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Management Function: Controlling

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by

Jed Bentillo

on 30 June 2013

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Transcript of Management Function: Controlling


Controlling may be defined as the managerial activity for ensuring the achievement of an organization’s objectives

"Controlling" Defined
The Control Process
Measuring performance against the established standards
Establishing standards
Comparison of actual performance
Types of Control
Preliminary Control
Post-Action Control
Concurrent Control
1. An effective control system must be suitable for the activity it seeks to regulate and should be the minimum required to achieve the desire results.
Characteristics of an effective
2. The standards employed must be objective and measurable.
3. An effective control system uses the “exception principle” which provides that only exceptional circumstances (especially good or especially bad situations) required the attention of management.
4. It provides only usable control data to the manager concerned.

5. It quickly reports undesirable deviations to give the managers the opportunity to take action in time to prevent them.
6. It must be flexible otherwise it will be unable to maintain control of operations when a plan fails or is suddenly changed.
11. It is an on-going process since the environment, operations, personnel, etc. of an organization are consistently changing.

8. It shows the way to corrective action.

9. It pinpoints where responsibility lies for the various control activities.
control system
"BEFORE"
"DURING"
"AFTER"

7. It must be worth the expense.
10. It reviews standards and objectives periodically.
Control Techniques
Traditional Control Techniques
1. Budgetary Control
2. Break-Even Point Analysis

Specialized Control Techniques
1. Gantt Chart Technique
2. Network Analysis
3. Milestone Scheduling

Controlling Overall Performance
Control Techniques
1. Income Statement
2. Return of Investment (ROI)
3. Key Area Control
4. Audits
a. Internal Audits
b. External Audits
c. Management Audits

The Need for Control
Control Techniques
Traditional Control techniques
Specialized Control techniques
Controlling Overall Performance Control Techniques
1. Budgetary Control
2. Break-Even Point Analysis
1. Gantt Chart Technique
2. Network Analysis
3. Milestone Scheduling
Income Statement
Return of Investment (ROI)
Key Area Control
Audits
Internal Audits
External Audits
Management Audits
Auditing conducted by employees of the organization
(internal)
Auditing conducted not by employees of the organization
(external)
Periodic assessment of managerial performance
conducted by the internal and external audits
is the establishment of
budgets relating the
responsibilities of executives to the
requirements of a policy,
and the continuous
comparison of actual with
budgeted results, either
to secure by individual action the objective of that policy or to provide a basis for revision.
This is a statement
compiled at the conclusion
of an accounting period for the purposes of calculating the net profit or loss from
business operations
Its a useful technique, since it identifies what particular area where
organization went wrong, thereby establishing a basis for
corrective action.
ROI=
PROFIT (Before Tax) x 100%
Total Investment
3 Types of Audits
the Break-even point is the point when income is equal to the total cost
The End
Thank you for listening!
Time
Quantity
Cost
Quality
Profit
It is imperative that the manager institute effective controls in his organization so that he will not be at the mercy of internal and external forces that can disrupt its efficiency.
Correcting
deviation
-Time standards

-Cost standards

-Income standards

-Market share

-Productivity

-Profitability
-Strategic control points:
Income
Expenses
Inventory
Quality of the product
Absenteeism

-Meclzanised measuring devices
Ratio analysis:

1. Receiving the raw data.
2. Accumulation, classification and recording of this information.
3. Periodic evaluation of completed action to date.
4. Reporting the status of accomplishment to higher line authority
Minor corrections or fine tuning may be necessary to improve results or some major efforts( temporary redesign, overtime more staff or equipment) to meet a particular emergency, rush order or project, and unexpected bottlenecks.
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