Summary
Summary class 12 Cbse business studies chapter''controlling''and'' financial managment''
- Module
- Institution
class 12 Cbse business studies chapter''controlling''and'' financial managment'' YOU GUYS WILL LOVE IT
[Show more]
Seller
Follow
delll
Content preview
CONTROLLINGControlling is the process of monitering performance and taking action
to ensure desired result.
Control is a basic managerial function which implies measurement &
correction of performance of subordinates to ensure that the
pre-determined objectives are accomplished.
Controlling is continuous and never ending process & it is related to
future because past cannot be controlled.
Every manager has to exercise control.
The control system has to be adopted to the changing condition and
requirement of the organization.
Steps in the process of control
1. Establishment of Standards.
2. Measurement of Performance.
3. Comparing Performance with Standards.
4. Analyzing the Causes of Deviation.
5. Taking Corrective Action
The basic control process involves the following steps –
1. Establishment of standards : The process of controlling
commences with the determination of standards of performance of all
the departments & employees of the organisation.
Standards can be broadly classified as being tangible and intangible
So far as possible standard must be set and expressed in tangible
terms- output, profit etc.
Standard can also be set for many intangible items like the results to
be expected from a training programme , and advertisement Campaign
or employee morale .
Standard may be in physical terms or in monetary terms.
Setting standard is an integral part of the planning process. Standard
should be flexible .
,The standards must be revised from time to time keeping in mind the
changes in business environment.
2. Measurement of performance
After setting up of standards, the performance of the employees is
measured by evaluating the actual work done by the employees.
There must be a regular & systematic arrangement for measurement
of performance.
It can be done using several techniques like personal observation,
sample checking, etc .
Actual performance must be measured in the same units in which
standards are fixed.
Generally ,performance is measured after the task.
Performance measured casually and unsystematically would not help
much in making good comparison.
3. Comparing performance with standards
After measuring the performance the manager compares the actual
performance with the planned performance.
Such comparison will reveal the deviation between the planned and
actual performance.
If there is any deviation then the manager tries to find out the extent
of deviation.
If the deviation is minor then it should be ignored. But if the deviation
is more then timely action must be taken.
4. Analyzing the causes of deviation
The causes of deviation from standards might be due to –
(a) External Environmental factors – Change in price or Govt. policies
(b) Internal Environmental factors -- Outdated or substandard
techniques etc.
(c) Organisational defects -- lack of definition of jobs, improper span
of management , imbalance between authority & responsibility.
(d) Staffing defects -- faulty selection , inappropriate placement,
lack of training programme etc.
5. Taking Corrective Action
The final step in the controlling process is undertaking corrective
action to bring performance back on the planned track.
Generally managers take measures to improve the performance by --
a) Betterment of internal environment– ensuring adequacy of
production, procuring superior technology.
, (b) Improvement in planning -- expressing objectives clearly, making
a better choice among alternative course of action.
(c) Organisational restructuring -- re-planning span of management,
better balance between authority and responsibility .
(d) Overcoming Staffing defects – through better selection , careful
placement , organisational training programme .
Thus manager must take the corrective measures ,only by finding
the root cause of the deviation.
Nautre of Controlling
The nature or characteristics of controlling can easily be understood
from the following facts :
(a) Controlling is basic function of management - Controlling is the
most important function . The effectiveness of other function of
management largely depends upon the effectiveness of controlling.
(b) Controlling is a pervasive function – controlling is performed by
managers at all levels and in all type of concerns.
(c) Controlling is a continuous Activity – control does not mean any
activity which is performed only once , rather it is needed at all the
times. Under controlling the progress has to be assessed continuously.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller delll. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £2.36. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
80189 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now