Planning is looking ahead while ....pdf

CHAPTER – 8 CONTROLLING CONTROLLING

6 MARKS

CONCEPT MAPPING:

Process of Controlling

Ke Conce!ts in n"ts#ell: $% Me&ning of controlling: Comparing actual performance with standards and finding deviations if any and taking corrective action.

 Act"&l Perfor'&nce ( St&n)&r)s ( No )e*i&tion +e&t"res,N&t"re of Controlling: •

Controlling is pervasive

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Controlling is a primary function

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Controlling is a continuous process

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Controlling is a goal oriented function.

-% Process of Controlling: $% Setting !erfor'&nce st&n)&r)s: Standards are the Criteria against which actual performance would be measured. Standards serve as bench marks. They can be set in both quantitative as well as qualitative.

-% Me&s"re'ent of &ct"&l !erfor'&nce: Performance should be measured in an objective and reliable manner.

.% Co'!&ring &ct"&l !erfor'&nce /it# st&n)&r)s:

0% An&l1ing )e*i&tions: Major deviation or minor deviation and analying the causes of deviation.

&2 Critic&l !oint control: !ocus only on "ey #esult $reas %"#$s&. 32 M&n&ge'ent 3 E4ce!tion: Concentrate only on major deviations only. 5% T&ing correcti*e &ction: 'hen deviations go beyond the acceptable range( especially in the important areas( it demands immediate managerial attention so that deviations do not occur again and standards are accomplished.

Conclusion) *n case the deviation cannot be corrected through managerial action( the standards may have to be revised.

IMPORTANCE O+ CONTROLLING

Controlling ens"res or)er &n) )isci!line 3 fi4ing st&n)&r)s in &)*&nce /#ic# le&)s to i'!ro*e) e'!loee 'oti*&tion7 it &lso f&cilit&tes efficient "se of reso"rces7 ")ging t#e &cc"r&c of st&n)&r)s7 f&cilit&tes coor)in&tion in &ction /#ic# /ill res"lt into &cco'!lis#'ent of org&ni1&tion&l go&ls% LIMITATIONS O+ CONTROLLING:

$% 9iffic"lt in setting "&ntit&ti*e st&n)&r)s: *t is difficult to set standards for all types of activities this makes measurement of performance and their comparison with standards a difficult task. -% Little control on e4tern&l f&ctors: +usiness environment is ever changing. The firm has no control on e,ternal factors such as government policies( technological changes( competition etc. .% Resist&nce fro' e'!loees: E'!loees o!!ose controlling 'e&s"res t&en 3 &n org&nis&tion% 0% Costl &ff&ir: It is & costl &ff&ir &s it in*ol*es & lot of e4!en)it"re7 ti'e &n) effort% Es!eci&ll s'&ll org&ni1&tions c&nnot &ffor)%

RELATIONSHIP ;ET
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Planning and controlling are inseparable twins of management. Planning initiates the process of management and controlling completes the process. Plans are the basis of control and without control the best laid plans may go astray.

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Planning is clearly a prerequisite for controlling. *t is utterly foolish to think that controlling could be accomplished without planning.

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Planning is prescriptive and controlling is evaluative

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*t is often said that planning is looking ahead while controlling is looking back. -owever( the statement is only partially correct. Plans are prepared for future and involve looking ahead.

n the contrary( controlling is like a postmortem of past

activities to find out deviations from the standards. *n that sense controlling is a backward looking function. -owever( it should be understood that planning is guided by past e,periences and the corrective action initiated by control function.

="estions >/it# so'e #ints /#ere*er necess&r2 I'!ort&nt "estions &re s#o/n /it# ? '&r &n) t#e Most i'!ort&nt "estions &re s#o/n /it# ?? '&r

?$% Gi*e t#e 'e&ning of Controlling%

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-% 9efine Controlling%

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$ns) *t is a process of taking steps to bring actual results and desired results closer together.

.%% <#ic# f"nction of '&n&ge'ent ens"res t#&t &ct"&l &cti*ities confir' to !l&nne) &cti*ities@ $M $ns) Controlling

0%% N&'e t#e f"nction of '&n&ge'ent /#ic# re*ie/s t#e o!er&tions in & 3"siness "nit% $M $ns) Controlling

5%% <# it is s&i) t#&t !l&nning is 'e&ningless /it#o"t controlling@

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$ns. *n the absence of controlling( actual performance will not be measured and compared. So( how far plans are implemented cannot be known.

6%% <# it is s&i) t#&t controlling is 3lin) /it#o"t !l&nning@

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$ns. 'ithout laid standards actual performance cannot be compared.

??% E4!l&in t#e li'it&tions of Controlling%

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??8% Pl&nning is looing &#e&) /#ere&s controlling is looing 3&c% 9isc"ss%

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B% E4!l&in #o/ controlling #el!s in &c#ie*ing 3etter coDor)in&tion &n) 3etter !l&nning%

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Hint: Refer I'!ort&nce of Controlling% $F% Controlling is & !er*&si*e f"nction% E4!l&in

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$ns) *t is a pervasive function( it is required every level and in any type of organisation.

$$% 9oes control #el! in ")ging t#e &cc"r&c of st&n)&r)s &n) i'!ro*ing 'oti*&tion of t#e e'!loees@ E4!l&in .M Hint: Refer i'!ort&nce of Controlling ??$-% E4!l&in t#e )ifference 3et/een Pl&nning &n) Controlling% Hint: Refer Rel&tions#i! 3et/een Pl&nning &n) Controlling

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$.% Pl&nning &n) Controlling &re '"t"&ll interrel&te) &n) inter)e!en)ent &cti*ities Ho/@ .M Hint: Rel&tions#i! $0% Controlling is for/&r) looing E4!l&in

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$5%% Controlling is looing 3&c% E4!l&in

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?$6% If o" tr to controlling e*ert#ing o" '& en) "! 3 controlling not#ing 9isc"ss .M Hint: M&n&ge'ent 3 e4ce!tion% ?$% Controlling is not & !&n&ce& for e*er !ro3le' in t#e org&nis&tion 9isc"ss .M Hint: Li'it&tions of controlling% ?$8%% <#&t is Critic&l Point Control@

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$ns) *t is neither economical nor easy to keep a check on each and every activity in an organisation. Controlling should focus on key result areas %"#$s& only which are critical to the success of the orgnisation.

$B% Pl&nning is t#e first f"nction &n) control is t#e l&st f"nction of '&n&geri&l !rocess  9isc"ss .M -F% Control 'o*es fro' )o/n/&r) to "!/&r) /#ere&s !l&nning 'o*es fro' to! to 3otto'% 9isc"ss .M -$%% Controlling is & contin"o"s &cti*it in &n org&nis&tion%

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?--%% <#&t &re t#e f&ctors to 3e e!t in 'in) /#ile setting st&n)&r)s@

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$ns) i& Standards should be in measurable terms ii& Standards should be fle,ible to change iii& They may be in qualitative or quantitative iv& They should be stated in clear terms without any ambiguity

??-.% Me&s"re'ent of & co'!&ns !erfor'&nce '& in*ol*e c&lc"l&tion of cert&in r&tios lie gross !rofit r&tion7 net !rofit r&tio7 ret"rn on in*est'ent r&tion etc% I)entif t#e f"nction of '&n&ge'ent in*ol*e) in t#e gi*en st&te'ent &n) e4!l&in t#e rele*&nt ste!% .M -int) Controlling( Step) Measurement of actual performance.

-0% Ho/ )oes controlling #el! in &c#ie*ing o3ecti*es &n) i'!ro*ing e'!loee 'or&le@ .M

-int) #efer importance of Controlling

-5% Controlling is &n in)is!ens&3le f"nction of '&n&ge'ent% 9o o" &gree@ Gi*e fo"r re&sons in s"!!ort of o"r &ns/er% 5M -int) *mportance of Controlling

-6%If !l&nning is )one c&ref"ll &n) &ccor)ingl ot#er f"nctions of '&n&ge'ent &re going in t#e rig#t )irection7 t#en t#ere is nee) of t#e controlling f"nction of '&n&ge'ent% 9o o" &gree /it# t#e st&te'ent@ Gi*e re&sons in s"!!ort of o"r &ns/er% 5M -int) *mportance of Controlling

??-% T#ere is close &n) reci!roc&l rel&tions#i! 3et/een Pl&nning &n) Controlling E4!l&in t#is st&te'ent t#ro"g# &n e4&'!le% 5M -8% T#ere &re t/o '&n&gers of & co'!&n R&#"l &n) Ro#it% R&#"l is s&ing t#&t Pl&nning is looing &#e&) /#ere&s controlling is looing 3&c% On t#e ot#er #&n)7 &ccor)ing to Ro#it !l&nning is looing 3&c /#ere&s &s controlling is looing &#e&)% <#o is correct &n) /#@ 5M -int) +oth are correct.

-B% Control is consi)ere) i'!ort&nt for '&n re&sons% E4!l&in &n fi*e s"c# re&sons% 5M ??.F% A !ro)"ction in c#&nge /&s gi*en & st&n)&r) to tr&in% He /&s &se) to !ro)"ce si'il&r ot#er to tr&ins% <#&t control !rocess /o"l) #e #&*e follo/e)@ 5M Hint: Process of Controlling% ??.$% An i)e&l control tec#ni"e is one t#&t c#ecs e*er 3it of !erfor'&nce Co''ent%

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-int) Management by e,ception.

??.-% S"ggest t#e correcti*e &ctions to 3e t&en for t#e follo/ing c&"ses of )e*i&tion% i2 9efecti*e '&teri&l ii2 9efecti*e '&c#iner iii2 O3solete '&c#iner i*2 9efecti*e Process *2 9efecti*e !#sic&l con)itions of /or  $ns) i& Change the quality specification for the material used.

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ii& #epair the e,isting machine or replace the machine if it cannot be repaired. iii& /ndertake technological up gradation of machinery iv& Modify the e,isting process v& *mprove the physical conditions of work

??..% E4!l&in t#e !rocess of controlling%

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??.0% E4!l&in t#e i'!ort&nce of controlling%

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??.5% E4!l&in t#e rel&tions#i! 3et/een Pl&nning &n) Controlling%

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.6% E4!l&in 3riefl t#e *&rio"s ste!s in*ol*e) in t#e !rocess of controlling%

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.% Co'!&ring t#e &ct"&l !erfor'&nce /it# l&i) st&n)&r)7 fin)ing o"t )e*i&tions &n) t&ing correcti*e &ction is &n i'!ort&nt !rocess of & f"nction of '&n&ge'ent N&'e &n) e4!l&in t#e !rocess of t#&t f"nction% 6M Hint: Process of Controlling ??.8% Control )oes not re"ire &n !rocess Co''ent 

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Hint: T#is st&te'ent is /rong% Controlling #&s & !rocess /#ic# cont&ins fi*e ste!s in & gi*en seri&l or)er% .B% Controlling is & sste'&tic !rocess in*ol*ing & series of ste!s E4!l&in

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?0F% E4!l&in t#e i'!ort&nce of '&n&geri&l f"nction /#ic# !ro*i)es )irection to /or effort in confor'it /it# t#e !l&ns% 6M Hint: I'!ort&nce of Controlling ??0$% In t#e &3sence of of & '&n&geri&l f"nction7 !l&nning goes "nc#ece) N&'e t#e f"nction &n) e4!l&in its i'!ort&nce% 6M $ns. %i&  Acco'!lis#ing org&ni1&tion&l go&ls: The controlling function measures progress towards the organiational goals and brings to light the deviations( if any( and indicates corrective action. %ii& ")ging &cc"r&c of st&n)&r)s: $ good control system enables management to verify whether the standards set are accurate and objective. %iii& M&ing efficient "se of reso"rces:   +y e,ercising control( a manager seeks to reduce wastage and spoilage of resources. 0ach activity is performed in accordance with predetermined standards and norms. %iv& I'!ro*ing e'!loee 'oti*&tion: $ good control system ensures that employees know well in advance what they are e,pected to do and what are the standards of performance on

the basis of which they will be appraised. *t( thus( motivates them and helps them to give better performance. %v& Ens"ring or)er &n) )isci!line: Controlling creates an atmosphere of order and discipline in the organisation. *t helps to minimie dishonest behaviour on the part of the employees by keeping a close check on their activities. %vi& !acilitating  coor)in&tion in &ction: Controlling provides direction to all activities and efforts for achieving organiational goals. ??0.% Pl&nning /it#o"t controlling is 3lin) &n) *iceD*ers&% 9isc"ss% 5M $ns. Planning and controlling are inseparable twins of management. $ system of control presupposes the e,istence of certain standards. These standards of performance which serve as the basis of controlling are provided by planning. nce a plan becomes operational( controlling is necessary to monitor the progress( measure it( discover deviations and initiate corrective measures to ensure that events conform to plans. Planning without controlling is meaningless. Similarly( controlling is blind without planning. *f the standards are not set in advance( managers have nothing to control. 'hen there is no plan( there is no basis of controlling. Planning is clearly a prerequisite for controlling. *t is utterly foolish to think that controlling could be accomplished without planning. 'ithout planning there is no predetermined understanding of the desired performance.

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