1. CONTROLLING
Made by:
Archi Garg 098
Shreya Saxena 099
Ripudaman 100
Renu Meena 101
Rakesh 102

2. CONTENTS:
 What is controlling??
 Why is control important??
 Planning and controlling: Parallel Functions…
 Controlling process…
 Tools for controlling organizational performance…
 Contemporary issues in control!!!

8. A four-step process including establishment of objectives and
standards, measuring actual performance, comparing actual
performance against a standard, and taking managerial
action to correct deviations or inadequate standards.

9. 1.Establishment of standards:
3 questions arises:
⇒WHERE
⇒WHAT
⇒WHEN
What are STANDARDS????
TYPES OF STANDARDS:
i) Measurable/ Tangible standards:
Eg. In the form of cost, output, expenditure, time, profit etc.
ii) Non Measurable/ Intangible standards:
Eg. Performance of a manager, deviation of workers, their attitude
towards a concern

10. 2. Measuring actual performance:
2 questions arises:
⇒ How we measure??
⇒ What we measure??
i) HOW WE MEASURE ??
It can be done through various sources:
⇒Personal observation,
⇒ statistical reports,
⇒ oral reports,
⇒ written reports etc..

11. ii) WHAT WE MEASURE??
What people in the organization will attempt to excel at?
⇒ Tangible Standards: measurement is easy
Eg. Budgets
 Costs
 Output
 Sales
⇒ Intangible Standards: measurement through subjective measures
Eg. Employees
 Performance
 Satisfaction
 Measurements must be accurate enough to spot deviations or variances
between what really occurs and what is most desired.
 Without measurement, effective control is not possible.

12. 3. Comparing actual performance
against standards:
The comparison of actual performance with desired
performance establishes the need for action.
3 things need to be find out:
⇒ Range of variation
⇒ Extent of deviation
⇒ Cause of deviation

13. i)
Range of variation :
ii)
Extent of Deviation :
⇒
⇒
Minor Deviations
Major Deviations

14. iii) Cause of Deviation :
⇒ Planning
⇒ Coordination
⇒ Implementation
⇒ Supervision
⇒ Communication

15. 4. Taking managerial actions:
 3 Courses of Action:
⇒ Doing Nothing
⇒ Correcting actual (current) performance
⇒ Revising the standard
i) Doing nothing
Only if deviation is judged to be insignificant.
ii) Correcting actual (current) performance
Immediate corrective action
Basic corrective action
iii) Revising the standard
Examining the standard to ascertain whether or not the standard is
realistic, fair, and achievable:
Upholding
Resetting

18. TOOLS FOR CONTROLLING
ORGANIZATIONAL
PERFORMANCE
TYPES OF CONTROL:
TYPES OF CONTROL:

19. •Budgetary control
•Financial ratio
analysis
•Break even analysis
•Audits
•Report and personal
observations
•PERT & CPM methods
•Human resource
accounting
•Economic value
added(EVA)
•Market value added(MVA)
•Balanced scorecard
•Benchmarking
•Management information
system(MIS)

20. BUDGETARY CONTROL
BUDGET:
A budget is a financially expressed statement of anticipated
results during a designated time period(usually 1 year).
BUDGETARY CONTROL:
It is a system of controlling costs which includes
the preparation of budgets, coordinating the
departmentsand establishing responsibility, comparing the
actual performance with budgeted and acting upon resultsto
achieve maximum profitability.

22. FINANCIAL RATIO ANALYSIS
It examines the relationship between specific figures on the
financial statements and helps explain the significance of those
figures:
LIQUIDITY RATIOS:It measure an organization's ability to
generate cash.
PROFITABILITY RATIOS:It measures an organization‘s
ability to generate profits.
DEBT RATIOS: It measure an organization's ability to pay its
debts.
ACTIVITY RATIOS: It measure an organization's efficiency in
operations and use of assets

23. PERT: PERT stands for Program Evaluation Review Technique. A PERT
chart is a project management tool used to schedule, organize, and
coordinate tasks within a project. A PERT chart presents a graphic
illustration of a project as a network diagram consisting of
numbered nodes (either circles or rectangles) representing events, or
milestones in the project linked by labeled vectors (directional lines)
representing tasks in the project. The direction of the arrows on the lines
indicates the sequence of tasks.
PERT identifies and controls the many separate events in complex projects.

24. CPM: The Critical Path Method (CPM) is one of several related
techniques for doing project planning. CPM is for projects that are
made up of a number of individual "activities." If some of the activities
require other activities to finish before they can start, then the project
becomes a complex web of activities.CPM can help you figure out:
i) how long your complex project will take to complete
ii) which activities are "critical," meaning that they have to be done on
time or else the whole project will take longer

26. HRA: Human Resource Accounting may be defined as the
measurement and reporting of the cost and value of people as
organizational resources. It involves accounting for investment in
people and their replacement costs, as well as accounting for the
economic values of people to an organization.
Other Measures:

Economic Value Added (EVA): How much value is created by what a
company does with its assets, less any capital investments in those
assets: the rate of return earned over and above the cost of capital.

Market Value Added (MVA): The value that the stock market places
on a firm’s past and expected capital investment projects

Balanced Scorecard: A measurement tool that uses goals set by
managers in four areas to measure a company’s performance:
Financial, customer, internal processes, and
people/innovation/growth assets

27. Benchmarking: The search for the best practices among competitors or
non competitors that lead to their superior performance.
Information Controls: Management Information Systems (MIS) : A
system used to provide management with needed information on a
regular basis.

30. Connection between Employees and Customers
Importance of controlling these interactions:

31. Ques > How to control this interaction??
Answer > Service profit chain
The service sequence from employees to customers to profit:
service capability affects service value which impacts on
customer satisfaction that, in turn, leads to customer loyalty in
the form of repeat business (profit).

33. 1.Workplace privacy versus workplace
monitoring
Workplace privacy
 Not to read Personal or Confidential e-mails
 Not to tap telephone
 Not to monitor an employee in dressing room
workplace monitoring
 Employees are hired to work (productivity)
 To avoid risk of hostile workplace environment
 To maintain secrecy of company
 intellectual property protection
2. Employee Theft
The unauthorized taking of company property by employees for their
personal use.

34. 3. Workplace violence
Anger, rage, and violence in the workplace is affecting employee
productivity.
Factors contributing to workplace violence:
4. Corporate Governance
The system used to govern a corporation so that the interests of
the corporate owners are protected.