Control is the process which ensures management activities so that some targeted element of performance remains within acceptable limits. Management control is one of an evaluating the performance conforms to expected organizational standards and goals. Managerial activities like necessary, applying corrective measure so that the performance.
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Definition
According to Henri Fayol, “Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and principles established.”
G.R. Terry and Franklin, “Controlling is determining what is being accomplished, that is, evaluating the performance and, if necessary, applying corrective measures so that the performance takes place according to plans.”
According to S. P. Robbins, “Control can be defined as the process of monitoring activities to ensure that they’re being accomplished as planned and of correcting any significant deviations.”
Why control is necessary
Importance of control has been necessary of business organization. In order to be successful in an organization, manager needs to make a decision. The importance of control is below:
- Implementation of plan
- Maintenance of discipline
- Distribution of duty and responsibility
- Initiating corrective action
- Determination of deviation
- Co-ordination
- Removing deception and over- expectation
- Helping in executing the responsibility of the executive
- Reduction of wastage
- Development of new plan
- Proper utilization of the executive’s power and time
- Easy decentralization of power
- Improving morale of the employees
Steps in control process
- Determine areas of control
- Measuring performance
- Comparison of actual performance with standard
- Comparison of performance with standard and evaluation
- Detection and evaluation of deviations
- Taking necessary corrective actions
Various steps of developing controlling process
- Preparing an effective plan or setting standards
- Determining periodical target
- Use of proper controlling method
- Development of interim and internal controlling system
- Development of modern costing and accounting method
- Determining complex and important control area
- Quick determination of variance
- Development of future thinking of corrective measures
- Taking proper corrective method
- Application of controlling measures by proper authority
Important technique of controlling
1. Budgetary control techniques
2. Non-budgetary control techniques
- Quantitative data analysis
- Special report analysis
- Break-even point analysis
- Personal observation
- Internal audit
- Analysis of financial statement
- Use of up- to- date information technology
- Economic order quantity
- Return on investment analysis
3. Planning and controlling techniques
- Gantt chart
- Performing evaluating and review technique
Pr-requisites for successful operation of budgetary control
- Specifying the objective of budget
- Determining the proper budget period
- Voluntary support of top executives
- Assessing priority in preparing budgets
- Balancing in planning premises
- Budget prepares in consideration of motivation
- Protection of extra- budget event
- Co-ordination
- Feedback system
- Acquiring flexibility in budgeting
How management information system helps controlling
- Help in measuring performance
- Help in comparing with a plan
- Help in evaluating different
- Help in taking corrective action
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