CONTROLLINGy GROUP MEMBERS ::

1) Deepti Ramnathkar 2) Rikin Sanghvi 3) Upasana Sanghvi 4) Nikhil Savla 5) Aadit Shah 6) 7)

(35) (36) (37) (38) (39)

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Controlling as a Management Functiony Controlling ::

A process of monitoring performance and

taking action to ensure desired results.

It sees to it that the right things happen, in

the right ways, and at the right time.2

Controlling as a Management Functiony Controlling :: It helps ensure that objectives and accomplishments are

consistent with one another throughout an organization. It helps maintain compliance with essential organizational

rules and policies

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Controlling as a Management Functiony Controlling

In Other words ,Controlling is nothing but

seeing that everything is being carried out with a plan which has been adopted , the orders which has been given and the principles which has been laid down.

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The Control Process Establish objectives and standards. Measure actual performance. Compare results with objectives and standards. Take necessary action.

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Requirements of effective control. All alert managers want to have adequate and

effective system of controls to assist them in making sure that events conform to plans. The controls used by managers must be designed for

the specific task and person they are intended to serve. While the basic process and the fundamentals of

control are universal, the actual system requires special design.

Some of the ways are.. Tailoring controls to plans and positions. * All control techniques and systems should reflect the plans they are designed to follow. They should be tailored to positions. Eg. Tailoring controls to individual managers. * If they are not of a type that a manager can or will understand , they will not be useful. What individuals cannot understand , they will not trust it. And what they do not trust they will not use.

Continue. Ensuring flexibility of controls.* Controls should remain workable in the face of changed plans, unforeseen circumstances, or outright failures. If controls are to remain effective despite failure or unexpected changes of plans, they must be flexible.

Achieving economy of controls. * Controls must be worth their cost. Although this requirement is simple, it is often difficult to accomplish in practice.

Continue. Fitting the control system to the organizational culture.

* To be most effective, any control system or technique must fit the organizational culture. Establishing controls that lead to corrective action.

* An adequate system will disclose where failures are occurring and is responsible for them, and it will ensure that some corrective action is taken.

Budgetary control techniques Budget is a financial control for the organization. The three most important budgetary tools are the income, balance sheet and cash flow statement.Meaning of Budgetary Control

A budgetary control helps management reduce operating expenses.Importance

A budgetary control is an important tool in business decisionmaking processes. The control helps corporate executives monitor expense indicators and adjust operating performance accordingly.

There are three types of budgetary techniques:

1) Variance AnalysisThe most common budgetary technique is a comparison of the budget to actual results. This is usually done on a monthly basis, with a summary closing process every quarter. Variances (differences between the budget and actual results) are noted and accounted for. A decision can be made to reduce expenses or reallocate resources.

2) Control Centres Creating, budgetary control centres with business groups. There are four types of responsibility centres: revenue, expense, profit, and investment. These are represented primarily by the income and cash flow statement. Both statements have natural relationships that can be monitored over time to maintain a balance to operations.

3) Forecasting The most important budgetary technique is forecasting, or the ability to set out a detailed plan for the future.

Each manager should prepare detailed plans with targets and resource needs.

These needs should be compared with the overall look to ensure alignment with industry standards.

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IT in Controlling The developments in IT greatly Facilitate Organizational Control at

Relatively Low Cost. Communication is needed for carrying out managerial Functions &

for linking Organization with its External environment. Communication & MIS are the Linkage that makes managing

Possible. IT

encompasses Variety of Technologies Software,Telecomm.,Database management Technology(3G & 4G).

in &

Hardware, Wireless

Management Information System(MIS) IT has Promoted the Development of the MIS. An 'MIS' is a planned system of the collection, processing, storage

and dissemination of data in the form of information needed to carry out the management functions. In a way, it is a documented report of the activities that were planned and executed. As more & more data was stored and linked man began to analyze this information into further detail. Today, MIS is use in Decision support systems, resource and people management applications, Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), project management and database retrieval applications.

Opportunities and Challenges Created by IT Resistance to Computer Application ::- Some Managers may feel

uncomfortable to use computers. y Eg :- At kaiser Permanente ,its a Health maintenance Organisation in US where Doctors resisted new information tech. Speech Recognition devices ::- A way to encourage the use of

computers. y Eg :- This device is used at Call Centers of Airlines ,Telephone Companies ,etc. Telecommuting ::- It means a Person can work on his Computer

terminal at home to do his Office Work.

Opportunities and Challenges Created by IT Computer Network ::- It has been developed to link workstations ,

Servers & peripheral Equipments with each other.

INTERNET ::- It is the Largest n/w of Computers , it is a n/w of

networks. y Eg :- It is use for communication purpose which is done through Chat , Email ,Video Conferencing, etc . concern for security also increases. y * For Security purpose - Encryption can be used & y *Also Firewalls can be used as secured n/w Connections and y * Antivirus s/w to protect against viruses and worms.

Information Security ::- With the growing use of Information,

ProductivityDefinitionThe amount of output per unit of input Output = Productivity Input

Productivity ManagementProductivity could be considered as a comprehensive measure of how organizations satisfy the following criteria: Objectives: the degree to which they are achieved. Efficiency: how effectively resource are used to generate useful output. Effectiveness: what is achieved compared with what is possible. Comparability: how productivity performance is recorded over time.

Productivity ProblemsProductivity implies measurement, which, in turn, is an essential step in the control process. Why it occurs? 1. Variable Quality 2. Poor Work flow 3. High Rework and High Rejects 4. Machine and Equipment Downtime 5. Low Discretionary Effort 6. Lack of Clear Performance Expectations 7. Lack of Feedback

Productivity Improvement ProgramKey elements of a Productivity Improvement Program (PIP):

1. Obtain Upper Management Support 2. Create New Organizational Components 3. Plan Systematically 4. Open Communications 5. Involve Employees 6. Measure and Analyze

Productivity Improvement Program External (not controllable) e.g. Economic, Demographic, Social, Manpower Internal (Controllable) e.g. Product, People, Technology, Management

CONTROL OF OVERALL PERFORMANCE Planning and control are increasingly being treated as an

interrelated system. Along with techniques for partial control, control devices

have been developed for measuring the overall performance of an enterprise or an integrated division or project within it - against total goals.

Reasons for control of overall performance Overall planning is applied to enterprise or major

division goals Decentralization of authority Avoid the chaos of semi-independent units Permits measuring an integrated area of managers

total effort, rather than parts of it

Why st c tr l f erf r ce te t e ci l fi

er ll

Many overall controls in business are financial oriented.

Since finance is the binding force of business, financial

controls are certainly an important objective gauge of the success of Plans.

Financial measurements also summarize as a common denominator of the operation of a number of plans. Further, they accurately indicate total expenditure of resources in reaching goals. This is true in all forms of enterprise. Proper accounting is important not only for business but for government as well.

Controls are necessary to check whether the performance conforms to the plans prepared by the organization.

There are two types of controls : Direct Control Preventive Control

DIRECT CONTROL Direct control is carried out once the deviations from

the plans are observed and then steps are taken to rectify them.

It is the procedure that traces the causes of an

unsatisfactory result back to the persons responsible for it and get them to correct their practices.

Questionable assumptions underlying direct control All performance can be measured Personal responsibility exists Time expenditure is warranted Mistakes can be discovered in time Person responsible will take corrective steps

PREVENTIVE CONTROL It is based on the idea that most of the negative

deviations from standards can be overcome by applying the fundamentals of management.

It is the procedure that traces the causes of an

unsatisfactory result back to managers management skill and knowledge.

Assumptions of preventive control Qualified managers make a minimum of errors The management fundamentals can be used to

measure performance Application of management fundamentals can be

evaluated

Advantages of preventive control Greater accuracy is achieved in assigning personal

responsibility.

Preventive control encourages self-control and make

corrective action more effective. caused by direct controls. continuously.

Preventive control may lighten the managerial burden Employees may be motivated to improve themselves