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control techniques

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Techniques of controlling
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control techniques

  1. 1. PRESENTATION ON CONTROL TECHNIQUE AND PERFORMANCE Submitted by: Submitted to: Rakesh kumar Mrs. Reena sidana (MBA 1st semester) HOD MBA
  2. 2. INTRODUCTION 1. To enable managers effectively control the organizational activities, a large number of controlling techniques are available. 2. A manager should know these techniques and in which situation it should be applied. 3. There are two types of techniques of controlling.
  3. 3. TWO TECHNIQUES  Traditional techniques  Modern techniques
  4. 4. TRADITIONAL TECHNIQUES 1. Personal observation 2. Budgeting 3. Break-even analysis 4. Financial statement 5. Statistical data & report 6. Setting examples 7. Standard costing 8. Written instructions
  5. 5. PERSONAL OBSERVATION  This is the most traditional method of control.  It helps managers to collect first hand information.  It also creates a psychological pressure on the employees to perform well as they are aware that they are being observed personally on their job.  How ever it is very time consuming , & not suitable for all kinds of jobs.
  6. 6. BUDGETING Meaning-  A budget is a statement which reflects future incomes ,expenditures & profits of the firm.  Benefit of budgeting- 1. Standards of performance 2. Planning 3. Predicting the future 4. Financial planning
  7. 7. BREAK EVEN ANALYSIS  It deals with the study of the relationship between costs, volume, & profit.  It determines the probable profit and losses at different levels of activity.  The sales volume at which there is no profit, no loss is known as breakeven point.  It can be calculated as ,  Breakeven point=fixed cost/selling price per unit – variable cost per unit.
  8. 8. FINANCIAL STATEMENT  Financial statements shows financial position of a firm over a period of time, generally one year.  These are prepared along with last year statements, so that firm can compare its present performance with last year’s performance & improve its future performance.  It offers information on , 1. Liquidity 2. Financial strength 3. profitability
  9. 9. STATISTICAL DATA & REPORT  Statistical analysis in the form of averages,percentages,ratios,..etc.  Data can be used for diagramatic representations like histograms, pie chart, bar graphs..etc.  A Report is a statement that represents data in the form of information for carrying out the controlling function.
  10. 10. SETTING EXAMPLES  It is old saying that “example is better than precepts”  Some managers follow this and put good examples of performance before subordinates and expect the same from them.  Behaviour and actions of subordinates can be controlled through exemplary behaviour of the manager.
  11. 11. STANDARD COSTING  It is a technique of cost control.  Under this technique ,standard costs of materail,labour,overheads etc. are determined.  Actual cost are recorded and compared with the standard costs and variances are found out.  Then measures are taken to prevent variances in future.
  12. 12. WRITTEN INSTRUCTIONS  These instructions are issued time to time to the organization members.  These provide latest information and instructions in the light of changing rules and conditions.  These are supplementary control technique.
  13. 13. MODERN TECHNIQUES 1. Return on investment. 2. Management audit. 3. Management information system (MIS). 4. PERT/CPM.
  14. 14. RETURN ON INVESTMENT  Investment consists of fixed asset and working capital used in business.  Profit on the investment is a reward for risk taking.  If the ROI is high then the financial performance of a business is good and vice-versa.  It also shows the areas where corrective actions are needed.
  15. 15. MANAGEMENT AUDIT  Management Audit is an evaluation of the management as a whole. It critically examines the full management process.  It finds out the efficiency of the management.  Management auditing is conducted by a team of experts.  The data is analyzed and conclusions are drawn about managerial performance and efficiency.
  16. 16. MANAGEMENT INFORMATION SYSTEM  In order to control the organisation properly the management needs accurate information.  Information is collected continuously to identify problems and find out solutions.  They need information about the internal working of the organisation and also about the external environment.  MIS collects data, processes it and provides it to the managers.
  17. 17. PERT/CPM  Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) techniques were developed in USA in the late 50's.  Any programme consists of various activities and sub- activities.  Importance is given to identifying the critical activities.  by controlling the time of the critical activities, the total time and cost of the job are minimized.
  18. 18. THANKS

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