures, preparation of reports, interpretation of financial statements and statistics.
Evaluation and Consultation. It means consultation with managers at all levels who
are done to improve the effectiveness of policies, organisation structure, systems and
procedures etc.
Tax Administration. The functions of controller also involve administration of tax
aspects in an organisation. It refers to formulation of policies and procedures relating
to the filing of tax returns and payment of taxes etc.
of tax retur vayment of tax
Govt. Reporting. Another main function of controller is to supervise and co-ordinate
the activities relating to the preparation and submission of reports required by several
goverment agencies.
Appraisal of External Environment, Functions of controller involve appraisal of
certain external factors/forces on the working of the business. Such external forces
include social factors, economic factors, political factors, global and international
factors ete.
Preparing and analyzing performance reports. Functions of controller involve
preparing and analyzing performance reports, interpreting these reports for managers
and analyzing programme and budget proposals from various segments of the
company and consolidating them into an overall annual budget.
Supervising internal audit and accounting control procedures, Functions of
controller involve Supervising internal audit and accounting control procedures to
ensure the validity of information, establishing adequate safeguards against thefts and
fraud, and performing operational audits.
Developing personnel in the controller organisation. Functions of controller
involve developing personnel in the controller organisation and participating in the
education of management personnel in matters relating to the controller function,
Protecting the Assets. Function of the controller involves providing protection for
the assets of the business. This includes establishing and maintaining adequate
internal control, auditing and assuring proper insurance coverage.