Assignment On

Controlling
Agenda:

 Introduction
 Basic Control Process
 Types Of Controlling
 Best Control in Organization
 Barriers
 Traditional Control Devices
 Advance Techniques
Introduction:

 A process of monitoring performance and taking

action to ensure desired results.

 It helps ensure that objectives and accomplishments

are consistent with one another throughout an
organization.

 It sees to it that the right things happen, in the right

ways, and at the right time.
 It helps maintain compliance with essential
organizational rules and policies.

 Done well, it ensures that the overall directions of

individuals and groups are consistent with short and long
range plans.

“The Management function of Controlling is the measurement and

correction of performance in order to ensure that the firm’s objectives
and plans devised are accomplished effectively and efficiently to the
fullest extent.”
Basic Control Process
 A Portion Of The Organizational
1)People
2)Money
3)Raw Materials
4)Machines

Work No Corrective
Performance
Continues Action
Equivalent To
Necessary
Standard

Controllin Measure Compare

g begins Performance Measurements To
Standards

Take Corrective Performance

Action: Significantly
New Work Change Plans,
Situation Different from
organizations, or Standards
Begins influencing methods.

Output
 Establishment of Standards :

 Standards are simple criteria of performance.

 These standards are set against the performance
which is to be evaluated
 Standards must be consistent with strategy, for a
low cost strategy, standards should focus closely on
cost.
 Two types of standards:
(a)Output Standard : measures performance on terms
of quantity, quality, cost, or time.
(b)Input Standard : - measures work efforts that go
into a performance task.
Examples of Standards:

 Profitability Standards

 Market Position Standards

 Productivity Standards

 Social Responsibility Standards

 Standard reflecting the relative balance between

short and long range goals
Measuring actual performance:

 Measurements must be accurate enough to spot

deviations or variances between what really
occurs and what is most desired.
 Measurements should be on a forward looking
basis so that deviations can be detected in
advance.
 Without measurement, effective control is not
possible.
Comparing results with set
standards
 The comparison of actual performance with
desired performance establishes the need for
action.
 Managers must decide if performance actually
deviates.
 Ways of making such comparisons include:
 Historical / Relative / Engineering
 Benchmarking
Take necessary action:

 Once the problem has been identified, corrective

action can focus on one or more of the three
primacy management functions:
(a)planning,
(b)Organising and
(c)Influencing

“Corrective action is managerial activity aimed at bringing

organizational performance up to the level of performance
standards.”
Types of Controlling:

 Pre control or feed-forward control refers to the

control that take place before work is performed.

 Concurrent control refers to the control that

takes place as work is being performed.

 Feedback control refers to the control that

concentrates on the past organisational
performance.
Best control in organisation are:

 Strategic and results oriented

 Timely and exception oriented

 Tailored to plans and positions

 Encourage self-control

 Fair and objective

Cont..
 Flexible

 Understandable

 Economical in nature

 Positive in nature

 Tailored to individual managers and their

responsibilities.
Barriers
 Control activities can increase employees
frustration with their jobs and this in turn will
decrease the morale level.

 Can encourage the falsification of reports.

 Can create undesirable overemphasis on short term

objectives as compared to long term.

 Can cause the perspectives of org.members to be

too narrow for the good of the organization.
Traditional Control Devices:

 The Budget

 Break-even point analysis

 Operational Audit

 Personal observation
The Budget

 Widely used device for management control.

 It is the formulation of plans for a given future
period in numerical terms.
 Statement of anticipated results:
 In financial terms : Revenue, Expense and
Cash Budgets.
 In Nonfinancial terms : Labor hours,
Materials, physical sales volume,etc
Various types of Budgets:

 Revenue and Expense Budgets.

 Capital Expenditure Budgets

 Cash Budgets

 Balance Sheet Budgets

 Time, Space, Material and product budgets.

Break-Even Point Analysis

 Depicts the relationship of sales and expense

in such a way as to show at what volume
revenues exactly cover expenses.
 It is an interesting control device.
 Break – Because it emphasizes the marginal
concept.
Operational Audit & Personal
Observation:
 Operational Audit :- is the regular and
independent appraisal, by a staff of internal
auditors, of the accounting, financial and
other operations of the business.

 Personal Observation :- In any preoccupation,

one should never overlook the importance of
control through personal observation.
Advanced Techniques:

 Program Evaluation and Review Technique

(PERT)

 Just-In-Time inventory Control (JIT)

 Decision Tree Analysis

Program Evaluation and Review
Technique (PERT)
 PERT is a network of project activities
showing both the estimates of time
necessary to complete each activity and the
sequence of activities that must be followed
to complete the project.
 PERT network contains 2 primary elements:
(a) Activities – set of behavior within a project.
(b) Events – completion of major project tasks.
Steps in designing the PERT
network:
 Step (1) : List all the activities / events

 Step (2) : Determine how much time

 Step (3) : Design a PERT network that reflects

all the information

 Step (4) : Identify the critical path

 Electric
Complete

Lath &
Plaster
Walls

Plumbing Paint
Interior
Walls
Complete Decoration
Start

Foundation Frame Install Trim Interior

Start
Complete Complete Millwork Finish Decoration

Sliding Exterior House

Complete Complete Ready

PERT Network design for building a house.

Just-In-Time (JIT)

 It is a technique for reducing inventories to

a minimum.
 It is a concept of delivering the products
“just-in-time” to be used.
 Works best in a company which
manufactures standard product with
consistent demand.
 Ex. Wal Mart
Decision Tree Analysis

 It is a statistical and graphical multi phased

decision making technique that can be used
in controlling.
Thank - You
 By::
Ravi R Gupta
Lino James Abraham
Ritu Gupta
Harsh Mehta
Anita Yadav