Control.pptx
- 1. Control • Controlling can be defined as that function of management which helps to seek planned results from the subordinates, managers and at all levels of an organization. The controlling function helps in measuring the progress towards the organizational goals & brings any deviations, & indicates corrective action.
- 2. • The control function can be viewed as a five- step process: (1) establish standards, (2) measure performance, (3) compare actual performance with standards and identify any deviations, (4) determine the reason for deviations, and (5) take corrective action if needed.
- 3. • The control process of management ensures that every activity of a business is furthering its goals. This process basically helps managers in evaluating their organization’s performance. By using it effectively, they can decide whether to change their plans or continue with them as they are.
- 4. • 1. Establishing goals and standards • The task of fixing goals and standards takes place while planning but it plays a big role in controlling also. This is because the main aim of controlling is to direct a business’s actions towards its goals. If the members of an organization know their goals clearly, they will invest their entire focus in achieving them.
- 5. • It is very important for managers to communicate their organization’s goals, standards and objectives as clearly as possible. There must never be ambiguities amongst employees in this regard. If everybody works towards common goals, it becomes easier for an organization to flourish.
- 6. • Measuring actual performance against goals and standards • Once managers know what their goals are, they should next measure their actual performance and compare. This step basically helps them in knowing whether their plans are working as intended.
- 7. • After implementing a plan, managers have to constantly monitor and evaluate them. They must always be ready to take corrective measures if things are not working properly. In order to do this, they should keep comparing their actual performance with their ultimate goals.
- 8. • Taking corrective action • In case there are discrepancies between actual performances and goals, managers need to take corrective actions immediately. Timely corrective actions can reduce losses as well as prevent them from arising in the future again. • Sometimes, business organizations formulate default corrective actions in the form of policies. This, however, can be difficult to do when it comes to complicated problems.
- 9. • Following up on corrective action • Just taking corrective measures is not enough; managers must also take them to their logical conclusion. Even this step requires thorough evaluations and comparisons. • Managers should stick to the problem until they solve it. If they refer it to a subordinate, they must stay around and see to it that he completes the task. They may even mentor him personally so that he may be able to solve such problems by himself later.
- 10. Types of Control • Budgetary Control • Budgeting simply means showcasing plans and expected results using numerical information. As a corollary to this, budgetary control means controlling regular operations of an organization for executing budgets. • A budget basically helps in understanding and expressing expected results of projects and tasks in numerical form. For example, the amounts of sales, production output, machine hours, etc. can be seen in budgets.
- 11. • Standard Costing • Standard costing is similar to budgeting in the way that it relies on numerical figures. The difference between the two, however, is that standard costing relies on standard and regular/recurring costs. • Under this technique, managers record their costs and expenses for every activity and compare them with standard costs. This controlling technique basically helps in realizing which activity is profitable and which one is not.
- 12. • Financial Ratio Analysis • Every business organization has to depict its financial performances using reports like balance sheets and profit & loss statements. Financial ratio analysis basically compares these financial reports to show the financial performance of a business in numerical terms. • Comparative studies of financial statements showcase standards like changes in assets, liabilities, capital, profits, etc. Financial ratio analysis also helps in understanding the liquidity and solvency status of a business.
- 13. • Internal Audit • Another popular traditional type of control technique is internal auditing. This process requires internal auditors to appraise themselves of the operations of an organization. • Generally, the scope of an internal audit is narrow and it relates to financial and accounting activities. In modern times, however, managers use it to regulate several other tasks.
- 14. • Break-Even Analysis • Break-even analysis shows the point at which a business neither earns profits nor incurs losses. This can be in the form of sale output, production volume, the price of products, etc.
- 15. • Statistical Control • The use of statistical tools is a great way to understand an organization’s tasks effectively and efficiently. They help in showing averages, percentages, and ratios using comprehensible graphs and charts.