RrgPrinciples of Management

8/8/2019 RrgPrinciples of Management

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PRINCIPLES OF MANAGEMENT

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 takingaction to ensure desired results.

It helps ensure that objectives and accomplishmentsare consistent with one another throughout anorganization.

It sees to it that the right things happen, in the rightways, and at the right time.



It helps maintain compliance with essentialorganizational rules and policies.

Done well, it ensures that the overall directions of

individuals and groups are consistent with short andlong range plans.

³The 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

Establishment of Standards

Measuring actual performance

Compare results with set standards

If any Deviation ,

Take necessary action



WorkContinues

MeasurePerformance

NewWorkSituation

Begins

No CorrectiveAction

Necessary

CompareMeasurements To

Standards

Take CorrectiveAction:

Change Plans,organizations, or

influencing methods.

PerformanceSignificantly

Different fromStandards

PerformanceEquivalent To

Standard

Output

A Portion Of The Organizational

1)People2)Money

3)Raw Materials

4)M

achines

Controlling begins



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 alow cost strategy, standards should focus closely oncost.

Two types of standards:

(a) Output Standard : measures performance on termsof quantity, quality, cost, or time.

(b) Input Standard : - measures work efforts that gointo 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 spotdeviations or variances between what reallyoccurs and what is most desired.

Measurements should be on a forward lookingbasis so that deviations can be detected inadvance.

Without measurement, effective control is notpossible.



Comparing results with set

standards The comparison of actual performance with

desired performance establishes the need foraction.

Managers must decide if performance actuallydeviates.

Ways of making such comparisons include:

Historical / Relative / Engineering

Benchmarking



Take necessary action:

Once the problem has been identified, correctiveaction can focus on one or more of the threeprimacy 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 thecontrol that take place before work is performed.

Concurrent control refers to the control thattakes place as work is being performed.

Feedback control refers to the control thatconcentrates on the past organisationalperformance.



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 theirresponsibilities.



Barriers

Control activities can increase employeesfrustration with their jobs and this in turn willdecrease 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.

CapitalE

xpenditure 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 andother 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 thesequence 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



ElectricComplete

Lath &Plaster

Walls

Plumbing

Complete

PaintW

allsStart

Interior

Decoration

InstallMillwork

TrimFinish

InteriorDecoration

FrameComplete

FoundationComplete

SlidingComplete

ExteriorComplete

HouseReady

Start

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 productsjust-in-time to be used.

Works best in a company which

manufactures standard product withconsistent 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 AbrahamRitu Gupta

Harsh Mehta

Anita Yadav

RrgPrinciples of Management

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