Management Control is the process of ensuring that actual activities conform to planned activities.

In other words we can say it is the process oriented to verify: 1) The advancement status of the planned objectives, and 2) The efficacy and efficiency of the organization through the analysis of the resources, costs and proceeds.

 1) 2) 3) 4) 5) 6)

The process of controlling helps in : Making plans effective. Making sure that organizational activities are consistent. Making organizations effective. Making organizations efficient. Providing feedback on project status. Aiding decision making.

Therefore controlling can be viewed as monitoring performance against a plan and then making adjustments either in the plan or in operations as required.

FEEDFORWARD CONTROLS: Also called preliminary or preventive controls. These attempt to identify and prevent deviations in the standards before they occur. Feedforward controls focus on human, material, and financial resources within the organization. CONCURRENT CONTROLS Concurrent control monitor ongoing employee activity to ensure consistency with quality standards. These controls rely on performance standards, rules, and regulations for guiding employee tasks and behaviors.

Their purpose is to ensure that work activities produce the desired results. o FEEDBACK CONTROLS These involve reviewing information to determine whether performance meets established standards.

INPUT

PROCESSES

OUTPUT

Establish Standards

Measure Performance

Does Perform ance Match?

Take Corrective Action

Do Nothing

 Standards are criteria against which results are

measured. They are norms to achieve the goals. Standards are usually measured in terms of output. They can also be measured in non-monetary terms like loyalty, customer attraction, goodwill etc. Some of the standards are as follows:
Time standards Cost standards Income standards Market share Productivity

a). b). c). d). e).

Measurement involves comparison between what is accomplished and what was intended to be accomplished. The measurement of actual performance must be in the units similar to those of predetermined criterion. The unit thus chosen be clear, well-defined and easily identified, and should be uniform and homogenous throughout the measurement process. Measurement of performance against standards should ideally be done on a forward looking basis so that deviations may be detected in advance of the occurrence and avoided by appropriate actions.

Deviation is the gap between actual performance and the planned targets. There are two important points here :

1) Extent of deviation : means whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. 2) Cause of Deviation :

Erroneous Planning Coordination loosens Defective implementation of plans Ineffective supervision and communication etc.

 Controlling to be effective, should involve not only the detection of lapses but also probe into the failure spots, fixation of responsibility for the failures at the right quarters, recommendation of the best possible steps to correct them.

The primary objective should be avoidance of such failures in future.

The required corrective action can be determined from the qualified data as per the standards laid out and the performance evaluation already done. Corrective action must be well balanced, avoiding over controlling and at the same time letting not things to drift.

TO CREATE BETTER QUALITY

TO COPE WITH CHANGE

TO CREATE FASTER CYCLES

TO ADD VALUE

TO FACILITATE DELEGATI ON AND TEAMWOR K

Identifying key performance areas

Identifying strategic control points

selecting strategic control points

Key Performance Areas

Or
Key Result Areas

These areas involve major organizational activities that must function effectively for entire organization to succeed. In todays organization many KRAs are cross functional.

Strategic control points

These are critical points in the system where monitoring or information collection should occur.

Methods of selecting strategic control points

Focus on the most significant elements in a given operation. Focus on places where changes occurs in a productive process.

Controlling has two basic purposes: 1) It facilitates co-ordination. 2) It helps in planning. Controlling is an end function.

It is a pervasive function.
It facilitates coping with the environment.

Control is people-oriented.

Controlling is a forward looking process.

It is a dynamic and continuous process. It is a corrective action. Controlling is an exercise at all levels in the management hierarchy.

It guides behavior of the people and use of resources and facilities for carrying out different activities or operations.

Managers use a series of control methods and systems to deal with the differing problems and elements of their organizations. These methods are capable of taking many forms and can be intended for various groups. Control techniques provide managers with the type and amount of information they need to measure and monitor performance. The information from various controls must be tailored to a specific management level, department, unit, or operation.

a) b) c)

These have a special prominence as money is easy to measure and tally. Financial statements are used to track the monetary value of goods and services into and out of the organization. They help monitor 3 major financial conditions of an organization: LIQUIDITY GENERAL FINANCIAL CONDITION PROFITABILITY Financial statements could be prepared yearly, quarterly or monthly. They include income statements, balance sheets, and cash flow statements.

Balance Sheet: This tells how the organization stacks up financially at a particular point in time. It is the description of the organization in terms of its assets, liabilities and net worth. Income Statement: This summarizes the companys financial performance over a given interval of time. Cash Flow Statements: This also known as Statement of Sources and Uses of Funds. These show where have cash or funds come from during the year, and where have they been applied.

Budgets are formal quantitative statements of the resources set aside for carrying out planned activities over given periods of time. Thus they are widely used means for planning and controlling activities. They establish clear and unambiguous standards of performance for a set time period. At stated time intervals actual performance is compared directly with the budget and thus deviations can easily and quickly detected and acted upon. Budgetary controls are used in various responsibility centers, which is any organizational function or unit headed by a manager who is responsible for the activities of that unit.

All responsibility centers use resources i.e. inputs or costs, to produce outputs or revenues.

REVENUE CENTERS

EXPENSE CENTERS

PROFIT CENTERS

INVESTM -ENT CENTERS

The decision usually depends on the activity performed by the organizational unit and on the manner in which inputs and outputs are measured by the control system.

It is used for validating the honesty and fairness of financial statements, providing a critical basis for management decisions, etc.,. Two types of auditing are used. External Auditing : A verification process involving the independent appraisal of the organizations financial accounts and statements. Assets and liabilities are verified and financial reports are checked for completeness and accuracy. Internal Auditing : It is carried out by the members of the organization only. This provides a reasonable assurance that the assets are being properly safeguarded and all records are being kept reliably.

1)

2)

Marketing controls help monitor progress towards the goals for customer satisfaction with products and services, prices, and delivery. 1) Market research: gathering data to assess customer needs which is an information critical to an organization's success. 2) Test marketing: a small-scale product marketing to assess customer acceptance. It makes use of surveys and focus groups. 3) Marketing statistics: measure performance by compiling data and analyzing results. It makes use of marketing ratios, which measure profitability and market shares, as well as sales quotas, which measure progress towards sales goals and assist with inventory controls.

It means to measure the cost and value of the people (i.e. of employees , managers, etc.,) in the organization. It helps managers regulate the quality of newly hired personnel, as well as monitor current employees' developments and daily performances. Managers can help control workers' behavior in the organization by directing workers' performances towards well defined goals by making sure that the goals are clearly set and understood. Common control types include performance appraisals, disciplinary programs, observations, and training and development assessments.

It is the way the organization transforms inputs labor, money, etc.,- into outputs goods or services. It refers to the complex set of management activities involved in planning, organizing, leading, and controlling an organizations operations.
EXTERNAL ENVIRONMENT

INPUT (Resources) HUMAN CAPITAL LAND TECHNOLOGY

TRANSFORMATION OR CONVERSION PROCESS

OUTPUT GOODS SERVICES OTHERS

FEEDBACK

The feedback loop represents the information gained by people at an organization during the entire process. This information makes it possible for them to monitor the systems performance and decide whether corrective changes are needed. Thus it can be said that operations management is important for it can help improve productivity and also help organizations meet customers competitive priorities.

A PERT chart is a graphic representation of a projects schedule, showing the sequence of tasks, which tasks can be performed simultaneously. The chart can be constructed with a variety of attributes, such as earliest and latest start dates for each task, earliest and latest finish dates for each task, and slack time between tasks. The chart allows a team to avoid unrealistic timetables and schedule expectations, to help identify and shorten tasks that are bottlenecks, and to focus attention on most critical tasks.

D 2

D 1

D 5

D6

D 3

D 4

The Critical Path Method or Critical Path Analysis, is a mathematically based algorithm for scheduling a set of project activities. It is an important tool for effective project management commonly used with all forms of projects, including construction, software development, research projects, product development, engineering, and plant maintenance. Any project with interdependent activities can apply this method of scheduling.

Only with accurate and timely information can a manager monitor progress towards their goal and turn plans into reality. Information system enables managers to control how they do business. The computer plays a vital part in the control of business operation. Information it self as a valuable asset one that needs to be carefully managed and protected.

Information quality

Information timeliness

Information quantity

Information relevance

*EDP: electronic data- processing - computerized data- processing and information management , including report standardization for operating manager. *CBIS: computer based information systems information system that goes beyond the mere standardization of data to aid in the planning process.. *DSS: decision support system - computer support system, computer system accessible to nonspecialists to assist in planning and decision
.

Operational control : an MIS for operational control must provide highly accurate and detail information on a daily or weekly basis. The MIS must provide a high volume of timely and detailed information derived from daily operation. Middle management : the type of information middle level managers require consist of aggregate data from within the organization as well as from resources outside the organization . Top management : the MIS must provide information for strategic planning and management control. For strategic planning, the external sources of information on economic conditions, technological developments, the actions of competitors assume paramount importance.

Planning and controlling are two separate functions of management, yet closely related. Without planning, controlling activities becomes baseless and without controlling, planning becomes a meaningless exercise. In the absence of controlling, no purpose can be served by. Thus it is rightly said Planning precedes controlling and controlling succeeds planning. Activities are put on rails by planning and they are kept at right place through controlling. They work on Systems Approach which is as follows Planning Results Corrective Action

CONTEMPORARY ISSUES IN CONTROL

Cross Cultural Differences
Workplace Concerns 1)Workplace privacy versus workplace monitoring. 2)Employee theft. 3)Workplace violence.

Customer Interactions
Corporate Governance