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SUBMITTEDTO
Ms. JYOTI JAIN
SUBMITTED BY
ASHISH KUMAR TAMRAKAR
CONCEPT
OF
CONTROL
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CONCEPT AND PROCESS OF CONTROL
Control is the process of comparing actual
performance with standards , identifying andanalyzing deviations
and taking corrective
action to meet the standards in the subsequentperiod.
STEPS:
1. Establishment of performance standards
2. Measurement of performance against standards3. Identification
of deviations
4. Corrective action
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Performanceresults
Deviations
Standards
Correctiveaction
Performancestandards
ObjectivesProgramStrategiesPoliciesMethodsProcedures
Budget
The process of control
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Establishment of PerformanceStandards
Standards provide yardsticks for the measurement ofperformance.
These standards are provided by objectives,plans, strategies,
policies and budget. Standards are of twotypes :
1) Tangible or objective
2)Intangible or subjective
Some important principles for establishing standards are :
i ) Standards should be set for all employees.
ii) Standards should be set for strategic activities.iii)
Standards should be related to the nature ofresponsibility
centres.
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Measurement of Performance
Against Standards
Performance should be measured against thecriteria laid down in
standards. Techniques suchas sampling , personal observation and
informaldiscussion, predictive measures, reports andsummaries and
prior approval are used for thispurpose.
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Identification of Deviations andAnalysis of Causes
Since all deviations do not warrant attention,principal of
exception should be used to focuson deviations which fall outside
the zone
of indifference.
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Corrective Action
Corrective action may involve changes in
operations, or important area such asobjectives, strategies,
policies, plans andbudgets.
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Types of Control
Operational Controls
Managerial Controls
Financial Controls Predictive Controls
Concurrent Controls
Historical Controls
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Operational Controls
Operation control relate to functionalperformance in various
areas includingproduction, marketing, finance and
accounting. These controls focus on shortrange, continuous,
day-to-daymeasurements of operating performanceof various kinds of
activities so as to
enable immediate real time adjustment inoperations as deviations
occur.
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Managerial Controls
Managerial controls relate tomeasurement of performance
ofvarious responsibility centers. they
involve measurement evaluation andadjustments of the performance
ofvarious managers who are in charge ofthere respective units or
sub units,treating these managers asresponsibility centers.
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Financial Controls
Financial controls are very wide incoverage as the performance
of allactivities involves expenditure of
resources and costs. It is difficult tomeasure the output of all
the areas ofmanagerial functions, but their costscan always be
measured.
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Predictive Controls
Predictive controls are aimed atanticipating and identifying
deviationbefore they actually occur. As suchthey are anticipatory
and preventivein nature.
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Concurrent Controls
Concurrent controls are aimed atmeasuring performance and
deviationsas they occur .These controls are
applied simultaneously as operationstake place so that
corrective actionmay be taken before deviationsbecome aggravated
and cumulative,and affect the future operationsadversely.
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Historical Controls
Historical controls are of post mortemnature, and act as means
for futureplanning, rewarding ,training and other
managerial actions in the upcomingperiod. Managerial controls
discussedearlier are in the nature of historicalcontrols. Balance
sheet, P&L A/c, cost of
production, man hour work etc. areexamples of these controls
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Principals of
Controlling Based on objectives and plans.
Understandable.
Flexible. Economical.
Established at strategic points.
Timely.
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Principals of
Controlling Objective.
Adjusted for individual differences.
Related to position. Related to organizational design.
Aimed at corrective action.
Reviewed periodically.
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