minore project on
TRANSCRIPT
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MINORE PROJECT ON
CONTROLLING
Submitted in partial fulfillment of the requirement for the
Award of the degree of
Bachelor of Business Administration(BBA)
TO
Guru Gobind Singh Indraprastha University, Delhi
Submitted to: Submitted by:
Ms Punitika Batra Urvashi Vashisht
Enroll. No.:00320501711
BLS INSTITUTE OF TECHNOLOGY AND MANAGEMENT
DELHI-Rohatk Road , NH-10,Jakhoda,Bhadurgarh-
124507
Batch:(2012-2014)
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BLS INSTITUTE OF TECHNOLOGYAND MANAGEMENT
Guru Gobind Singh Indraprastha University, Delhi
CERTIFICATE
This is to certify that the project CONTROLLING is a bonafide work ofUrvashi,
Roll No.:00320501711 who completed the project under my supervision as minor
Project. She has done the project with diligence and sincerity and has put this projet.
Singnature of Student Singnature of Guide.
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ACKNOWLEDGEMENT
I would like to express my sinecer thanks and deep felt gratitude to my mentor Ms Punitika
batra. Whose help and support and encouragement has been instrumental for the completion
of this project.
I am also greatful to my parents for their generous help and support in conducting the
research.
URVASHI
00320501711
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LIST OF TABELS
INTRODUCTION
MANAGEMENT
Management in all business and organizational activities is the act of getting people together
to accomplish desired goals and objectives using available resources efficiently and
effectively.Management comprises planning, organizing, staffing, leading or directing,
and controlling an organization (a group of one or more people or entities) or effort for the
S .No Name of Chapter Page No. Teachers Sign
1 Introduction to Controlling.
2 Objective and Scope.
3 Theories of Controlling.
4
Case study.
Summary.
Bibliography.
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purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation
of human resources, financial resources, technological resources and natural resources.
Since organizations can be viewed as systems, management can also be defined as human
action, including design, to facilitate the production of useful outcomes from a system. This
view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manageothers.
Some definitions of management are:
Organization and coordination of the activities of an enterprise in accordance with certain
policies and in achievement of clearly defined objectives. Management is often included as a
factor of production along with machines, materials and money. According to the
management guru Peter Drucker (19092005), the basic task of a management is
twofold: marketing and innovation.
Directors and managers have the power and responsibility to make decisions to manage an
enterprise when given the authority by the shareholders. As a discipline, management
comprises the interlocking functions of formulating corporate policy and organizing,
planning, controlling, and directing the firm's resources to achieve the policy's objectives.
The size of management can range from one person in a small firm to hundreds or thousands
of managers in multinational companies. In large firms the board of directors formulates the
policy which is implemented by the chief executive officer.
THEORITICAL SCOPE
At first, one views management functionally, such as measuring quantity,adjusting plans,meeting goals.This applies even in situations planning does not take place. From
this perspective, Henri Fayol (18411925)]considers management to consist of six functions:
forecasting, planning, organizing, commanding, coordinating and controlling. He was one of the
most influential contributors to modern concepts of management.
Another way of thinking, Mary Parker Follett (18681933), defined management as "the art
of getting things done through people". She described management as philosophy.
Some people, however, find this definition useful but far too narrow. The phrase
"management is what managers do" occurs widely, suggesting the difficulty of defining
management, the shifting nature of definitions and the connection of managerial practiceswith the existence of a managerial cadre or class.
One habit of thought regards management as equivalent to "business administration" and thus
excludes management in places outside commerce, as for example in charities and in
the public sector. More realistically, however, every organization must manage its work,
people, processes, technology, etc. to maximize effectiveness. Nonetheless, many people
refer to university departments which teach management as "business schools." Some
institutions (such as the Harvard Business School) use that name while others (such as
the Yale School of Management) employ the more inclusive term "management."
BASIC FUNCTIONS
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Management operates through various functions, often classified as planning, organizing,
staffing, leading/directing, controlling/monitoring and motivation.
Planning: Deciding what needs to happen in the future (today, next week, next month, next
year, over the next five years, etc.) and generating plans for action.
Organizing: (Implementation)pattern of relationships among workers, making optimum use
of the resources required to enable the successful carrying out of plans.
Staffing: Job analysis, recruitment and hiring for appropriate jobs.
Leading/directing: Determining what needs to be done in a situation and getting people to
do it.
Controlling/monitoring: Checking progress against plans.
Motivation: Motivation is also a kind of basic function of management, because without
motivation, employees cannot work effectively. If motivation does not take place in an
organization, then employees may not contribute to the other functions (which are usually set
by top-level management).
CONTROLLING FUNCTION OF MANAGEMENT
What is Controlling?
Controlling consist of verifying whether everything occurs in conformities with the plans
adopted, instruction issued and principles established. Controlling ensures that there is
effective and eficient utilisation of organisational utilisation so as to achieve planned goals.
Controlling measuers the deviation of actual performance from the standard performance,discovers the cause of such deviations and help in taking correct actions.
According to Brech, Controlling is the systematic exercise which is called as process of
checking actual performance against the standards of palns with a view to ensure adequate
progress and also recording such exercise is gained as a contributions to possible future
needs.
According to Donnell , Just a navigator continually takes reading to ensure whether he is
relative to a planed action , so should a business manager continually take reading to assure
himself that is enterprise on right course.
Controlling has two basic purpose:
1. It facilitate co-ordination.2. It helps in planning.
Features of Controlling Functions.
Following are the characteristics of controlling function of management.
1. Controlling is the end of function-A function which comes once the performanceare made in conformities with plans.
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2. Controlling is a pervasive function-which means it is performed by managers at alllevel and in all type of concerns.
3. Controlling is forward looking-because effective control is not possible with outpast being controlled. Controlling always look for future so that follow-up can be
made whenever required.
4. Controlling is dynamic process-since controlling requires taking reviewal methods,changes have to be made wherever possible.
5. Controlling is related with planning-Planning and controlling are two inseparablefunction of management .Without planning controlling function is meaningless
exercise and without planning controlling is useless.
OBJECTIVE AND SCOPE OF CONTROLLING
SCOPE
Controlling is very wide in scope as it does not end only by comparing the actual
performance with pllaned performance but it tries to find the reasons and solutions for such
problems also .For example, if the planned output is 1,000 units and actual output is 800
units, then controlling functions will look for reasons of this deviations. If the reason is falty
in machinery or inefficiency of workers then the corrective measures are taken by
inefficiency of workers then they are sent for training so that their efficiency can be
improved.
There are two aspects of controlling function. There are : strategic control and operational
control.
Strategic controlrefers to check how effective the strategies and the plans are becausesometimes there can be deviation in actual performance and planned performance due
to plans and strategies.
The operational aspect refers to focus on managerial and other activites of theorganization .That is to find out whether the mismatch is due to faulty is the actions or
activities. In both the aspects the managers try to find out the reasons for mismatch
and take corrective measures.
IMPORTANCE OF CONTROLLING
1. Helps in achieving organizational goals .When the plans are made in theorganization these are directed towards achievement of organizational goal and the
controlling function ensures that the all activities in the organization take place
according to plan and if there is any deviation, timely action is taken to bring back the
activities on the path of planning. When all the activities are going according to plan
then automatically these will direct towards achievement of organizational goals.
2. Judging the accuracy of standards. Through strategic controlling we can easilyjudge whether the standards or targets set are accurate or not. An accurate control
system revised standards from time to time to match them with environmental
changes.
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3. Making efficient use of Resources. Like traffic signal control guides theorganization and keep it on the right track. Each activities is performed according to
predetermined standard. As a result there is most and effective use of resources.
4. Improving employees motivation .An effective control system communicates thegoals and standards of appraisal for employees to subordinates well in advances.
A good control system also guides employees to come out from there problems. Thisfree communication and care motivate the employees to give better performance.
5. Ensure order and discipline. Control creates an atmosphere of order and disciplinein the organization .Effective controlling systems keep the subordinates under check
and make sure they perform their functions efficiently .Share control can have check
over dishonesty and fraud employees.
6. Facilitate coordination in action. Control helps to maintain equilibrium betweenmeans and ends. Controlling makes sure that proper direction is taken and that various
factors are maintained properly. All the departments are controlled according to
predetermined standards which are well coordinated with one another. Control
provides unity of direction.7. Controlling helps in improving the performance of the employees. Controlling
insists on continuous check on the employees and control helps in creating an
atmosphere of order and discipline. Under controlling function it is made sure that
employees are aware of their duties and reponsibilites very clearly.
8. Controlling helps in minimising the errors. Small errors or small mistakes may notseriously affect the organisation. But if these errors are repeted again and again it will
become a serious matter and can bring disaster for the organisation. An effective
controlling system helps in minimizing the errors by continues monitoring and check
.The managers try to detect the errors on time and take remedial steps to minimise the
effect error.
LIMITATION OF CONTROLLING
1. Difficulty is setting quantitative standards. Control system loses its effectivenesswhen standard of performance cannot be defined in quantitative terms and it is very
dificult to set quantitative standards for human behaviour, efficiency level, job
satisfaction, employees moral etc. In such cases judgment depends upon the
discretion of manager.
2. No control on external factors. An enterprise cannot control the external factorssuch as government policy, technological changes, change in fashion, change in
competitors policy etc.3. Resistance from employees. Employees often resist control as a result effectiveness
of control reduces. Employees feel control reduces or curtails their freedom.
Employees may resist and go against the use of cameras, to observe them minutely.
4. Costly affairs. Control is an expensive process. It involves lot of time and efforts assufficient attention has to be paid to observe the performance of the employees. To
install an expensive control system organisation have to spend a large amount.
Management must benefit the controlling system with the cost involved in installing
them The benefit must be more then the cost involved then only controlling is
effective otherwise it lead to inefficiency.
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RELATIONSHIP BETWEEN PLANNING AND CONTROLLING
The planning and controlling function of management are very closely related. The relation
between both the functions is explained below:-
1.
Meaning. Planning is the basic function of every enterprise as in planning we decidewhat is to be done, how it is to be done, when it is to be done . Planning bridges the
gap between where we are standing today and where we want to reach.
Controlling means keeping a check that everything is in accordance with plan and if
there is any deviation, taking preventive measures to stop that deviation.
The meaning of controlling makes it clear that controlling function is undertaken for
right and timely implementation of plans.
2. Planning and controlling are interdependent and interlinked. Planning andcontrolling functions always co-exist or have to exist together as one function depends
on the other. The controlling function compares actual performance then controlling
manager will not be able to know whether the actual performance is O.K. or not. The
base for comparison or the yardstick to check is given by planning to controlling
function .On other hand, the planning function is also dependent on controlling
function as plans are not made only on papers but these have to be followed and
implemented in the organizations. The controlling function make sure that everyone
follow the plan strictly. Continuous monitoring and check in controlling function
make it possible that everyone follow the plan.
So both the function are interlinked and interdependent as for successful execution of
both the functions planning and controlling must support each other.
3. Planning and controlling both are backward looking as well as forward looking. Controlling is backward looking because like a postmortem of past activities the
manager looks back to previous years performance to find out its deviation fromstandard planning is also backward looking because planning is guided by past
experience and feed back report of controlling function.
Planning is forward looking because plans are prepared for future. It involves looking
in advance and making policy for maximum utilisation of resources in future.
Controlling is also forward looking because controlling does not end only bt
comparing past performance with standard. It involves finding the reasons for
deviations do not occur infuture. So, this statement that planning is forward looking
and controlling is backward looking is only partially correct as planningand
controlling are both forward looking as well as backward looking.
Planning and controlling are two separate fuctions of management, yet they are closely
related. The scope of activities if both are overlapping to each other. Without the basis of
planning, controlling activities becomes baseless and without controlling, planning becomes a
meaningless exercise. In absense of controlling, no purpose can be served by. Therefore,
planning and controlling reinforce each other. According to Billy Goetz, " Relationship
between the two can be summarized in the following points;
Planning proceeds controlling and controlling succeeds planning. Planning and controlling are inseperable functions of management. Activities are put on rails by planning and they are kept at right place through
controlling.
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The process of planning and controlling works on Systems Approach which is asfollows:
Planning Results Corrective Action.
Planning and controlling are integral parts of an organization as both are important forsmooth running of an enterprise.
Planning and controlling reinforce each other. Each drives the other management.In the present dynamic environment which affects the organization, the strong relationship
between the two is very critical and important. In the present day environment, it is quite
likely that planning fails due to some unforeseen events. There controlling comes to the
rescue. Once controlling is done effectively, it give us stimulus to make better plans.
Therfore, planning and controlling are inseperate functions of a business enterprise.
CONTROLLING AS A FUNCTION OF MANAGEMENT
Controlling as a management function involves following steps:
1. Establishment of standards- Standards are the plans or the targets which have to beachieved in the course of business function. They can also be called as the criterions
for judging the performance. Standards generally are classified into two-
2. Measurable or tangible - Those standards which can be measured and expressed arecalled as measurable standards. They can be in form of cost, output, expenditure,
time, profit, etc.
3. Non-measurable or intangible- There are standards which cannot be measuredmonetarily. For example- performance of a manager, deviation of workers, theirattitudes towards a concern. These are called as intangible standards.
Controlling becomes easy through establishment of these standards because
controlling is exercised on the basis of these standards.
4. Measurement of performance- The second major step in controlling is to measurethe performance. Finding out deviations becomes easy through measuring the actual
performance. Performance levels are sometimes easy to measure and sometimes
difficult. Measurement of tangible standards is easy as it can be expressed in units,
cost, money terms, etc. Quantitative measurement becomes difficult when
performance of manager has to be measured. Performance of a manager cannot bemeasured in quantities. It can be measured only by-
I. Attitude of the workers,II. Their morale to work,
III. The development in the attitudes regarding the physical environment, andIV. Their communication with the superiors.
It is also sometimes done through various reports like weekly, monthly, quarterly,
yearly reports.
5. Comparison of actual and standard performance- Comparison of actualperformance with the planned targets is very important. Deviation can be defined asthe gap between actual performance and the planned targets. The manager has to find
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out two things here- extent of deviation and cause of deviation. Extent of deviation
means that the manager has to find out whether the deviation is positive or negative or
whether the actual performance is in conformity with the planned performance. The
managers have to exercise control by exception. He has to find out those deviations
which are critical and important for business. Minor deviations have to be ignored.
Major deviations like replacement of machinery, appointment of workers, quality ofraw material, rate of profits, etc. should be looked upon consciously. Therefore it is
said, If a manager controls everything, he ends up controlling nothing. For
example, if stationery charges increase by a minor 5 to 10%, it can be called as a
minor deviation. On the other hand, if monthly production decreases continuously, it
is called as major deviation.
I. Once the deviation is identified, a manager has to think about various causewhich has led to deviation. The causes can be-
II. Erroneous planning,III. Co-ordination loosens,IV. Implementation of plans is defective, andV. Supervision and communication is ineffective, etc.
6. Taking remedial actions- Once the causes and extent of deviations are known, themanager has to detect those errors and take remedial measures for it. There are two
alternatives here-
I. Taking corrective measures for deviations which have occurred; andII. After taking the corrective measures, if the actual performance is not in
conformity with plans, the manager can revise the targets. It is here the
controlling process comes to an end. Follow up is an important step because it
is only through taking corrective measures, a manager can exercise
controlling.
CONTROLLING PROCESS
1. Setting up of (target) standards. Standards means target on the basis which theactual performance is measured. The standard become basis of comparisons and the
manager inists on following standards. The standards must be achievable, high or very
high standards which can not be achived are of no use. Standard must be setup
keeping in mind the resources of the organisation and as far as possible standards
must be set up in numerical or measurable terms.
For example
Standard saleRs.20 lakh per annum. Standard profit - 4 lakh Reduction in cost by 5%
2. Measuring of performance. After setting up the standards the performance of theemployees is measured by evaluating the actual work done by the employees. When
the performance can be measured numerically then it is very convenient to measure
the performance. While measuring he performance the quantitative as well as
qualitative aspects of performance is kept in mind. Sometimes employees achieve the
quantitative standards by ignoring qualitative standards. That is why while measuring
the performance quality standards are also measured. Certain quality parameters are
fixed to measured the quality standards when number of rejection or sales returnincreases. It indicates low standard of quality.
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3. Compare performance against standards. After measuring the performance themanager compares the actual performance with the planned performance and
standards. If there is match in both then the controlling function ends there only. But
if there is match in both then the controlling function ends there only. But if there is
mismatch or deviation then the manager tries to find out the extent of deviation. If the
deviation is minor then it should be ignored. But if the deviation is more then timelyactions must be taken.
4. Analyzing deviation. All deviations need not be brought to the notice of topmanagement. A range of deviation should be established and only cases beyond this
range should be brought to the knowledge of top level management. They must divide
the deviations.
5. Taking corrective measure. On comparing the actual performance with the plannedperformance, Then next step is to know the reasons for such deviations and trying to
remove deviations in future. The manager takes measures it bring back everything in
the track i.e., according to plan, Taking corrective measures may involve:
a) Let the situation remain same if the deviations are minor.b) Redesign or re-frame the plans or strategies if these are overstated or notmatching with the present day business environment.
FEEDBACK IN CONTROLLING
The controlling function does not end by taking corrective actions as it is a continues
process. After suggesting the corrective measures a feedbackreport is prepared. Feedback
refers to list of reasons for deviations of plans or for inefficiency in overall working of
organization along with reasons the corrective measures are also specified in the feedbackreport and feedback acts as a base to establish the standard for next year and controlling
process again starts from 1st step.
DEVIATION IN CONTROLLING
Deviation refers to difference between actual performance and standard performance.
Positive deviation. When actual performance is better than the plan performance it is called
positive deviation
e.g. plan 100 units.
Actual production =120 units
Deviation =+20 units
Negative deviation. When actual performance is less than the plan performance then it is
called negative deviation.
For example,
Plan =100
Actual production= 80units
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TECHNIQUES OF MANAGERIAL CONTROL
1. Traditional techniquesThese are the techniques which were commonly used by various companies. Although
in present environment these have become outdated but still many companies are
using these: Personal observation. Statistical reports. Break even analysis. Budgetary control.
i. Personal observation. This is most traditional and most popular method ofcontrol. Under this manager observes the subordinates while they are
performing job. With the help of these observations they can easily analyse the
performance of employees. By comparing the performance chart of current
year with previous year the managers can know the progress of theirperformance.
ii. Statistical Reports. Various concepts of stats such as graphical presentation,correlation, average, percentage, ratios, etc.are very useful in analysing the
performance of employees. By converting performance report into statistical
chart or table you can easily point out the progress or deviation of
performance.
iii. Break even Analysis. Brake even analysis is a useful technique to studyrelationship between costs and profit, break even point of on profit no loss.
When we reach break even point, it refers to sales amount at which company
is niether earning profit nor incurring loss. With the help of break even
analysis techniques managers can estimates profits at levels of cost and
revenue.
iv. Budgetary Control. Budget is a ststement of expected results and expectedcost expressed in numerical terms. Budget is a ststement which helps us to
know the future results and to achive the results how much we will have to
spend. There are different types of budget which can be prepared by an
organisation : for example, sales budget, production budget, financial budget,
cash budget etc.
In Budgetary control techniques the estimated results are compared with the
actual results. The variation between these two indicates inefficiency.
Budgetary control provides following benefits to the company :
1) Budgeting focuses on standard of objectives.2) Budget helps subordinates to compare their performance with
budgetary standards and can do self appraisal.
3) Through budgeting managers can allocate resources to departments. Asbudget of one deptt. Depends on other. For example,budget of sales
deptt. Depends upon budget of production deptt. Budget of production
deptt. Depends upon budget of purchase deptt.
4) It helps to use th principal of management by exception by giving moreattention to departments where actual operations and target deviate
from budgetary standards.
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The success of budgetary techniques depends upon the estimated of
standards. As far as possible we should prepare flexible budgets due to
dynamic environment.
MODERN TECHNIQUES OF CONTROL
Now a days the common control techniques preferred by comparies are:
1. Return on Investment (ROI). Return on investment is a useful technique ofcontrolling over-all performance of company. Ti is also known as return on capital
employed. The essence of this approach is that profit is not taken as an absolute figure
but it is considered in relation to capitalinvested. With this methok we can compare
the earning of one company with othe even when they have invested different capital
Because it determines the ratio of earning and not the absolute earning.
Net Income can be taken before or after tax. Total investment includes working
capital,fixed capitaland free reserve. To avoid confusion gross assets can also betaken
in place of total investment. The technique of ROI offers following advantages toanorganization .
It indicates how effectively resources are being used. We can compare the performance of business with previous years
performance by comparing ROI of both the years.
It facilitates balanced use of capital employed. It focuses attention on profits and relates them to capital invested.
2. Ratio Analysis. It refers to evaluation and analysis of financial statements bycalculating some important ratios. The common ratios which help to fraw important
conclusions from the financial statements are:
Liquidity Ratio.This ratio helps to measure the ability of business-men to paythe amount due to various stakeholders. These also help to know the short
term solvency of firms. Common ratios which are calculated under the
category of liquidity ratio are
Solvency ratio. This ratio is calculated to find out the long term solvency offirms. It helps to find the ability of firm to pay back its debt.
Profitability ratio. These ratios are calculated to find out the profit- abilityposition of a businessman. These ratios measures the relationship between
profit or earning and capital employees or sales. Turnover ratios. Turnover ratios are calculated to determine the efficiently
utilization of resources. Higher turnover indicate efficient utilization whereas
lower turnover means inefficient utilization of resources.
3. Responsibility accounting. Under this technique of controlling organization isdivided into various responsibility centers are generally various sections or
departments of an organization and head of the department is considered as
responsibility head as he is responsi-ble for the overall growth and achievement of his
department or center .The comman types of responsibilities centers created in the
organization are:
Cost or expense center. Revenue center.
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Profit center. Investment center.
4. Network techniques (PERT and CPM). The object of network is to help planning ,organizing , and controlling the operation to enable he management in accomplishing
the project economically and efficiently . These techniques deal with time scheduling
and resources allocation for these activities for these activities and aim at effective
execution of projects with-in given time schedule and cost. There are various types of
network techniques but PERT i.e., programmes Evaluation and Review Technique
and CPM i.e., Critical path method are most popular techniques. PERT provides the
framework for treating wide range of project management problems. PERT provides
managers with the information they need in planning and controlling schedules and
cost in development projects.
Under Critical Path Method (CPM) the project is analysed into different operations or
activities and their relationship are determined and shown on the network diagram.
The steps involved in using PERT/CPM are given below:
The project is divided into a number of clearly identified activities. These clearly identified activities are arranged in logical sequence. A network diagram is prepared to show the sequence of activities. Time estimated are prepared for each activity. Generally these time estimates
are prepared : these are optimistic (shortest time) pessimistic (longest time)
and most likely time estimate is prepared.
In CPM cost required to complete the project is also calculated. The longest path is identified as critical path. It represents the sequence of
those activities where no delay can be permitted.
If required the plan can be modified so that there is timely execution andcompletion of project.
PERT and CPM are commonly used in ship-building, aircraft manufacturing and
other construction projects.
5. Management audit. This control techniques helps to measure the efficiency levels ofmanagers. Financial audit has been used by firm from long time but management
audit is a new concept. Although there is no chartered accountancy degree which is
authorized to do management audit. But still many companies are doing management
audit to find out the overall performance of managers. Management audit is a
comprehensive and constructive review of performance of management team of any
organization . Managers perform various function such as planning, organizing,
staffing, directing, and controlling etc. The main purpose of management audit is to
see that these functions are performed efficiently and effectively. The main
advantages of management audit are :
It reviews overall plan and policies of managers. It helps to locate present and future deficiency in the performance on
management function.
It would highlight possible opportunities for the organization. It would determined whether or not organization is working efficiently. It would evaluate the progress made by the enterprise through the introduction
of new techniques and ideas.
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It ensures updating of existing policies and strategies in light of environmentalchanges.
Limitations of Management Audit
i. There is no standard techniques of managerial skill.ii. Management audit is not compulsory by law like financial audit.iii. There is shortage of qualified management auditors.iv. The scope and contents of management vary from firm to firm.
6. Management Information System. It is a control techniques which providesinformation and support for effective managerial decision-making. Right decision can
be taken at right time only when managers receive accurate and timely information.
MIS provides the required information to managers on time and systematically. MIS
provides the required information on time managers can take timely actions if actual
performance is different from standards.
CASE STUDIES
CASE STUDY 1A company M Ltd. Manufactuiring mobile phones bothfor domestic indian market
as well as for export. It had enjoyed a substantial market share and also had a loyal
customer following. But lately it has been experiencing problems because its targets
have not been met with regular to sales and customer satisfaction. Also mobile market
in india has grown tremendously and new player have come with better technology
and pricing. This is causing problems for the company. It is planning to revamp its
controlling system and take other steps necessary to rectify the problems it is facing.
1. Identify the benefits the company will derive from a good control system. Helps in achieving organizational goals .When the plans are made in the
organization these are directed towards achievement of organizational goal
and the controlling function ensures that the all activities in the organization
take place according to plan and if there is any deviation, timely action is
taken to bring back the activities on the path of planning. When all the
activities are going according to plan then automatically these will directtowards achievement of organizational goals.
Judging the accuracy of standards. Through strategic controlling we caneasily judge whether the standards or targets set are accurate or not. An
accurate control system revised standards from time to time to match them
with environmental changes.
Making efficient use of Resources. Like traffic signal control guides theorganization and keep it on the right track. Each activities is performed
according to predetermined standard. As a result there is most and effective
use of resources.
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Improving employees motivation .An effective control systemcommunicates the goals and standards of appraisal for employees to
subordinates well in advances.
A good control system also guides employees to come out from there
problems. This free communication and care motivate the employees to give
better performance.
Ensure order and discipline. Control creates an atmosphere of order anddiscipline in the organization .Effective controlling systems keep the
subordinates under check and make sure they perform their functions
efficiently .Share control can have check over dishonesty and fraud
employees.
Facilitate coordination in action. Control helps to maintain equilibriumbetween means and ends. Controlling makes sure that proper direction is taken
and that various factors are maintained properly. All the departments are
controlled according to predetermined standards which are well coordinated
with one another. Control provides unity of direction. Controlling helps in improving the performance of the employees.
Controlling insists on continuous check on the employees and control helps in
creating an atmosphere of order and discipline. Under controlling function it is
made sure that employees are aware of their duties and reponsibilites very
clearly.
Controlling helps in minimising the errors. Small errors or small mistakesmay not seriously affect the organisation. But if these errors are repeted again
and again it will become a serious matter and can bring disaster for the
organisation. An effective controlling system helps in minimizing the errors
by continues monitoring and check .The managers try to detect the errors ontime and take remedial steps to minimise the effect error.
2. How can the company relate its planning with control in this line of business to ensurethat its plans are actually implemented and target attained.
Company can relates its planning with control in this line of bussiness byfollowing measures by implemented and effective controlling system and
following a controlling process.
3. Give the steps in control process that the company should follow to remove theproblems it is facing. Setting up of (target) standards. Standards means target on the basis which
the actual performance is measured. The standard become basis of
comparisons and the manager inists on following standards. The standards
must be achievable, high or very high standards which can not be achived are
of no use. Standard must be setup keeping in mind the resources of the
organisation and as far as possible standards must be set up in numerical or
measurable terms.
For example Standard saleRs.20 lakh per annum.
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Standard profit - 4 lakh Reduction in cost by 5%
Measuring of performance. After setting up the standards the performanceof the employees is measured by evaluating the actual work done by the
employees. When the performance can be measured numerically then it is
very convenient to measure the performance. While measuring heperformance the quantitative as well as qualitative aspects of performance is
kept in mind. Sometimes employees achieve the quantitative standards by
ignoring qualitative standards. That is why while measuring the performance
quality standards are also measured. Certain quality parameters are fixed to
measured the quality standards when number of rejection or sales return
increases. It indicates low standard of quality.
Compare performance against standards. After measuring the performancethe manager compares the actual performance with the planned performance
and standards. If there is match in both then the controlling function ends
there only. But if there is match in both then the controlling function endsthere only. But if there is mismatch or deviation then the manager tries to find
out the extent of deviation. If the deviation is minor then it should be ignored.
But if the deviation is more then timely actions must be taken.
Analyzing deviation. All deviations need not be brought to the notice of topmanagement. A range of deviation should be established and only cases
beyond this range should be brought to the knowledge of top level
management. They must divide the deviations.
Taking corrective measure. On comparing the actual performance with theplanned performance, Then next step is to know the reasons for such
deviations and trying to remove deviations in future. The manager takesmeasures it bring back everything in the track i.e., according to plan, Taking
corrective measures may involve:
Let the situation remain same if the deviations are minor. Redesign or re-frame the plans or strategies if these are overstated or
not matching with the present day business environment.
4. What techniques of control can the company use ? Company can use following techniques of control.
Returns of investment (ROI)
Responsibility Accounting. Management Audit. Management Information System (MIS)
CASE STUDY 2
It's challenging enough to keep systems secure within a corporate networkimagine having
to secure a network in which you had little to no control over each endpoint. No security
policies. No way to confirm what software was installed, how it was configured, what types
of applications were downloaded, or even determine software patch levels.
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That's the world of Adrian Raymond, network manager at Kelly College in Tavistock,
Devon, UK. Adrian is responsible for keeping the network running safely for the independent
coeducational boarding and day education school. In addition to its full academic curriculum,
Kelly College offers an extensive range of extracurricular activities, as well as clubs and
societies.
As an independent boarding school, our needs are not unlike larger institutions," says
Raymond. His small IT staff supports users and monitors the network from 8:30 AM
through 5:00 PM, but the network users especially the students access that network
24/7. "While we want to encourage students to use our resources and become competent
autonomous IT users, we also need to prevent damage to our systems from either our
resident users or malicious outsiders," he says.
To make things even more challenging, IT students with exceptional grades actually areencouraged by the Information Communication Technology (ICT) teachers to "investigate"
the school's network. "We have no sanctions to prevent students making attempts at hacking.
This tends to keep us alert," he says.
Those network use policies would keep any security manager on his/her toes; yet, the college
knew it still had to find a way to keep those network freedoms in place, while also ensuring
that the integrity of the network was not placed in jeopardy and all students and
administrators could use the school's IT resources safely. That meant bringing a manageable,
flexible, yet adequate level of security to the network, both wireless and wired.
For some time, Kelly College provided F-Secure Internet Security software to all of its
students for their own PCs. However, there was no way for IT to check to see if the software
actually was installed, running properly, and up to date.
To get to the level of protection it needed, Kelly College considered various dedicated
wireless "intrusion prevention" systems, as well as the possibility of network access control
deployment. The wireless-only network security option was dismissed because it did not
provide a complete solution, as all its wired connections still were unprotected. Also, the
hardware-based NAC technologies that were evaluated would have required the school to
replace or reconfigure all of its existing network switches obviously at a substantial cost.
To find a viable fix to its situation, Kelly College turned to a local security solutions provider,
Armana Systems, to help it find the best way to secure its systems. "Kelly College needed a
NAC solution that could meet its security requirements immediately, scale for future demand,
and be easy to install," explains Paul Godden, managing director at Armana Systems.
Kelly College ultimately installed the peer-to-peer-based dynamic NAC technology from
InfoExpress. Dynamic NAC, Raymond explains, could be deployed with no network
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changes, thus a deep level of inspection from an enterprise-class NAC device that is easy to
use and manage.
Dynamic NAC provides all the security the college needs on both its wired and wireless
segments. "The main benefit of Dynamic NAC is how it enforces policies, with softwareenforcers being managed by a central server without manual intervention," says Raymond.
For instance, a new user has to comply to be able to access the Domain, and this compliance
helps to enforce the policy to other machines. In effect, we have enforcing clients attached to
every hardware network device, with no way to avoid them being detected.
One of the capabilities that separate InfoExpress' Dynamic NAC from other more
complicated NAC offerings is its reliance on an organization's existing distributed
network. Dynamic NAC turns qualified, secure PCs into NAC enforcers that can
detect, quarantine, and remedy rogue endpoints and unhealthy PCs, says ArmanaSystems' Godden. At Kelly College, Dynamic NAC checks that the college-supplied
F-Secure Internet Security software is installed, operational, and up to date, and
ensures that no rogue PCs can connect to the college network. Dynamic NAC also can
be used to harvest the F-Secure and Dynamic NAC agents automatically at the end of
the school year. That would provide a considerable cost savings."
With so many of its students encouraged to explore the network, and with no stated
polices against hacking in place, Kelly College faced security challenges few others
would want. And it needed security defenses that work consistently, with littlemanagement. "Dynamic NAC has helped us make certain that no outside visitors can
access the network and that the right applications are running and up to date, all while
academic curiosity on the network could occur without restraint" says Raymond.