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Controlling
The basic management function of
(1) establishing benchmarks or
stanars
(!) com"aring actual "erformance
against them# an
($) taking correcti%e action# if re&uire'
Defnition
Managerial control is one of the "rimar(
functions of management# an it in%ol%es
setting "erformance stanars# measuring
"erformance# an taking correcti%e actions
)hen necessar('
Techniques and Types of Control
*utual a+ustment
,irect su"er%ision
-tanari.ation of )ork "rocess
-tanari.ation of out"uts
Types of Traditional Control
Techniques
1' ,irect -u"er%ision an Obser%ation
!' /inancial -tatements
$' 0ugetar( Control
1' 0reak 2%en 3nal(sis
4' Return on In%estment (ROI)
5' *anagement b( Ob+ecti%es (*0O)
6' *anagement 3uit
7' *anagement Information -(stem (*I-)
8' 92RT an C9* Techni&ues
1:' -elf;Control
BUDGET
The main characteristics of a budget
are:
It is "re"are in a%ance an is eri%e from the
long; term strateg( of the organi.ation'
It relates to future "erio for )hich ob+ecti%es or
goals ha%e alrea( been lai o)n'
0ugetar( Control
0ugetar( control is the use of the
com"rehensi%e s(stem of bugeting
to ai management in carr(ing out
its functions like "lanning# co;
orination an control'
-te"s in 0ugetar( control
0uget mannual
D!"TGE# $% BUDGET#
The 0uget assist "lanning
The buget communicates an co;
orinates
The buget hel"s )ith ecision <making
The buget can be use to monitor an
control
The buget can be use to moti%ate
Limitations of 0uget 3n 0ugetar(
Control
The bene=ts of bugets an 0ugetar(
control
0uget information ma( not be accurate
The buget ma( emoti%ate
0uget ma( lea to isfunctional
management
0ugets ma( be set at too lo) a le%el
T("es of 0uget
-ales 0uget
9rouction 0uget
9urchase 0uget
9ersonnel 0uget
Research > ,e%elo"ment 0uget
Ca"ital 2?"eniture 0uget
Cash 0uget
*aster 0uget
*anagement 3uit
3 s(stematic assessment of methos
an "olicies of an organi.ation@s
management in the aministration an
the use of resources# tactical an
strategic "lanning# an em"lo(ee an
organi.ational im"ro%ement'
*anagement 3uit
Functions Of Management Audit
*anagement auit ienti=es the ob+ecti%es of an
organi.ation if such ob+ecti%es are not set u"'
!' *anagement auit allocates the o%erall ob+ecti%es of
an organi.ation in small "arts'
$' *anagement auit re%ie)s the structure of
organi.ation an asset of the organi.ation an ecies
)hether goals can be obtaine or not'
1' *anagement auit e?amines all the sco"e of )ork
an liabilit( centers'
4' *anagement auit "ro%ies %aluable suggestions to
the management after the e%aluation of all abo%e facts'
Objectives Of Management
Audit
To formulate the goal of an organi.ation'
!' To ensure the ful=llment of goals'
$' To hel" management to im"ro%e the
acti%ities an "roceures'
1' To hel" all the members of
management to make eAecti%e
ischarge of their uties'
4' To hel" in the im"ro%ement of "ro=ts'
*anagement Information
-(stem
*I- is e=ne as the s(stem that
"ro%ies information su""ort for
making in the organisation
Role of *anagement Information
-(stem
Im"act of *I-
*anagement /unctions
Bnerstaning 0usiness
-(stemi.ation of 0usiness
o"eration
,irecting To)ars goals
*anagement 2Ccienc(
Reuction of *an"o)er O%erhea
*anagement as a Control
-(stem
2arl( Darning *echanism
9erformance -tanars
-trategic control
/eeback
3ccurate an timel(
Realistic
The Information /lo)
2?e"tion 9rinci"le
0reak 2%en 3nal(sis
0reake%en anal(sis e?amines the
short run relationshi" bet)een
changes in %olume an changes in
total sales re%enue# e?"enses an
net "ro=t
3lso kno)n as C;E;9 anal(sis (Cost
Eolume 9ro=t 3nal(sis)
,
Decision ma&ing and
Brea&e'en nalysis:
E(amples