Control And Its Process - ICSI

1 Control And Its ProcessBatch: FO_J11_01 Subject: ManagementCS Foundation ProgrammeThe ICSI AhmedabadChapterIntroduction Themodernconceptofcontrolenvisagesasyste mthatnotonlyprovidesahistoricalrecordofw hathashappenedtothebusinessasawholebutal sopinpointsthereasonswhyithashappenedand providesdatathatenablethemanagertotakeco rrectivesteps, AccordingtoGeorgeRTerry-" ,evaluatingtheperformanceandifnecessary, applyingcorrectivemeasuressothattheperfo rmancetakesplaceaccordingtoplans." InthewordsofHaynesandMassie-"Fundamental ly, .STEPS IN Control and comparing actual results against corrective Thefirststepinthecontrolprocessistoestab lishstandardsagainstwhichresultscanbemea sured. Thestandardsthemanagersdesiretoobtainine achkeyareashouldbedefinedasfaraspossible inquantitativeterms. Standardsexpressedingeneraltermsshouldbe avoided. and Comparing actual Results against Standards Measurementofperformancecanbedonebyperso nalobservation,byreports,chartsandstatem ents.

2 Ifthecontrolsystemiswellorganised,quickc omparisonofthesewiththestandardfigureisq uitepossible. Aquickcomparisonofactualperformancewitht hestandardperformanceispossible, Corrective Action After comparing the actual performance with the prescribed standards and finding the deviations, the next step that should be taken by the manager is to correct these deviations. Corrective action should be taken without wasting of time so that the normal position can be restored quickly. These steps must be repeated periodically until the organizational goal is OF EFFECTIVE Control , , OF EFFECTIVE Control :Thecontrolsystemshouldbeboth, OF EFFECTIVE Control , , OF EFFECTIVE Control :Organizationisnotmerelyastructureofduti esandfunction, :Agoodsystemofcontrolshouldfindtheperson saccountableforresults, , Control Budget: Afinancialand/orquantitativestatementpre paredpriortoadefinedperiodoftimeofthepol icytobepushedduringthatperiodforthepurpo seofattainingagoodobjective.

3 Budgetarycontrol Theestablishmentofobjectivesrelatingtoth eresponsibilitiesofexecutivetotherequire mentsofapolicyandthecontinuouscomparison ofactualwithbudgetedresults,eithertosecu rebyindividualactiontheobjectiveofthatpo licyortoprovideabasisofitsrevision. Purpose of Budgeting To develop an organized procedure for planning Means Coordination A basis of Control Increase efficiency in the field of production To determine capital requirement To encourage research and development To increase utility of cost recordsBenefits of efficiency of the a by overlapping of the activities Danger in and importance to departmental goals than whole enterprise for Success Objectives must be defined There should be a budget director Must be appropriate for changing condition, strategies of the firm. Must be flexible Limiting factors must be located Sufficient time to be allowed for budget programmeReporting The report should be factual and objective The report should be brief and concise but clear Report must show what is exceptional Report must be shelved which is not used One copy must be given to the responsible person of department.

4 Report should be Budgetary Control observationControl of over all summaries and external Results Profitability Productivity Employee through inter firm comparisonNetwork Analysis Itisatechniqueforplanningandcontrollingc omplexprojectsandforschedulingtheresourc esrequiredonsuchprojects. and PERT Acriticalpathconsistsofthatsetofdependen ttasks(eachdependentontheprecedingone),w hichtogethertakethelongesttimetocomplete . Thispathisshownwiththenetworkdiagram Itdefinesmostcriticalactivitieswheretopa ymoreattention. Itassistinavoidingwasteoftime, and PERT Programevaluationandreviewtechnique(PERT )isavariationonCriticalPathAnalysisthatt akesaslightlymorescepticalviewoftimeesti matesmadeforeachprojectstage. PERT chartsdepicttask,durationanddependencyin formation. Audit ManagementAuditmaybedefinedasthesystemat icanddispassionateexamination,analysisan dappraisalofmanagement soverallperformance.

5 Forexample,productionefficiencyandinvest ment Financialauditiscompulsory,looksintopast andusefulfortheexternalpartiesmore. Managementauditisnotcompulsory, of of and evaluation.