CONTROLLING

PRESENTED BY :
ARPAN THUKRAL DEEKSHA RAHEJA KARAN SHARMA NEHA JAIN NIDHI SRIVASTAVA

WHAT IS MANAGEMENT?
Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives 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 purpose of accomplishing a goal.

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Management functions:

Planning Organising Directing Controlling

CONTROLLING
Control in management means setting standards, measuring actual performance and taking corrective action. Thus, control comprises these three main activities viz.: Setting standards Measuring deviations Taking corrective action (If needed)

NEED OF CONTROLLING:
The best of plans can go awry, to prevent it, controlling is necessary. Helps managers monitor environmental changes and their effects on the organization's progress To create better quality To cope with change

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To create faster cycles To add value
To facilitate delegation and teamwork :

PROCESS OF CONTROLLING

The control process involves carefully collecting information about a system, process, person, or group of people in order to make necessary decisions about each. Managers set up control systems that consist of five key steps:

PROCESS OF CONTROLLING
Setting performance standards.

Measurement of actual performance.

Comparing actual performance with standards. Analysing deviations.

Correcting deviations.

TYPES OF CONTROLLING
Control may be grouped according to three general classifications: (1)the nature of the information flow designed into the system (that is, open- or closed-loop control), (2) the kind of components included in the design (that is man or machine control systems), and (3) the relationship of control to the decision process (that is, organizational or operational control).

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Open loop control Info flows in an uncontrolled n atomized manner through d system in a pre-set pattern without any specified goal or purpose.
Closed Loop control Here control is exercised as a result of d operation rather than because of outside or pre-determined arrangements.

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Man control the relationship between objectives and associated characteristics is often vague; the measurement of the characteristic may be extremely subjective; the expected standard is difficult to define; and the amount of new inputs required is impossible to quantify. Must b undertaken when measurement is subjective and judgment is required control of people is complex because the elements of control are difficult to determine

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Machine control characteristic is quantifiable, so precision exists deviations can b exactly determined the correction process begins. The automatic system is highly structured, designed to accept certain kinds of input and produce specific output, and programmed to regulate the transformation of inputs within a narrow range of variation.

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Organizational control The process of organizational control is to review and evaluate the performance of the system against these established norms. General plans are translated into specific performance measures such as share of the market, earnings, return on investment, and budgets the approach used in the program of review and evaluation depends on the reason for the evaluation

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Operational control regulate the day-to-day output relative to schedules, specifications, and costs task of management concerns monitoring the behavior of individuals, comparing performance to some standard, and providing rewards or punishment as indicated.

TECHNIQUES OF CONTROLLING:
Quantitative Financial control Budget control Non-quantitative Marketing controls Human resource control Computer & Informational Control

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Financial control After the planning process, funds are set aside for each activity. As the activities are undertaken, statements are updated and ultimately at the end of financial period, financial statements are made. Financial statements provide management with information to monitor financial resources and activities. Balance sheet shows the worth of the organisation at the given point of time and shows its assets and liabilities among other things.

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Budget control Some prominent budget development techniques are: Top-down budgeting. Managers prepare the budget and send it to subordinates. Bottom-up budgeting. Figures come from the lower levels and are adjusted and coordinated as they move up the hierarchy. Zero-based budgeting. Managers develop each new budget by justifying the projected allocation against its contribution to departmental or organizational goals. Flexible budgeting. Any budget exercise can incorporate flexible budgets, which set meet or beat standards that can be compared to expenditures.

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Marketing control The following are the methods of evaluating the marketing control of an organisation: Market research: gathers data to assess customer needs information critical to an organization's success. It also helps identify competitors. Test marketing: Small scale marketing of the product to know customer acceptance of the product. Marketing statistics: measure performance by compiling data and analyzing result.

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Human Resource control Human resource controls help managers regulate the quality of newly hired personnel, as well as monitor current employees' developments and daily performances. Computer and information control Almost all organizations have confidential and sensitive information that they don't want to become general knowledge. Controlling access to computer databases is the key to this area. Performance limitations Behavioural limitations and health risks

CASE STUDY

DAMAGE CONTROL AT STERLING COURIER

Sterling Courier Systems based in Hendon, Virginia is a provider of same-day-delivery services. Although Sterling may do everything right to meet its delivery commitments, it relies on commercial airlines to transport its parcels and occasionally fails to make its deadlines. Sterling relies on commercial airlines to transport its parcels. Delays are usually a result of packages being misplaced in airlines tracking systems. Such incidents are beyond Sterlings control. But from the customers vantage point, the failure is Sterlings problem.

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To control the damage created by such delays, Sterling had to take some corrective measures. For example, for several months in late 1990 and early 1991 several Sterling deliveries disappeared in transit. The packages turned up later, but the customers had already suffered financial losses. Yet because the packages were eventually recovered, neither insurance nor the airlines was liable. The decision for president Glenn Smoak was whether to compensate the customers for their losses or simply not to charge them for the shipments. Smoak concluded that not charging for the shipment was an

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inadequate response, given the suffered downtime. But paying the $30,000 in losses would push the then-fiveyear-old $5 million company into a loss for the quarter. Smoaks decision was to pay out the $30,000 in gratis service, the customers stayed, and Sterling continues to grow.