6 Modern techniques of control in Management
The following are the Modern Techniques of Control:
Table of Contents
Return on Investment (ROI)
The investment consists of fixed assets and working capital used in business. Profit from an investment serves as a reward for taking risks, while ROI represents a measure of a business’s financial performance.
The excess of revenue over costs is profits. ROI was developed by Du Point Corporation of the USA in 1919.
ROI highlights efficient performance with the capital used, helping improve financial results and compare business performance over time.
ROI also helps in inter-firm comparisons and identifies areas that need improvement.
CPM and PERT
This Modern technique of control is a commonly used tool to exercise control. Crucial Path Method (CPM) and Programme Evaluation and Review Technique (PERT) are network planning and diagramming techniques.
The network shows the order of activities, where each new activity waits for the previous one to finish.
A network shows several parallel paths, the longest of which is the crucial path. It is critical because the project cannot be completed in a lesser time.
If any activity on the critical path requires more time than was initially assigned, then the completion time for the entire project increases.
Until each activity time is fixed and entered into the network diagram, the critical path remains unknown.
While completing the project management one can compare actual time taken, activity by activity, with pre-fixed time. It becomes possible to suggest remedies to cut down time consumption.
Management Audit
Management audit is an evaluation of management as a whole. It critically analyses the entire management process consisting of planning, organising, directing, staffing and controlling.
To find out the achievement of management, evaluation and measurement is done of the company’s plans, objectives, policies, procedures personnel relations system of control.
An expert team performs periodic audit work, collecting data from past records, members of management, client input, and employee feedback.
The collected data is analyzed to draw conclusions about managerial performance and effectiveness.
Management Information System
In order to control function effectively, managers need accurate information on time. Information is needed for the internal working of the organisation as well as for the external environment.
Information is collected continuously to identify problems and work out alternative solutions. MIS generates data, process such data into information and provides the information to managers.
MIS may be manual or computerised. MIS is preferred in large organizations due to its capacity, speed, and accuracy. It allows managers to delegate authority to subordinates without losing control.
Management by Objectives
MBO facilitates planning and control. MBO must fulfil the following three requirements.
- Superiors and subordinates collaboratively set objectives for individuals.
- Regularly evaluate individual performance and provide feedback.
- Achievement of objectives brings rewards to individuals.
Self-Control
The most commonly used control technique is called self-control. Under this technique, an individual is given the freedom to determine his own standards of performance, self-evaluate and take corrective actions, if necessary.
Some amount of external control is compulsory so that an individual does not become careless and defiant. Self-control and imposed control are relative terms and they go hand in hand.
these were the Modern Techniques of Control. If you have any suggestions to improve this post, please share them in the comments.
Read more:
