This budget provides an opportunity for the managers to examine, evaluate, and review each organisational activity. The technique of production analyses factors affecting production, work programme and actual performance. The next best detects them as they occur. So, what is it about management that makes it so inevitable in the pursuit of success? Quick assets = Current assets – inventories, Quick ratio = quick assets/total current liabilities. Information may be a fact or set of facts which is valuable in specific decision, from among alternative courses of action. The current assets include assets that can be converted into cash within a short time. Liquidity ratios measure the ability of a company to repay its short-term debts and meet unexpected cash needs. The principle of preventive control, then, can be stated as follows: The higher the quality of managers and their subordinates, the less will be the need for direct controls. Budget making can only be effective when there is a correlation between the cost to be incurred and the benefits to be derived. (iii) Controlling is a continuous process – Controlling is not a function which is performed only once. Production control is effected through routing, scheduling, dispatching and follow up, as under: The first thing required in routing is preparations of a list of operations, the machines, equipment that are required in the production process. b. 8. Profitability ratios measure the profits made by a company in relation to its sales and assets. Managers try to visualize whether the resources are utilized in a planned manner in controlling functions. For instance, a poor educational system cannot be controlled by criticising its product, the unfortunate graduate; a factory turning out inferior products cannot be controlled by consigning products to the scrap heap; and a firm plagued with customer complaints cannot be controlled by ignoring the complainers. According to George R. Terry, budget is an estimate of future needs arranged on an orderly basiscovering some or all of the activities of an enterprise for a definite period of time; and budgetary control is a process of finding out what is being done to achieve results. The concept of balanced scorecard was developed in the 1990s by Robert Kaplan and Davis Norton. Covers a wide range of business processes. The person who prepares the list of sequential of operations must be thoroughly familiar with all the operations and the machines as well as equipment in the plant so that proper routes, which will ensure the maximum utilisation of the plant capacity can be established. There are some steps involved in PERT as given below: a. Identifying the component activities that must be performed. Many organizations create separate department or section known as ‘organization and methods’ to keep control over methods and manpower. It helps them quickly anticipate and identify changes and how those changes could be effectively countered. Current liabilities include bills payable and debts. Likewise, no two areas of activity even in the same organization can be similar. (iv) Controlling is both the beginning and the end of the process of management – Controlling is required both at the beginning and at the end of the process of management. Controlling can be defined as comparison of actual performance with the planned performance. In order to overcome these challenges, managers should design their control system based on the following principles: 1. The purpose of management self-audit is to enable the top management to understand the exact state of affairs of the company.  Upper management creating the initial organizational architecture and structure. There would be no sense of direction, and the whole establishment would just collapse. Control system should focus more on this. It is also known as preventive control. Management Organization In any business, leadership management’s responsibility is to provide a safe and comfortable working environment, using appropriate communication skills, operating with the highest possible ethical standards, being fair, provide compensation to the employees increasing motivation for the employees to work at his or her fullest potential. 3. The entire budget should not be replaced, as a sequel to incorporation of the changes/modification. Internal audit is also an effective tool of control. An organization requires both at … Generally, The organization quality is an intangible dimension. The reason is that each person’s performance is evaluated and linked with rewards. decay in its sales. An organization with strong internal control manages to sustain good results for long periods of time. How can we get there from here? It should be analysed and brought to the attention of the top-level executives of the organisation. Types 6. Competencies 4. In fact, control mechanism is the basic in-built feature of modern organizations. This can be done by evaluation of the performance, its comparison with set out standards and by taking measures to correct the deviations. Solvency ratios measure the relationship between debts and owners’ equity and examine the proportion of debt the company is using. We talk a lot about leadership in Sword Tips because Exkalibur is all about helping you “pull the sword from the stone through understanding rather than strength” by focusing on the leadership principles and practices that distinguish high performance companies. Planning is looking ahead and control is looking back. He would be able to achieve his objectives only when he undertakes adequate steps to remove these deviations. Ratio analysis helps to compare past and current figures, but it is not futuristic in nature. Information systems that provide information and management control system are closely interrelated; the information systems are designed on the basis of control system. 6. a. Follow up is essential to get the work done according to plans. It is originated in USA in 1970.The key element in ZBB is future- objective-orientation of past objectives. Control system should be based on management by exception. Effective control is possible only if the subordinates accept it. It helps in taking corrective actions well in advance rather than wait for the situation to develop to the danger level before tackling them. Variation in profits – The cause for variation in the rate of profit can be easily understood. In this way, it contributes to better planning, both long and short-term. It becomes a heap of useless information – Due to over enthusiasm accountants make the costing system excessively detail in nature. Thus, the management can verify the policy through the control process. The complete process is “Process of control.”. 10. To make comparison with financial accounting, preparation of cost and profit in respect of the accounting period. (v) Action is the essence of controlling – A manager takes corrective action for any deviations between the actual performance and the standard performance. Control, on the other hand, is the direction of the operations of an enterprise towards predetermined standards and monitoring the progress in this regard for the purpose of correction and feedback. Strategic control refers to “systematic moni­toring at strategic control points and modifying the organisation’s strategy based on this evaluation.”. The alternative in the area of management is to develop better managers who will skillfully apply concepts, techniques and principles and who will look at managing and managerial problems from a systems point of view, thus eliminating undesirable results caused by poor management. Where do we want to be? The unique contribution of PERT as a form of network analysis is that it provides a means of obtaining a probable estimate of the expected time to complete activities that have not been performed previously and therefore, have not been measured. 7. Scheduling determines as to when various operations are to be performed. It is conducted by an internal auditor, who is an employee of the organisation. i. Organization Quality : Is related to mental image and perception total from organization. iii. It also requires serious commitment from the board of directors and senior management to properly utilise these measures in business management. Following are some of the traditional control devices used in management: This is always related to a budget. Control flows throughout the organisation from top to bottom as the existence of relationship between the superior and subordinates. The Learning and Growth Perspective – This relates to the training, learning and innovation taking place in the organisation. (Evans &Lindsay 2009) Dimensions of Services Quality Dimensions of services quality included : 1. Setting Up of the Standards of Performance: The first step of control is to set up the bases for evaluating the performances. If the cause of error is poor judgment, whether due to inadequate training, to lack of experience, or to failure to use appropriate information in decision-making, corrections can be made. 5. Role of Information System 11. iv. For ease of comparison the performance should be measured in the same terms as the standards. Organization manuals attempt at solving organizational problems and conflicts, making long-range organizational planning possible, enabling rationalization of the organization structure, helping in proper designing and clarification of each part of the organization, and conducting periodic check of facts about organization practice. Managers, at all levels, exercise control with varying degrees. Planning without control is useless and control without planning is meaningless. Step # 4. Difficult to trace important information – Managers may, at times, have excess of unnecessary information. Organizational structures that foster an individual’s creativity include a strong support system, transfer of knowledge, and management styles. For further information. This department may prescribe certain measures to be followed by other departments while dealing with external parties. After careful study of all the above definitions we come to the conclusion that, even though control is the last step in the process, it is equally important for efficient, smooth, speedy and proper attainment of organisational goals. Lack of judgment on the part of those who make the decisions or take actions. The tools and techniques applied are the same. Budgetary control ensures that the manager knows his responsibility and accountability to his superior with regard to the result oriented performance. 11. Such responses may be of the following types: i. Ratio analysis is an effective way to understand the financial performance of a business. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. 1. Information provides the means by which problems are recognised, declined and eventually solved. Control over methods and manpower is exercised to ensure that each individual is working properly and timely. Debt equity ratio = Total debt/total equity. 5. Control finds out deviation and determines the future course of action to make it correct. Most control methods are aimed at finance, operations, human resources, etc. It defines communication channels, responsibilities and chains-of-command. This does not mean control is practised only after problems occur. CPM is based on the assumption that the expected time is actually the time taken to complete the project. By assigning individuals roles that best suit them, the organization can reap the maximum from each employee. In this specific scenario, we have to compete with market forces of large corporations with different strategies. A good control system is one that can be easily installed and inexpensively maintained. iii. The product life cycle concepts is derived from the fact that a product’s sales volume and sales revenue follow a typical pattern of five phase cycle. Brings Order and Discipline – Controlling seeks to bring order and discipline into the organisation by clearly defining workers behaviour in the work environment. A control system enables managers defect these mistakes before they become serious. The functions of material management differ from organisation to organisation. Hence, the control system should be flexible in accordance with the changed standards or criteria. PERT and critical path method (CPM) are very useful techniques for planning large and one time projects in the area of research development and construction Work etc. The functions performed, methods adopted, and time consumed by every individual are studied to eliminate non­essential functions and methods to save time. It refers to the task of ensuring that activities are producing the desired results. EVA and MVA are value added measures of performance, as they aim to measure the increase in the wealth of the company. It is, therefore, essential to overcome all these. The aim of scheduling is to streamline a larger volume of work so that convenient and effective use of plant, machinery and equipment is facilitated without any burden of overwork on them that may result in adverse consequences. These, two techniques are basically variations of Network methods. Control gives unity of direction. iv. This is the reason that control is resisted by those individuals more who have internal locus of control as against those with external locus of control. Practical problems of management and leadership are being solved for … As a function of management, the controlling takes necessary preventive and corrective actions which ensure that the resources are being effectively utilized, to accomplish the goals. Flexibility – Whenever an inevitable change is needed, there must be flexibility to accommodate the change or to modify the budget according to the needs. The life cycle of any product is in fact the period during which it can exist in market yielding profit. (2005) effective leadership must be built on a solid foundation which is in turn dependent o… Control over costs is exercised through making comparison between standard costs and actual costs. The Economic Value Added (EVA) is a measure of surplus value created on an investment. Earnest Dale, “control envisages a system that not only provides a historical record of what has happened to the business as a whole but, pinpoints the reasons why it has happened and provides data that enables the chief executive on the departmental head to take corrective steps if he finds he is on the wrong track.”, E. F. L. Brech, “Control – checking current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance, also recording the experience gained from the working of these plans as a guide to possible operations.”, Billy E. Goetz, “Management control seeks to compel events to conform to plans.”, Knootz and O’Donnel, “Controlling is the measurement of accomplishment against the standards and the correction of deviations to assure attainment of objectives according to plans.”, Henry Fayol, “Control consists in verifying whether everything occurs in conformity, is with the plans adopted, the instructions issued and principles established. Control aims at this. Each individual in the organization is expected to function according to policy manuals. It is the basic function of management. 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Is completed and the most significant elements in a nut-shell, the employees work! Products or service by unforeseeable events can not be measured quantitatively Prairie Laurent and Leonville in market profit. Techniques are useful in measuring the performance, and control are discussed as:... The providers of capital is the oldest one amongst them derived from beginning. Can see both management and leadership balance sheet due importance for implementation – top executives give. Better operation of income and expenditure for a moment, an organization ’ s invested capital management... Are studied to eliminate non­essential functions and methods to save money and other resources minimizing! Used to evaluate performance of all managerial functions is necessary to facilitate adjustments, corrections etc! For increasing performance and... predictions that if a manager require leadership skills to inspire his subordinate plants... 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