6 pom kc controlling
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The ‘Controlling’ Function
Principles of Management
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What is Controlling?
Simply put…
It is the process of monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.
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Why is it needed?
To cope with changes… internally & externally
To facilitate delegation and teamwork To create better quality and add value
This will in turn, lead to: Judge accuracy of the standards that were
set Improve performance Minimize undesirable behaviour
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Understanding the Control Process
Controlling Process
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Understanding the Control Process
Establish standards Quantity / targets, Quality, Monetary and Time-
related
Monitor performance Periodically checking and correcting minor
deviations / problems
Measure actual performance Actual measurement over a pre-decided time period.
Eg: annually, half-yearly.
Take corrective actions Post evaluation of ‘where one stands’, the co. takes
actions to ensure original plans are met.
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So in Essence, Controlling is…
Both anticipatory and retrospective.
The process anticipates problems and takes preventive action.
With corrective action, the process also follows up on problems.
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An Effective Control System Needs to have:
Acceptability by all those who will enforce decisions
Flexibility Accuracy Timeliness Cost effectiveness Balance between objectivity and
subjectivity Coordinated with planning, organizing and
leading
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Controlling Techniques
A variety of tools and techniques are used to help the manager control activities in their areas.
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Types Of Controlling Techniques
Traditional Techniques
Personal observation
Break-Even analysis
Statistical reports
Budgetary control
Modern Techniques
Management Audit
Return on Investment
PERT & CPM
GANTT
Management Information
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Techniques
GANTT
PERT (Programme Evaluation & Review
Technique)
BUDGETING
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What is the GANTT chart?
A Gantt chart is a type of bar chart that illustrates a project schedule.
Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project.
Terminal elements and summary elements comprise the work breakdown structure of the project.
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Illustration
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Programme Evaluation & Review Techniques (PERT)
Definition:
Project management technique that shows the time taken by each component of a project, and the total time required for its completion.
PERT breaks down the project into events and activities, and lays down their proper sequence, relationships, and duration in the form of a network.
PERT is a scheduling tool, and does not help in finding the best or the shortest way to complete a project.
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PERT Diagrams
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PERT Diagrams
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Illustration: simple building project to put an A/C unit in a factory
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Task ID Task Descriptions
Prerequisites Optimistic Duration
Most likely Duration
Pessimistic Duration
Expected Duration
1 Build Internal Components
None 1 2 3 2
2 Modify roof and floor
None 2 3 4 3
3 Construct collection stack
1 1 2 3 2
4 Pour concrete and install frame
2 2 4 6 4
5 Build high temperature burner
3 1 4 7 4
6 Install control system
3 1 2 9 4
7 Install air pollution device
4,5 3 4 11 6
8 Inspection and testing
6,7 1 2 3 2
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Advantages of PERT
Ensures Planning
All managers are involved
Forward-looking - Hence, helps to prevent deviations and take corrective measures quickly
Facilitates in decision-making
Improves communication
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Disadvantages of PERT
Error in estimation of time & cost as no scope for ‘gestimates’
Quite complicated. One needs good knowledge and understanding for right application
Overemphasis on time, less on costs
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Budgeting
Definition:
“Budgeting is a part of management process which includes preparation of budget”.
Budget control, Budget co-ordination activities are related with budget.
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Objectives of Budgeting
Establish Balancing Act.
Maximization of Profits.
Planning.
Forecasting.
Control Expenditure.
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Advantages of Budgeting
Achievement of goals.
Control Expenditure.
Better Utilization Of Resources.
Solving Financial Difficulties.
Co-ordination in Working.
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Limitations of Budgeting
Changing Conditions.
Time Consuming.
Budgets are based on Plan Estimates.
Conflicts among Departments.
Inaccuracy.
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Effective Budgeting
Objectives.
Education.
Communication.
Reward & Punishment.