1. CONTROLLING
DEFINITION
KOONZ AND O’DONNELL “ Control is measurement and
correction of the performance of activities of subordinates in
order to make sure those enterprise objectives and plans
devised to attain them are being accomplished.”
ERNEST DALE “ Control is a system, which not only provides
a historical record of what has happened to the business as a
whole, but also pinpoints the reasons why it has happened
and provides the data that enable the chief executive or the
departmental head to take corrective steps if he is on the
wrong track.”

2. Limitations
1. Control cannot be exercised over external
factors.
2. Employees may resist intensive control
measures.
3. Control may not function on untrained and
unqualified employees.
4. Control may be resisted as it interferes with
individual freedom, thinking and action.
5. Difficult to establish for intangible activities.

3. ELEMENTS OF CONTROL
1. AUTHORITY
2. KNOWLEDGE
3. GUIDANCE
4. DIRECTION
5. CONSTRAINT
6. RESTRAINT
All elements above are necessary for effective control.

4. ESSENTIALS OF GOOD CONTROLM SYSTEM
1. Suitability
2. Prompt reporting
3. Forward-looking
4. Focus on strategic points
5. Flexible
6. Objective
7. Economical
8. Understandable
9. Remedial action
10. Human Factor

5. FUNCTIONS OF A CONTROLLER
1. Establish, coordinate and administer
2. Compare actual performance with original
standards
3. Consult all dept.’s and mgt. segments reg.
objectives.
4. Administer policies and objectives.
5. Coordinate and supervise preparation of
reports to govt. agencies.
6. Fiscal protection to assets and properties.
7. Continuously apprise of economic and
social forces.

6. TECHNIQUES OF CONTROL
1.BUDGETARY CONTROLS
2.NON-BUDGETARY CONTROLS

7. BUDGETARY CONTROL - BENEFITS
1. Brings efficiency and economy
2. Determination of periodical objectives.
3. Precision, discipline and direction to routine
activities of enterprise.
4. Coordinates and integrates the operations of
different dept.’s
5. Standards against actual performance can be
measured.
6. Motivates subordinates.
7. Democratic or participative management.
8. Helps in looking forward to a planned future.

8. Limitations
1. Spending entire Budget amount may be a problem.
2. Budgets may create rigid financial structure and
managers may have very little choice over funds.
3. Budgets may be used to judge results of a
manager.
4. They may become expensive, meaningless and
cumbersome.
5. Danger of over-budgeting.

9. NON-BUDGETARY CONTROL
1. Statistical Data and Charts
2. Internal Audit
3. Special Reports
4. Confidential Reports
5. Break-Even Analysis
6. Information Control
7. Personal Observation
8. Network Analysis – CPM & PERT

10. Characteristics of Effective Control System
1. Accurate
2. Timely
3. Objective and Comprehensible
4. Focused on Strategic Control Points
5. Economically realistic
6. Organizationally realistic
7. Coordinated with the organisation’s work flow
8. Flexible
9. Perspective and operational
10.Accepted by the organisation’s members

11. MANAGEMENT INFORMATION
SYSTEM (MIS)
1. TIMELINESS
2. ACCURACY
3. RELEVANCE