These people believe more on self-control rather than externally-imposed control and resist it. Communications 3. Features of the Balanced Scorecard Method: ii. The budget is reviewed by the budget committee or appropriation committee. It is conducted by an internal auditor, who is an employee of the organisation. It brings in focus, the danger signals or potential bottlenecks, but also provides management with timely progress reports. Control system should focus more on this. No organisation can efficiently operate without an inventory. For example, wrong parts are ordered, wrong pricing decisions are made, problems are diagnosed incorrectly, and so on. Calculation of ratios facilitates comparison of firms which differ in size and to compare a particular company’s financial performance with the industry average. Budget making can only be effective when there is a correlation between the cost to be incurred and the benefits to be derived. Setting Up of the Standards of Performance: The first step of control is to set up the bases for evaluating the performances. Control job performance and continuous progress. 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. Employees can express themselves, and as a result, matters arising are address appropriately. 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. Introduction Organization success is inseparable from the managerial practice just like any organized social activity is inseparable from the values, attitudes, abilities and behaviour of the group„s leader. By laying down the norms and procedures for settling workers issues, and resolving industrial disputes it ensures a congenial atmosphere. It should be analysed and brought to the attention of the top-level executives of the organisation. It ensures that all avenues of wastage are plugged and resources, whether human or material, are opti­mally utilised. This integration can be achieved by developing consistency of strategic objectives and performance measures. Controlling also ensures that an organization’s resources are being used effectively and efficiently for the achievement of predetermined goals. To staff means to select, develop, maintain, and utilize personnel in such a way that the organization can achieve its goals effectively and economically. Available 2. Control activities take into consideration the important factors and visualize the actions and resources from time to time. Controlling function is one of the four foundations of management. Following are some important definitions of control: According to George Terry, “Controlling is determining what is being accomplished that is, the performance, evaluating the performance and if necessary, applying corrective measures, so that performance takes place according to plans”. Remedial measures may include change in the existing process of production, change in supervision method, change in selection and recruitment procedure, change in the quality of resources used, change in the working conditions, and so on. Many organizations create separate department or section known as ‘organization and methods’ to keep control over methods and manpower. In an organisation, you can see both management and leadership. But controlling takes place after the planning is completed and the organisational activities have begun. There are four steps in the control process, 8 essential objectives of management techniques mentioned by M. f. Clay, 5 main Tools for controlling the finance of your organisation, Sales Promotion: Definition, Meaning, Techniques, Importance and Advantages, Essay on the Meaning and Definition of Business Management, Controlling in Management # Meaning, Definition, Types, Process, Steps and Techniques. ... profit-maximising strategies, other zoonotic diseases will engender frequent and more severe pandemics, while the inseparable issue of climate change promises horrific events, even extinction. Knoontz and O’Donnell defines, “Control, like planning, is ideally forward looking and the best kind of managerial control corrects deviations from plans before they occur”. Some individuals adjust with control, others resist it. ii. Similarly, marketers must consider the changing relationship between sales revenue and profitability in the allocation of marketing and other resources among the product lines. There may be a variety of factors which influence their work performance, and many of these factors are not controllable by them. Role of Information System 11. The management continually monitors the organisa­tion’s performance with a certain yardstick. 5. Of government company – The comptroller and Auditor-General of India is empowered to direct the manner in which the accounts of a Government Company are to be carried out and if necessary, supplementary or test audit may be taken up. It is a tool for quantitative analysis which involves calculating and scrutinising a series of financial ratios based on financial statements. Resistance, if employees feel that control is not in accordance with their need satisfaction and they have a perception that they can get it changed by their efforts. This technique involves budgets, to plan, to co-ordinate and to control day-to-day operations of business in accordance with the overall objectives, goals and targets of the business organisations. It can be a very effective tool for changing organisational culture, but it depends upon a well-defined strategy, in the absence of which the implementation of the balanced scorecard might be unsuccessful. If any organisation has undertaken more functions, or if the activity of organisation is divided in various functions it is always in the interest of organisation to control every one of them on the basis of certain standards. The committee exercises control through study of market needs. Introduces Dynamism – Controlling keeps managers on the lookout for changes in the firm’s operating environment. A plan is a future course of actions. Efficient routing permits the best utilisation of physical and human resources employed in production. The steps of control are discussed as follows: Step # 1. There is another implication of the people’s perception about control. While such an understanding is not achieved easily, it can be gained through university training, on-the-job experience, coaching by a knowledgeable superior, and constant self-education. Brings Order and Discipline – Controlling seeks to bring order and discipline into the organisation by clearly defining workers behaviour in the work environment. Finally, cultural structures that encourage an individual’s creativity comprise of multicultural interactions, individualistic and collectivist cultural values, and cultural looseness. The organisational performance is reviewed in the light of these policies. Every product moves through a life cycle having five stages- Introduction, Growth, Maturity, Saturation and Decline. Step # 2. For instance an old products in the American market will have a new life cycle when it is introduced in to a new foreign market. Control creates an atmosphere of discipline in the organisation. An organization with strong internal control manages to sustain good results for long periods of time. It has become a conscious need for an effective management control system in our enterprises. However, some special measures are devised to exercise overall control. sales curve and profit curve because, usually, the profit margin assumes declining trend before the sales volume entre that stage. If no corrective action is taken, then the whole process of controlling goes waste. The independent variables used to explain organizational structure were often transferred wholesale into the emerging theory of management accounting to explain the design and use of management accounting systems, with additional variables being added as the years progressed. Management achieves the objectives of the organisation through their limited resources. Trust 7. The mea­surements should be done at fixed intervals. When the resource involved is material, the inventory is called as ‘stock’. This results in high performance and maximum productivity. Developed and also the developing countries are well aware of the importance and need for control in management system. The tools and techniques applied are the same. Accounting department provides information for setting standard costs, calculating actual costs, and pointing out differences between these two. It refers to the task of ensuring that activities are producing the desired results. Second, the measures should relate to the managerial domain of each of the managers as each of them is responsible to exercise control in his own domain. ii. One complements the other. Since control results are used as basis for the progression of individuals’ career in the organization, they resist it to safeguard their career. Naturally, this may be more serious for those who are being controlled. (2) Quick Reporting or Feedback on Performance: Time is an important element in enforcing a control system. 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. iii. The technique of production analyses factors affecting production, work programme and actual performance. Let us have a look at the direct control. Characteristics of Controlling in Management 3. along with problems of replacing old methods of production by new methods, problems of introduction of new technology etc. A control system is a multi-step procedure applied to various types of control activities. All the articles you read in this site are contributed by users like you, with a single vision to liberate knowledge. 10. First of all, organizations set their goals. It is quite natural that the superior has control over his subordinates. Budgetary system of control is an effective system of management control. (adsbygoogle=window.adsbygoogle||[]).push({}); Our mission is to show you that everything in the world exists for a reason. A current ratio of 2:1 is generally accepted. The major causes of resistance to control are as follows: The basic notion of the term control is to curb freedom as it tries to regulate behaviour and performance in a specified way. According to the purpose, the budget serves, it is classified under the following heads: i. Budgeting provides a clear understanding of what an individual is trying to achieve. It can do so only when it has enough flexibility to be adjusted and adapted to suit the needs of the situation on hand. 6. CPM is based on the assumption that the expected time is actually the time taken to complete the project. They are inseparable from each other. 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