Control is the last function of management. Success or failure of planning depends on the success or failure of controlling. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc

1. CHAPTER 17
CONTROLLING

2. Introduction
Control is the last function of
management. The controlling function
will be unnecessary to the management
if other functions of management are
performed properly. Planning identifies
the activities and controlling regulates
the activities. Success or failure of
planning depends upon the results of
success or failure of controlling.

3. PLANNING

4. Definition
“Control is any process that guides activity
towards some pre-determined goal. The
essence of the concept is in determining
whether the activity is the achieving desire
results”

5. Areas or scope pf control
Control over the policies of the concern,
organization, the personnel employed in an
organization, capital available to the
concern, capital expenditure, production,
wages and salaries paid to the employed,
the cost of production, public relation,
research and development, tools and
equipment and overall control.

6. Steps in Control process
Establishing Measuring
standards performance
Taking
corrective action
Comparison
of
actual
with standards

7. Requirements of effective control system
Feedback
Objective
Suitability
Prompt reporting
Pointing out exceptions
Flexible
Economy
Indelible
Suggest remedial action
Motivation

8. Techniques of control
Statistical Management Gantt Critical path
control information milestone method
reports system chart
personal
Zero-based
observation
budgeting
Cost accounting and Production
cost control control
Control
Break –even Performance
analysis evaluation
Special control
Managerial
repots
statistics
management Standard return on Responsibility
audit costing Internal Audit
investments Accounting

9. Pert/Cpm
Advantage of pert/cpm
Ensure planning:
identification of favorable factors:
Savings of cost and time:
Taking preventive or corrective
actions:
Attention on critical activities:
Everything at right:

10. Advantage of pert/cpm
Making awareness of responsibilities:
Securing co-operation:
Facilities decision-making:
Improved communication:
Simultaneous performance of works:
Advance control action:
Timely completion of a project:

11. Limitations of pert/cpm
Error in estimation of time and cost
application
Time consuming and expensive

12. Distinction between pert and cpm
PERT CPM
Three times estimation done Three times estimation done
It gives importance to time It gives importance to cost
It is suitable where activity It is suitable where activity
timings are not known timings are well known
It is event oriented It is activity oriented

13. Characteristics or features of control
Controlling process An Essence of
action
Universal Influencing
factor
Forward Control involves
looking management
Dynamic
process

14. Need of control
Judging the accuracy of
standards:
Minimize dishonest behavior:
Better performance:

15. Advantages of control
Adjustments in operation
verification of policy
managerial accountability
Psychological pressure
Maintaining morality
Co-ordination
Efficiency

16. Limitations of control
Absence of perfect standards
Uncontrollable factors
Difficulty in fixing responsibility
Expensive process

17. Types of managerial control
Standardizing control
preserving control
Delegation of authority control
Measurement control
Motivating control

18. Budget & Definition of budget
Budget is derived from the French word
‘Budgette’ which means small leather bag.
Budget is a financial and quantitative
statement.
“Budget is a plan for income or outgo or
both, of money, personal, purchased items,
sales items, or any other entity about which
the manager believes that determining the
future course of action will assist in the
managerial efforts”

19. Budgetary control & Definition
of budgetary control
“The term budgetary control is applied
to a system of management and
according control by which all
operations and output are forecast as
far ahead as possible and the actual
results when known are compared
with the budge t estimates.”

20. Characteristics of budgetary control
The activities the organizations are
presented department-wise or section-wise.
Budgets give the extent of expenditure
though which cost control is achieved.
The co-ordination of various departmental
activates helps to prepare the determined
standards.
Clear-cut and specific requirement of the
organization are expressed in quantitative
terms.

21. Characteristics of budgetary control
Determines the deviations by comparisons
and causes of such deviations.
Recommends and implements the
corrective actions when ever necessary.
The future is planned on the basis of past
experience.
Recording the present performance for
comparing purpose with the pre-determined
standards.

22. Advantages of budgetary control
promotion of
Tool for planning
efficiency
the activities
Better utilization
Thinking in advance of resources
Promoters
balanced
activities
Co-ordination
of efforts
Budgetary
Achievement Criteria of self-
of goals examination Delegation of
Control of authority
expenditure
Encourages Fixation of Ensures proper Solving financial
exchange of responsibility communication difficulties
information

23. Disadvantages, Limitations or
problems of budgetary control
Inaccuracy
personal bias
Non-availability of Co-
operation
Rigidity
Results are not attainable

24. Disadvantages, Limitations or
problems of budgetary control
Consistency
Time Consuming process
Ineffective budgetary control
Discourage the initiative
More paperwork

25. Essentials of Effective budgeting system
Efficient organization
Preparing master budget
Quick reporting
Flexible

26. Essentials of Effective budgeting system
Support of top management
Based on reasonable
assumption
Reward and punishment
Appropriate authority

27. Techniques of control
Statistical Management Gantt Critical path
control information milestone method
reports system chart
personal
Zero-based
observation
budgeting
Cost accounting and Production
cost control control
Control
Break –even Performance
analysis evaluation
Special control
Managerial
repots
statistics
management Standard return on Responsibility
audit costing Internal Audit
investments Accounting

28. Types of budgets
Master Physical property
Sales budget
budget budget
Cash budget Research
and
development
Production budget
budget
Types of Production
Time and budgets overhead
material budget
budget
Production
Selling and cost budget
distribution Balance
cost budget sheet budget Supplies budget

29. Budget can also be classified as
Fixed budget
Flexible budgets

30. Preparation of a budget
Sound forecasting
Developed accounting system
Fixation of responsibility
centers
Formation of budget
committees

31. Preparation of a budget
Clear definition of business
policies
Statistical information
Support of top management
Budget period