CONTROL TECHNIQUE AND PERFORMANCE

INTRODUCTION
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To enable managers effectively control the

organizational activities, a large number of
controlling techniques are available.
A manager should know these techniques and in
which situation it should be applied.
There are two types of techniques of controlling.

TWO TECHNIQUES
Traditional techniques
Modern techniques

TRADITIONAL TECHNIQUES
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Personal observation
Budgeting
Break-even analysis
Financial statement
Statistical data & report
Setting examples
Written instructions

PERSONAL OBSERVATION
This is the most traditional method of control.
It helps managers to collect first hand information.
It also creates a psychological pressure on the

employees to perform well as they are aware that they

are being observed personally on their job.
How ever it is very time consuming , & not suitable for
all kinds of jobs.

BUDGETING

Meaning-

A budget is a statement
which reflects future
incomes ,expenditures &
profits of the firm.

Benefit of budgeting-

Standards of
performance
2. Planning
3. Predicting the future
4. Financial planning
1.

BREAK EVEN ANALYSIS

It deals with the study of the relationship between

costs, volume, & profit.

It determines the probable profit and losses at
different levels of activity.
The sales volume at which there is no profit, no loss is
known as breakeven point.
It can be calculated as ,

FINANCIAL STATEMENT

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Financial statements shows financial position of

a firm over a period of time, generally one year.
These are prepared along with last year
statements, so that firm can compare its present
performance with last years performance &
improve its future performance.
It offers information on ,
Liquidity
Financial strength
profitability

STATISTICAL DATA & REPORT

Statistical analysis in the form of

averages,percentages,ratios,..etc.
Data can be used for diagrammatic representations
like histograms, pie chart, bar graphs..etc.

A Report is a statement that represents data in the

form of information for carrying out the controlling
function.

SETTING EXAMPLES
It is old saying that example is better than precepts
Some managers follow this and put good examples of

performance before subordinates and expect the same

from them.
Behaviour and actions of subordinates can be
controlled through exemplary behaviour of the
manager.

WRITTEN INSTRUCTIONS
These instructions are issued time to time to the

organization members.
These provide latest information and instructions in
the light of changing rules and conditions.
These are supplementary control technique.

MODERN TECHNIQUES
Return on investment.
2. Management audit.
3. Management information system (MIS).
4. PERT/CPM.
1.

RETURN ON INVESTMENT
Investment consists of fixed asset

and working capital used in business.

Profit on the investment is a reward for risk taking.
If the ROI is high then the financial performance of a
business is good and vice-versa.
It also shows the areas where corrective actions are
needed.

MANAGEMENT AUDIT
Management Audit is an evaluation of the

management as a whole. It critically examines the

full management process.
It finds out the efficiency of the management.
Management auditing is conducted by a team of
experts.
The data is analyzed and conclusions are drawn about
managerial performance and efficiency.

MANAGEMENT INFORMATION
SYSTEM
In order to control the organisation properly the

management needs accurate information.

Information is collected continuously to identify
problems and find out solutions.
They need information about the internal working of
the organisation and also about the external
environment.
MIS collects data, processes it and provides it to the
managers.

PERT/CPM
Programme Evaluation and Review Technique (PERT)

and Critical Path Method (CPM) techniques were

developed in USA in the late 50's.
Any programme consists of various activities and subactivities.
Importance is given to identifying the critical activities.
by controlling the time of the critical activities, the total
time and cost of the job are minimized.

THANKS