Techniques of controlTechniques of control

Traditional techniqueTraditional technique

INTRODUCTIONINTRODUCTION

1.1. To enable managers effectively control To enable managers effectively control the organizational activities, a large the organizational activities, a large number of controlling techniques are number of controlling techniques are available. available.

2.2. A manager should know these A manager should know these techniques and in which situation it techniques and in which situation it should be applied.should be applied.

3.3. There are two types of techniques of There are two types of techniques of controlling.controlling.

Traditional techniquesTraditional techniques Modern techniqueModern technique

What is traditional technique What is traditional technique ? ?

These techniques of control are being These techniques of control are being used by managers since long time & used by managers since long time & there forethere fore

Known as traditional techniques.Known as traditional techniques.

TRADITIONAL TECHNIQUESTRADITIONAL TECHNIQUES

1.1. Personal observationPersonal observation

2.2. BudgetingBudgeting

3.3. Break-even analysisBreak-even analysis

4.4. Financial statementFinancial statement

5.5. Statistical data & reportStatistical data & report

6.6. Quality controlQuality control

PERSONAL OBSERVATIONPERSONAL OBSERVATION

This is the most traditional method of control.This is the most traditional method of control. It helps managers to collect first hand It helps managers to collect first hand

information.information. It also creates a psychological pressure on It also creates a psychological pressure on

the employees to perform well as they are the employees to perform well as they are aware that they are being observed aware that they are being observed personally on their job.personally on their job.

How ever it is very time consuming , & not How ever it is very time consuming , & not suitable for all kinds of jobs. suitable for all kinds of jobs.

BUDGETINGBUDGETING

MeaningMeaning-- A budget is a statement which reflects future A budget is a statement which reflects future

incomes ,expenditures & profits of the firm.incomes ,expenditures & profits of the firm. Benefit of budgeting-Benefit of budgeting-1.1. Standards of performanceStandards of performance2.2. PlanningPlanning3.3. Predicting the futurePredicting the future4.4. Financial planningFinancial planning

BREAK EVEN ANALYSISBREAK EVEN ANALYSIS

It deals with the study of the relationship It deals with the study of the relationship between costs,volume, & profit.between costs,volume, & profit.

It determines the probable profit and It determines the probable profit and losses at different levels of activity.losses at different levels of activity.

The sales volume at which there is no The sales volume at which there is no profit,no loss is known as breakeven point.profit,no loss is known as breakeven point.

It can be calculated as ,It can be calculated as ,Breakeven point=fixed cost/selling price Breakeven point=fixed cost/selling price

per unit – variable cost per unit.per unit – variable cost per unit.

FINANCIAL STATEMENTFINANCIAL STATEMENT

Financial statements shows financial position of Financial statements shows financial position of a firm over a period of time,generally one year.a firm over a period of time,generally one year.

These are prepared along with last year These are prepared along with last year statements, so that firm can compare its present statements, so that firm can compare its present performance with last year’s performance & performance with last year’s performance & improve its future performance.improve its future performance.

It offers information onIt offers information on , ,1.1. LiquidityLiquidity2.2. Financial strengthFinancial strength3.3. profitability profitability

STATISTICAL DATA & STATISTICAL DATA & REPORTREPORT

Statistical analysis in the form of Statistical analysis in the form of averages,percentages,ratios,..etc.averages,percentages,ratios,..etc.

Data can be used for diagramatic Data can be used for diagramatic representations like histograms, pie chart, representations like histograms, pie chart, bar graphs..etc.bar graphs..etc.

A Report A Report is a statement that represents is a statement that represents data in the form of information for carrying data in the form of information for carrying out the controlling function.out the controlling function.

QUALITY CONTROLQUALITY CONTROL Quality control uses operational techniques Quality control uses operational techniques

and activities to sustain quality of the product and activities to sustain quality of the product or service to satisfy customer needsor service to satisfy customer needs

It is the traditional way to manage qualityIt is the traditional way to manage quality There are three stages during the process There are three stages during the process

when inspection is performed-when inspection is performed-1.1. When raw material is received.When raw material is received.2.2. When raw material goes through the When raw material goes through the

production processproduction process3.3. When products are finished-testing takes place When products are finished-testing takes place

before products are dispatched to customers.before products are dispatched to customers.

Thank you

Sauri prasad patra MBA Department of management studies

pondicherry central university