CONTROLLING

prepared by (1) Ashwin soni (2) jigar limbachiya (3) Vishal patel (4) Manan patel (5) Bhavik shah

What is Controlling?

Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.

The Basic Control Process

The basic control process involves three steps:

Establishing standards Measuring performance against these standards Correcting variations from standards and plans

Standards are criteria of performance

Principle of Critical Point Control

Effective control requires attention to those factors critical to evaluating performance against plans. Examples of critical point standards

1. physical standards, 2. cost standards, 3. capital standards, 4. revenue standards, 5. program standards, 6. intangible standards, 7. goals as standards, and 8. strategic plans as control points for strategic control

What is Strategic Control?

Strategic control comprises systematic monitoring at strategic control points and modifying the organization's strategy on the basis of this evaluation.

What is Benchmarking?

Benchmarking is an approach for setting goals and productivity measures based on bestindustry practices. Three types of benchmarking:
Strategic Operational Management

Control as a Feedback System

Management control is usually perceived as a feedback system similar to that which operates in the common household thermostat.

Fig. Feedback Loop of Management Control

Feed forward Control

Managers need for effective control a system that will tell them potential problems, giving them time to take corrective action before those problems occur. Feed forward systems monitor inputs into a process to ascertain if the inputs are as planned; if they are not, the inputs or the process is changed in order to obtain the desired results.

Requirements for Feed forward Control

1. Make a thorough and careful analysis of the planning and control system, and identify the more important input variables. 2. Develop a model of the system. 3. Keep the model up to date, reviewing it regularly to see whether the input variables identified and their interrelationships continue to represent realities. 4. Collect data on input variables regularly, and put them into the system. 5. Regularly assess the variations of actual input data from planned-for inputs, and evaluate the impact on the expected end result. 6. Take action.

Control of Overall Performance

Many overall controls in business are financial. The profit and loss statement shows all revenues and expenses for a given time, so it is a true summary of the results of business operations. Return-on-investment control measures both the absolute and the relative success of a company or company unit by the ratio of earnings to investment of capital.

Bureaucratic and Clan Control

Bureaucratic control is characterized by the wide use of rules, regulations, policies, procedures, and formal authority. Clan control is based on norms, shared values, expected behavior, and other cultural variables.

Requirements for Effective Controls

Tailoring controls to plans and positions Tailoring controls to individual managers Designing controls to point up exceptions at critical points Seeking objectivity of controls Ensuring flexibility of controls Fitting the control system to the organization culture Achieving economy of controls Establishing controls that lead to corrective action

What is Budgeting?
Budgeting

is the formulation of plans for a given future period in numerical terms.

Types of budget
(1)

zero base budgeting (2) Traditional non budgetary control devices (3) Time-event network analyses

Zero-base budgeting
Zero-base

budgeting is dividing enterprise programs into packages composed of goals, activities, and needed resources and calculating the costs for each package from base zero.

Traditional non budgetary control

Statistical

data, analysis of specific area, the operational audit and independent appraisal and personal observation are some process of traditional non budgetary control

Time-Event Network Analyses

Gantt Charts
The Gantt chart shows the time relationships between the events of a production program.

Milestone Budgeting Program Evaluation and Review Technique (PERT)

PERT is a time-event network analysis system in which the various events in a program or project are identified, with a planned time established for each. The critical path is the sequence of events that takes the longest time and has zero (or the least) slack time.

Transition from Gantt cart to pert

PERT Flowchart

Information Technology

Data are the raw facts that may not be very useful until they become information, i.e., after they are processed and become meaningful and understandable by the receiver.

Information technology (cont..)

The management information system is a formal system of gathering, processing, and dispersing information internal and external to the enterprise in a timely, effective, and efficient manner to support managers in their jobs.

The impact of it on different organizational levels

Information needs vary at different organizational levels. Therefore the impact of information technology will also be different at various activities. like (1) supervisory level managers (2) middle-level managers (3) top level managers

Opportunities and Challenges Created by Information Technology

Resistance to computer use Speech recognition devices Telecommuting

Telecommuting means working at a computer terminal at home instead of commuting to work.

Computer networks The Internet

Opportunities and Challenges Created by Information Technology

Other types of networks

Intranet and extranet Groupware makes it possible for a group of people on a network to collaborate with others over long distances at the same time.

Groupware

Information security

The Digital Economy, E-Commerce, and M-Commerce

The emerging digital economy Four kinds of Internet transactions Business to Consumers (B2C) Consumer to Business (C2B) Consumer to Consumer (C2C) Business to Business (B2B) M-commerce and wireless communications

Four kinds of Internet transactions

(1) Business to consumer (B2C) ex : buying a laptop from apple online are example of B2C transactions.

(2) Consumer to business(C2B) ex : bidding for airline tickets by would-be flyers through priceline.com

Four kinds of Internet transactions

(3) Consumer to consumer (C2C) ex: The eBay auction web sites offers C2C transactions through which individuals can sell items. (4) Business to business (B2B) ex: if two largest car makers General motors and Ford plan to transfer all purchasing to the web within next few years

Customer Relationship Management (CRM)

Focusing on the needs of customers Coordinating of sales, marketing, & service CRM means promoting the interactions between customer and the company by collecting, analyzing and using the information to serve the client Concern about cost & privacy

QUESTIONS PLEASE ?