Control Process in Management

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4 main steps in control process in management

4 main steps in control process in management are:

Control as a management function involves the following steps:

1. Establishing standards:

Standards are criteria against which results are measured. They are norms to achieve the goals. Standards are usually measured in terms of output. They can also be measured in non-monetary terms like loyalty, customer attraction, goodwill etc. Some of the standards are as.

a. Time standards:

The goal will be set on the basis of time lapse in performing a task.

b. Cost standards:

These
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v) Net profits to tangible net worth:

Net worth is the difference between tangible assets (not good will, etc) and total liabilities. This ratio of net worth is used to measure profitability over a long period.

vi) Net profits to net working capital:

The net-working capital is the operating capital at hand. This would determine the ability of the business to finance day-to-day operations.

vii) Collection period on credit sales:

The collection period should be as short as possible. Any deviation from established collection period should be promptly investigated.

viii) Inventory to net working capital:

This ratio is to determine the extent of working capital tied up in inventory. Generally, this ratio should be less than 80 per cent, ix) Total debt to tangible net worth: This ratio would determine the financial soundness of the business. This ratio should remain as low as possible.

(d) Comparative statistical analysis:

The operations of one company can be usefully compared with similar operations of another company or with industry averages. It is a very useful performance measuring device.

(e) Personal observation:

Personal observation both formal and informal can be used in certain situation as a measuring device for performances, specially, the performance of the personnel. The informal observation is generally a day-to-day routine type. A manager may walk through a store to have a general idea about how people are working.

3. Comparing
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