CONTAINS:Definition of control Need of control Types of Control Steps in a control process Control Techniques Problems in the Control process

ocess The Planning-Controlling Link

DEFINITION OF CONTROL
-Is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations

In the words of E.F.L. Brech, Control is checking current performance against predetermined standards contained in the plan, with a view to ensuring that adequate progress and satisfactory performance.

DEFINITION CONTD.

In the words of George R Terry, Controlling is determining what is being accomplished, that the performance takes place according to plans.

NEED FOR CONTROL

1. To measure progress: control process measure progress toward goals

2. To uncover deviations :Major events which tends to pull an organization off target are as follows: Change Objective and comprehensible Flexible Economic Prescriptive and operational Acceptable to organization members Reveal exceptions at strategic points Motivate people to high performance

TYPES OF CONTROL
1. Feedforward Control:A type of control that focuses on preventing anticipated problems since it takes place in advance of the actual work activity. Taking managerial action before a problem occurs.

Feedforward controls are desirable because they allow manager to prevent problems rather than having to correct them later after the damage.

TYPES CONTD..

2. Concurrent Control:A types of control that takes place while a work activity is in progress Manager can correct problems before they become too costly

3. Feedback Control: A types of control that takes place after a work activity is done. Major drawback of feedback control is that by the time the manager has the information, the problems have already occurred and led to waste or damage.
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STEPS IN A CONTROL PROCESS

1. Establishing Standards

- First step in control process is to established standards against which result can be measured.
Standard tends of following types:Physical Standards, Cost standards, Revenue standards, Capital standards and Intangible standards

STEPS CONTD.

2. Measuring and Comparing Actual results Against Standards:-

- Second step in the controlling process is to measure the performance and compare it with the predetermined standards.

3. Taking corrective action:-

CONTROL TECHNIQUES
Old control techniques
Budgeting
- Preparation of budget is, in effect, the step of establishing standards
Types of Budgets: Sales Budgets Selling and Distributing Budget production Budget

Production Cost Budget

Capital Expenditure Budget Cash Budget Master Budgets
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CONTROLLING TECHNIQUES CONTD

Standard Costing
Standard Costing s the one of the techniques of cost control and it is being increasingly used by modern business concerns for the purpose of the cost reduction and control.

Responsibility Accounting System of accounting under which each departmental head is main
responsible for the performance of his department
markup on actual cost Markup on standard cost Market prices Negotiated prices
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CONTROLLING TECHNIQUES CONTD

Financial Statement and Ration Analysis

The ratios most commonly used by organization are as follows Liquidity ratios Debt ratios Profitable ratios Operating ratios

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CONTROLLING TECHNIQUES CONTD

Returns on investment

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CONTROLLING TECHNIQUES CONTD

Internal and External Audit

Top Management sale

Internal and External Audit

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PROBLEMS IN THE CONTROL PROCESS

1. Magnitude of change

2. Time rate of change

3. Information overload

4. Erroneous Standards
5. Workers, Resistance

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THE PLANNING AND CONTROLLING LINKS

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