Control Process in Management

Home About Site Preserve Your Article topic Quality Guide get outs disclaimer TOS Contact Us Skip to content 4 main locomote in control process in way 4 main steps in control process in management ar Control as a management function involves the fol haplessing steps 1. Establishing standards Standards are criteria against which results are measurable. They are norms to achieve the goals. Standards are usually measured in terms of output. They can also be measured in non-monetary terms the like loyalty, guest attraction, goodwill etc.Some of the standards are as. a. Time standards The goal will be set on the basis of time lapse in performing a task. b. damage standards These indicate the financial expenditures involved per unit, e. g. material cost per unit, cost per person, etc. c. Income standards These relate to financial rewards received due to a particular activity like sales volume per month, year etc. d. Market share This relates to the share of the companys pr oduct in the market. e. Productivity Productivity can be measured on the basis of units produced per man hour etc. f. ProfitabilityThese goals will be set with the conside ration of cost per unit, market share, etc. 2. Measuring performance step involves comparison between what is accomplished and what was intended to be accomplished. The measurement of actual performance must be in the units similar to those of pre visualized criterion. The unit or the yardstick thus chosen be clear, well-defined and easily identified, and should be uniform and homogenous throughout the measurement process. The performance can be measured by the following steps (a) Strategic control points It is not possible to check everything that is being done.Feature article aboutProduction ManagementSo it is necessary to extract strategic control points for measurement. Some of these points are (i) Income It is a significant control point and must be as much per unit of time as was expected. If the income is significantly off form the expectation then the reasons should be investigated and a corrective action taken. (ii) Expenses Total and operational cost per unit must be computed and must be adhered to. Key expense data must be reviewed levelically. (iii) Inventory Some minimum inventory of both the finished product as well as raw materials must be kept in stock as a buffer.Any change in inventory level would determine whether the production is to be increased or decreased. (iv) Quality of the product Standards of established prime(a) must be maintained especially in food processing, medicine manufacturing, automobiles, etc. The process should be continuously observed for any deviations. (v) Absenteeism Excessive absenteeism of personnel is a serious reflection on the environment and working conditions. Absenteeism in excess of chance expectations must be seriously investigated. (b) Meclzanised measuring devicesThis involves a wide variant of technical instruments used for measure ment of machine operations, product quality for size and ingredients and production processes. These instruments may be mechanical, electronic or chemical in nature. (c) Ratio analysis Ratio analysis is one of the most grand management tools. It describes the relationship of one business variable to another. The following are some of the important ratios i) web sales to working cap The working capital must be utilised adequately. If the inventory turnover is rapid then the same working capital can be used again and again.Hence for putrescible goods, this ratio is high. Any change in ratio will signal a deviation from the norm. ii) Net sales to inventory The greater the turnover of inventory, generally, the higher(prenominal) the profit on investment. iii) Current ratio This is the ratio of current asset (cash, receivables etc. ) to current liabilities, and is used to determine a firms ability to pay the perfectly term debts. iv) Net profits to net sale This ratio measures the s hort-run profitability of a business. v) Net profits to tangible net worth Net worth is the difference between tangible assets (not good will, etc) and total liabilities.This ratio of net worth is used to measure profitability over a bulky period. vi) Net profits to net working capital The net-working capital is the operating capital at hand. This would determine the ability of the business to finance day-to-day operations. vii) accumulation period on credit sales The collection period should be as short as possible. Any deviation from established collection period should be promptly investigated. viii) Inventory to net working capital This ratio is to determine the extent of working capital tied up in inventory.Generally, this ratio should be less than 80 per cent, ix) Total debt to tangible net worth This ratio would determine the financial soundness of the business. This ratio should remain as low as possible. (d) Comparative statistical analysis The operations of one company c an be usefully compared with similar operations of another company or with industry averages. It is a very useful performance measuring device. (e) Personal observation Personal observation both formal and informal can be used in certain situation as a measuring device for performances, specially, the performance of the personnel.The informal observation is generally a day-to-day enactment type. A manager may walk through a store to have a general idea about how people are working. 3. comparison the actual performance with expected performance This is the active principle of the process. The previous two, setting the goals and the measurement format are the preparatory parts of the process. It is the responsibility of the management to compare the actual performance against the standards established. This comparison is less complicate if the measurement units for the standards et and the performance measured are the same and quantified. The comparison becomes more difficult when t hese bring subjective evaluations Ralph C. Davis identifies four phases in the comparison. 1. Receiving the raw data. 2. Accumulation, classification and recording of this information. 3. Periodic evaluation of completed action to date. 4. Reporting the status of accomplishment to higher line authority. At the third phase, deviations if any are noted between standards and performance. If clear cut deviations are there, then management must study the- (i) Causes for deviation ii) effectuate of deviation (iii) Size of deviation (iv) Positive or negative deviation. 4. Correcting Deviations The final element in the process is the taking corrective action. Measuring and comparing performance, espial shortcomings, failures or deviations, from plans will be of no avail if it does point to the needed corrective action. Thus dogmatic to be effective, should involve not only the maculation of lapses but also probe into the failure spots, fixation of responsibility for the failures at the right quarters, recommendation of the best possible teps to correct them. These corrective actions must be applied when the work is in progress. The primary objective should be avoidance of such failures in future. The required corrective action can be firm from the qualified data as per the standards laid out and the performance evaluation already done. This step should be taken promptly, otherwise losses may be cumulative and remedial action will be all the more difficult to take. Corrective action must be well balanced, avoiding over controlling and at the same time letting not things to drift.You May Also Like 3 Elements of an Organisation suggested by Allen 14 principles of management suggested by Fayol ad Free Subscription Top of Form picpic Do you want some more information on this topic? Enter your email id picpic Bottom of Form Do you like this site? If you enjoy reading PreserveArticles. com, please share this site with your friends.? Guidelines About Site Content Q uality Guidelines Terms of Service Privacy insurance policy Disclaimer Copyright Recent Articles spellingerrors Report Spelling and Grammatical Errors Suggestions Suggest Us Testimonials Users Testimonials Preserve Articles is home of thousands of articles published and preserved by users like you. here you can publish your research papers, essays, letters, stories, poetries, biographies, notes, reviews, advises and allied information with a single vision to liberate knowledge. Before preserving your articles on this site, please read the following pages 1. Content Guidelines 2. TOS 3. Privacy Policy 4. Disclaimer 5. Copyright Search Articles Top of Form