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.

According to George R. Terry Controlling is determining what is being accomplished, that is evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to plans.

Control and planning are inseparable.Control is a continuous process.Control is forward lookingControl is all pervasiveControl has a positive approach

AuthorityKnowledgeGuidanceDirectionConstraintRestraint

Prentice Hall, 200218-*Feed BackSet Standards

Measure actual performance

Backgroundcontrolling is a FIVE stepsThe performance standards are setspecific goals are created in the planning processMeasuringHow We Measurepersonal observation - permits intensive coverageManagement By Walking Around (MBWA)drawbacks - subject to personal biasesconsumes a great deal of time.18-*

Measuring (cont.)How We Measure (cont.)statistical reports - numerical data are easy to visualize and effective for showing relationshipsdrawbacks - not all operations can be measuredimportant subjective factors may be ignoredoral reports - includes meetings, telephone callsmay be best way to control work in a virtual environmenttechnology permits creation of written record from oral reportdrawbacks - filtering of information

How We Measure (cont.)written reports - often more comprehensive and concise than oral reportsusually easy to file and retrievecomprehensive control efforts should use all four approaches18-*

What We Measurewhat we measure more critical than how we measurecontrol criteria applicable to any management situation:employee satisfaction, absenteeism, and turnoverkeeping costs within budgetscontrol system needs to recognize the diversity of activitiessome activities difficult to measure in quantifiable termsmost activities can be grouped into some objective segments that can be measured

Comparingdetermines the degree of variation between actual performance and standardacceptable range of variation - deviations that exceed this range become significant

BrandSonyVoltaLGVideioconSamsungHaierOnidaBenqT-seriesTotal SalesActual* 913 634 912 622 672 140 220 65 286 4,464

Taking Managerial ActionCorrect Actual Performance - action taken when the performance variation is unsatisfactoryimmediate corrective action - corrects problems at once to get performance back on trackbasic corrective action - identifies reason for performance variationcorrects the source of variationRevise the Standard - variance results from an unrealistic standardstandard, not performance, needs correctiontroublesome to revise the standard downward

Feed back:-The feedback information is provided to the responsible heads of the Dept. If the feedback is positive reveals accomplishment and the manager must encourage.Negative feedback the manager should take corrective actions and alter the operation.

Feed-looking Controlprevents anticipated problemsmost desirable type of control requires timely and accurate information that often is difficult to getFeed forward controltakes place while activity is in progresscorrects problem before it becomes too costlybest-known form is direct supervision

Yes-No ControlWork is stopped at various stages & at certain events for inspection.Check for deviations.After screening GO AHEAD signal is given.(engineering & automobiles products).Post- action controlUsed after the completion of the activity. 18-

EFFECTIVECONTROLSYSTEM

18-*

Budgetary control

Non-budgetary controls

Network analysis & modern techniques

Budgetary control refers to use of a budget as a control technique. A budget is an estimate of future need arranged in an orderly basis, covering some or all the activities of an enterprise for an definite period of time.

It brings in efficiency & economy in the working of business enterprise.

It helps in the determination of periodical objectives.

It introduces precision, discipline, and direction.

It coordinates & integrates the operations.

It provides standards against which the actual performance can be measured.

It motivates subordinates.

It helps in participative management.

It helps in forecasting.

Budget create a rigid financial structure.

It cannot judge the actual results.

They sometimes become expensive, meaningless & cumbersome.

There may be a danger of over-budgeting

Statistical data & chartsInternal auditSpecial reportsConfidential reportsBreakeven analysisInformation controlPersonal observation.

They are the most common form of non-budgetary control. statistical information of the past & data indented for the future can be used for control.

Internal audit: Management can make use the technique of internal audit for checking & controlling operations.

Special reports: Executives can give special reports for certain special projects of non-repetitive situations. Such reports can also be given on the progress & performance of individuals & departments.

In certain organization, there is a practice of getting confidential reports from the supervisors on the abilities and other information about subordinates.

Breakeven analysis: It is an analysis in chart form depicting the cost-volume-profit relationship. The breakeven point is that where the total cost is equal to the total revenue. This charts helps in forecasting, budgeting cash requirement etc.

Information control:With the increased complexities in operations, it has become necessary to have more sophisticated system of collection, processing,Storing & applying the information. This system can be called information control.

Control through personal observation will provide immediate & authentic information regarding the performance & its matching with the standards.

There are two techniques:

CPM( Critical Path Method)

PERT(Programme Evaluation and Review Technique)

CPM differentiates between planning and scheduling of the project.Focuses mainly towards activities. example: Preparation of dealer questionnaire.( 10 days) Dealer survey(20 days) Consumer survey(15 days)

It helps in ascertaining the time schedule.

It makes control easier for the management.

It identifies the most critical elements in the project.

PERT has very popular technique used for project planning and control. It accomplish the project within a short period of time.

The three sets of time used in this techniques are optimistic time, pessimistic time, and normal time.

125387410962 location of site completed3 BUILDING for office selected4 cleaning of building started5 Interior decorator start work 6 Interior decorator finishes work 7 opening of ads n announced8 list of invitees for opng9 invitation sent10 office formally opened1 location of site started

It determines the expected time required for completing each activity. It helps complete the project within a given period of time. It helps management handle uncertainties involved in the project.

PERTCPMIt is an event oriented approach.

It is time based.

It is average time.

It allows uncertainty It is an activity oriented approach.

It is cost based.

It does not average time.It does not allow uncertainty.

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