CONTROLLING

DEFINITION KOONZ AND ODONNELL Control is measurement and correction of the performance of activities of subordinates in order to make sure those enterprise objectives and plans devised to attain them are being accomplished. ERNEST DALE Control is a system, which not only provides a historical record of what has happened to the business as a Click to edit Master the reasons whole, but also pinpoints subtitle style why it has happened and provides the data that enable the chief executive or the departmental head to take corrective steps if he is on the wrong track.

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Limitations
1.

Control cannot be exercised over external factors.

2.

Employees may resist intensive control measures.

3.

Control may not function on untrained and unqualified employees.

4.

Control may be resisted as it interferes with individual freedom, thinking and 7/9/12

ELEMENTS OF CONTROL
1. 2. 3. 4. 5. 6.

AUTHORITY KNOWLEDGE GUIDANCE DIRECTION CONSTRAINT RESTRAINT

All elements above are necessary for 7/9/12 effective control.

1. 2. 3. 4. 5. 6. 7. 8. 9.

Suitability

ESSENTIALS OF GOOD CONTROLM SYSTEM

Prompt reporting Forward-looking Focus on strategic points Flexible Objective Economical Understandable Remedial action 7/9/12

FUNCTIONS OF A CONTROLLER
1. 2.

Establish, coordinate and administer Compare actual performance with original standards Consult all dept.s and mgt. segments reg. objectives. Administer policies and objectives. Coordinate and supervise preparation of reports to govt. agencies. Fiscal protection to assets and properties. Continuously apprise of economic and 7/9/12 social forces.

3.

4. 5.

6. 7.

TECHNIQUES OF CONTROL
1.

BUDGETARY CONTROLS

2.

NON-BUDGETARY CONTROLS

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1. 2. 3.

Brings efficiency and economy

BUDGETARY CONTROL BENEFITS

Determination of periodical objectives. Precision, discipline and direction to routine activities of enterprise. Coordinates and integrates the operations of different dept.s Standards against actual performance can be measured. Motivates subordinates. Democratic or participative 7/9/12

4.

5.

6. 7.

Limitations
1.

Spending entire Budget amount may be a problem. Budgets may create rigid financial structure and managers may have very little choice over funds. Budgets may be used to judge results of a manager. They may become expensive, meaningless and cumbersome. Danger of over-budgeting. 7/9/12

2.

3.

4.

5.

NON-BUDGETARY CONTROL
1. 2. 3. 4. 5. 6. 7. 8.

Statistical Data and Charts Internal Audit Special Reports Confidential Reports Break-Even Analysis Information Control Personal Observation Network Analysis CPM & PERT
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Characteristics of Effective Control System

1. 2. 3. 4. 5. 6. 7.

Accurate Timely

Objective and Comprehensible Focused on Strategic Control Points Economically realistic Organizationally realistic Coordinated with the organisations work flow Flexible
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8.

MANAGEMENT INFORMATION SYSTEM (MIS)

1.

TIMELINESS ACCURACY RELEVANCE

2.

3.

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