Control & its Process

- Sujith Raman
 Control

Consists of knowing the extent to which actions are in conformity with

plans adopted and instructions issued so that errors and deviations are
promptly reported and analysed, and suitable corrective actions are taken.
 Control

Consists of knowing the extent to which actions are in conformity with

plans adopted and instructions issued so that errors and deviations are
promptly reported and analysed, and suitable corrective actions are taken.
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action

Operation Administration
Phase Phase
 Steps of Controlling

Establishment of Goals and Standards

Measurement of Actual performance against
standards
Corrective Action
Follow through Action
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Requirements of Effective
Control System
1. Feedback
2. Control should be Objective
3. Prompt Reporting of
Deviations
4. Forward – looking Control
5. Flexible Control
6. Organisational Suitability
7. Control should be
Economical
8. Strategic Point Control
9. Control should be simple to
understand
10.Control should suggest
Corrective Actions
11.Worker – focused Control
 Budgetary Control
Budget
A Financial and/or quantitative statement prepared prior to a
defined period of time of the policy to be pushed during that
period for the purpose of attaining a good objective.
 Budgetary Control
Budget
A Financial and/or quantitative statement prepared prior to a
defined period of time of the policy to be pushed during that
period for the purpose of attaining a good objective.

Budgeting
Refers to making of a plan or the budget relating to different
phases of operations for a defined period in the future.
 Budgetary Control
Budget
A Financial and/or quantitative statement prepared prior to a
defined period of time of the policy to be pushed during that
period for the purpose of attaining a good objective.

Budgeting
Refers to making of a plan or the budget relating to different
phases of operations for a defined period in the future.

Budgetary Control
The establishment of objectives relating to the responsibilities
of executives to the requirements of a policy and the continuous
comparison of actual with budgeted results, either to secure by
individual action the objective of that policy or to provide a basis
for its revolution
 Budgetary Control
Elements:

Determination of Objectives
Noting steps to achieve objectives
Translate – Quantitative and Monetary terms
Constant Comparison
Purpose of Budgeting

To Develop an Organised Procedure for Planning

Means of Co – ordination
A Basis for Control

Specific Purposes
Control Cost
Increase Efficiency in Production
Determining Capital Requirements
Encouraging R & D
Increase Utility of Cost Records
q Types of Budget
q Budgeted Balance Sheet
q Budget Committee
q Flexible Budget
 Benefits of Budgeting
• Diverse actions can be expressed in Numerical
terms
• Maximum Efficiency
• Expenditures beyond Budget are not incurred
• Budgets serves as a target
• No overlapping of activities
• Comparison shows week areas
• Can grow at faster rate
• Profit Planning
 Dangers of Budgeting
• Over budgeting can happen
• Department goals may supersede organisation
goal
• Grows from Precedent
• Doesn’t yield quick results
• Gives an illusive definiteness as it quantifies
plans
 Essentials of Budgeting
• Goals and objectives clearly defined
• Should be administered
• Should be prepared for appropriate period
• Should be flexible
• Limiting factors must be identified
• Responsible managers should be considered
while preparing budget
• Sufficient time must be allocated
• Standard costing must be used
• Proper reporting
 Reporting
• Should be factual and objective
• Should be for a definite period of activity
• Should be brief and concise
• Should show what is exceptional to draw
attention
• Not used reports should be shelved
• A copy of report should be sent to person
responsible as well
• The report must be prompt
 ZBB
A method of budgeting in which all expenses
must be justified for each new period. Zero-
based budgeting starts from a "zero base" and
every function within an organization is
analyzed for its needs and costs. Budgets are
then built around what is needed for the
upcoming period, regardless of whether the
budget is higher or lower than the previous one.
 Traditional Non –
Budgetary Control Devices
• Break – even Analysis
 Traditional Non –
Budgetary Control Devices

• Internal Audit
• Statistical Data
• Personal Observation
Non - Traditional Control
Devices

Network Analysis

Management Audit

Total Quality Management

 Network Analysis

Critical Path Method PERT

 Management
Audit
Different from Financial Audit

Scope of Management Audit

Appraisal Areas
Economic function Directorate Analysis

Corporate Structure Production Efficiency

Health of Earnings Fiscal Policies

Service to Shareholders Sales Vigor

R&D Executive Evaluation

Management Self Audit

Management Audit by Consultants
 TQM

Management Economic Consideration Technical

Quality of
Quality of
Planning Design and Statistical
conformance
Performance method for
process
Process quality assurance

Organising Controlling Product and Inspection

Process and
design measurement
HRM structure structure

Reliability Statistical
Quality
Employees techniques Process Sampling
Improvement
Involvement structure control Techniques
& problem
and/or team techniques
solving
structure
structure
Control of Over all
Performance
Control of Over all
Performance
Budget summaries
and reports
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Internal and External
Auditing Control
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Internal and External
Auditing Control
Control through Key
Results
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Internal and External
Auditing Control
Control through Key
Results
Control through Inter
firm comparison
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Internal and External
Auditing Control
Control through Key
Results
Control through Inter
firm comparison
Enterprise Self Audit
Control of Over all
Performance
Budget summaries
and reports
Profit and Loss
Control
Control through return
on Investment
Internal and External
Auditing Control
Control through Key
Results
Control through Inter
firm comparison
Enterprise Self Audit

End of the
Session