What techniques of control can the company use?
The company should follow the modern techniques to control the system
(i) ROI (Return on Investment)
It is a useful technique of controlling overall performance of a company. It indicates how effectively resources are being used, facilitates balanced use of capital employed, focuses on profits and relates them to capital invested.
(ii) Responsibility Accounting Under this technique, organisation is divided into centres which is responsible for overall growth of various departments. Responsibility centres in the organisation are
(a) Cost Centre Under this, one can check the production and operational cost.
(b) Revenue Centre Sales or marketing departments come under this, it is responsible for generating revenue.
(c) Profit Centre Profit = Revenue – Cost. It ensures the actual profit derived from the business.
(d) Investment Centre This centre ensures the optimum use of assets and it makes use of return on investment.
(iii) MIS (Management Information System)
It is a control technique which provides information and support for effective managerial decision making. It provide accurate information to the managers, helps in planning, controlling, provides cost effective information and many more.
Following are some behaviours that you and others might engage in on the job. For each item, choose the behaviour that management must keep a check to ensure an efficient control system.
1.Biased performance appraisals.
2.Using company’s supplies for personal use.
3.Asking a person to violate company’s rules.
4.Calling office to take a day off when one is sick.
5.Overlooking boss’s error to prove loyalty
6. Claiming credit for someone else’s morn.
7. Reporting a violation on noticing it.
8. Falsifying quality reports.
9. Taking longer than necessary to do the job.
10. Setting standards in consultation with workers.
You are also required to suggest the management how the undesirable behaviour can be controlled.
A company M limited is manufacturing mobile phones both for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction. Also mobile market in India has grown tremendously and new players have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing.
1. Identify the benefits the company will define from a good control system.
Give the steps in the control process that the company should follow to remove the problems it is facing.
Explain the importance of controlling in an organisation. What are the problems faced by the organisation in implementing an effective control system?
How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?