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Functions of Management
It's object is to point out weaknesses and errors in order to rectify them and prevent recurrence. and principles established. Henri Fayol -1904 . the instructions issued.Control consists of verifying whether everything occurs in conformity with the plan adopted.
Harold Koontz .Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished.
Feedback in the form of performance reports that compare actual results with the budget are an essential part of the control function . and controlling.Concept Process of keeping activities on track Determine whether goals are met Decide changes needed to get back on track May use an informal or formal system of evaluations Employee job assignments Routine problem solving Conflict resolution Effective communications Decision making is not a separate management function. directing. but the outcome of the exercise of good judgment in planning.
Characteristics of Control Control is a continuous process Control is a management process Control is embedded in each level of organizational hierarchy Control is forward looking Control is closely linked with planning Control is a tool for achieving organizational activities .
Management Control >Assure that resources are obtained and used effectively and efficiently in the accomplishment of the organization’s objective >Has financial and non financial performance measurement Concerned with the implementation of strategies and Task control >Done well. it ensures that the overall directions of individuals and groups are consistent with short and long range plans. >It helps maintain compliance with essential organizational rules and policies. . >It helps ensure that objectives and accomplishments are consistent with one another throughout an organization.
Every work is a process .
Closed Looped process .
Wise managers rely on systems to do the control. They get to do know critical happenings from information of their systems .Control to maintain Performance Equipment. Health Everything deteriorate naturally unless maintained – maintenance is important to everything. Control is the maintenance need of management. Work quality.
The best way to ensure performance does not slide down is to always push it even higher. Control acts like a brake to prevent performance from sliding down. But affordable control measures are always imperfect.The Best Control Performance rest on a slope all the time. It has a tendency to slide down. Performance will still slide down. so that it will not have a chance to slide below its original level. Continual improvement effort is the best control .
Planning and Control Cycle Formulating longand short-term plans (Planning) Comparing actual to planned performance (Controlling) Begin Decision Making Implementing plans (Directing and Motivating) Measuring performance (Controlling) .
The Control Process .
The Control Process Establish objectives and standards. Compare results with objectives and standards. Measure actual performance. . Take necessary action.
Input Standards . .Establish Objectives and Standards The control process begins with planning and the establishment of performance objectives.measures work efforts that go into a performance task. or time.measures performance results in terms of quantity. Performance objectives are defined and the standards for measuring them are set. quality. There are two types of standards: Output Standards . cost.
.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.
Comparing Results with Objectives and Standards The comparison of actual performance with desired performance establishes the need for action. Ways of making such comparisons include: Historical / Relative / Engineering Benchmarking .
energy. and concentrates efforts on areas showing the greatest need. There are two types of exceptions: Problems . .Management-by-Exception focuses managerial attention on substantial differences between actual and desired performance.Taking Corrective Action .above standard .Taking any action necessary to correct or improve things.below standard Opportunities . Management-by Exception can save the managers time. and other resources.
What are the similarities and differences in these goals? .Discussion Question A finance professor and a marketing professor were recently comparing notes on their perceptions of corporations. The finance professor claimed that the goal of a corporation should be to maximize the value to the shareholders. The marketing professor claimed that the goal of a corporation should be to satisfy customers.
Control Techniques Financial controls Liquidity ratios Profitability ratios Debt ratios Activity ratios .
Budget controls Top-down budgeting Bottom-up budgeting Zero-based budgeting Flexible budgeting .
Marketing controls Market research Test marketing Marketing statistics .
3. Profit Centers Cost / Expense Centers Investment Centers Revenue Centers .Responsibility Centers 1. 2. 4.
Sales Budget Production Budget Purchase Budget Capital Expenditure Budget Cash Budget Master Budget . 3. 2. 4. 5. 6.Budgetary Control 1.
Advanced/ New Control Techniques Return on Investment Program Evaluation & Review Technique Critical Path Method Total Quality Management & Quality Circles Just-In-Time Scheduling Statistical Quality Control .
Span Control Factors affecting Span of Control Level in the Organisation Type of Work Abilities of the Person Involved The Degree of Decentralisation Control Mechanism .