Controlling (Shiva

8/3/2019 Controlling (Shiva

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CONTAINS:-

Definition of control

Need of control

Types of Control

Steps in a control process Control Techniques

Problems in the Control process

The Planning-Controlling Link

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DEFINITIONOFCONTROL

-Is the process of monitoring activities to ensure that theyare 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.

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DEFINITION CONTD.

In the words of George R Terry, Controlling is

determining what is being accomplished, that theperformance takes place according to plans.

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NEEDFORCONTROL

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1. To measure progress:-

control process measure progress toward goals

2. To uncover deviations :-

Major events which tends to pull an organization offtarget 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


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TYPESOF CONTROL

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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.


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TYPESCONTD..

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2. Concurrent Control:-

A types of control that takes place while a work activity is inprogress

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 themanager has the information, the problems have already

occurred and led to waste or damage.


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STEPSINACONTROLPROCESS

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1. Establishing Standards

Standard tends of following types:-

Physical Standards,

Cost standards,

Revenue standards,

Capital standards andIntangible standards

- First step in control process is to established

standards against which result can be measured.


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STEPSCONTD.

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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:-


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CONTROLTECHNIQUES

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Old control techniques

Budgeting

Sales Budgets

Selling and Distributing Budget

Capital Expenditure Budget

production Budget

Cash Budget

Master Budgets

Production Cost Budget

- Preparation of budget is, in effect, the step of establishing

standards

Types of Budgets:


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Standard Costing

Standard Costing s the one of the techniques of cost control and it isbeing increasingly used by modern business concerns for the purpose

of the cost reduction and control.

CONTROLLINGTECHNIQUESCONTD

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markup on actual cost

System of accounting under which each departmental head is main

responsible for the performance of his department

Markup on standard cost

Negotiated prices

Market prices

Responsibility Accounting


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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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Returns on investment


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Internal and External Audit

Top Management

sale

Internal and External Audit


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PROBLEMSINTHECONTROLPROCESS

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1. Magnitude of change

2. Time rate of change

5. Workers, Resistance

4. Erroneous Standards

3. Information overload


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THE PLANNING AND CONTROLLING LINKS

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Controlling (Shiva

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