Principles of Management UNIT-4 BBA notes

Unit 4 

Controlling,  Coordination and Managerial effectiveness

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Okay so let's start with the headings we are going to cover in this particular blog.

Controlling, 

Coordination and 

Managerial effectiveness

There is one another topic called "communication" which I have already posted in the subject "Business communication". So,  for that particular topic you may justcome here 👉💌 . 

Now let's start with the most important topic of unit 4 👉

Controlling

The whole process of management remains incomplete without proper controlling.  

Controlling can be understood as a way of guiding and monitoring employees for the work they have been given to perform. Thus, we can conclude that

Controlling is a process which facilitates monitoring and measuring the actual performance against the set standards.

Relationship between planning and controlling

Planning and controlling are the two different functions of Management. But they are so closely interlinked that "Any planning will not succeed in absence of effective controlling."

And on the very same hand, "Any controlling process will not be effective in absence of a measured and logically calculative planning. "

Thus, this proves that 

Planning and controlling are the two mutually supporting and interdependent functions of Management .

Which means that the success of a plan and control process depends on each other.

Therefore, planning and controlling are the two main functions of any business organisation which cannot be separated. And maintaining a positive relationship between planning and controlling is very important for any business to survive.

Nature of controlling

Pervasive function 

It is universally used and applied in the whole Management process as well as in day to day life.

Unveils the mistakes 

Controlling involves guiding and monitoring the working of employees, thus, discloses the mistakes made by them during their working.

Continuous process 

Controlling is a continuous process like other management functions as it has a never - ending scope in the field of Management.

A positive purpose 

Controlling is referred to as a positive purpose because the motive of controlling is to guide resources in such a way so that they can achieve the desired goal.

Exercised at all levels of Management 

Exercising control takes place at every level of management as every employee of the company is required to control someone and get controlled by someone.

Guides the behaviour of people and utilisation of resources 

Controlling monitors all the activities in an organisation performed by its employees, thus, provides guidance in utilisation of resources.

Evaluates performance 

Monitoring the working types of control employees results in the evaluation of the performance made by them.

Allows coping with different business environment 

Controlling means guiding and monitoring the whole working process hence it helps in coping with the different unplanned situations in a business.

Three dimensional process

Controlling is three dimensional as it involves all the three aspects of time which is past,  present and future. It looks back to the past performance, compares it to the present one and then makes the plan for the future accordingly.

Scope of controlling

Controlling has scope all over the world like

Control over an organisation 

Control over the plans and policies 

Control over cost 

Control over external relations of business 

Control over research and development 

Control over personnel 

Control over wages and salaries 

Control over methods used in any industry 

Control over capital and revenue expenditure 

And the overall control which is also known as the "Budgetary control".

Types of control

There are the three basic types of controls exercised universally :

Feed - forward control 

It means to plan precautions for any unwanted situation to prevent the errors or losses in that situation.

Concurrent control (Real time information control)

These are the controlling activities which aid the working of employees during the execution of plan made to achieve the desired result.

Feedback control

It is the post evaluation of the result given by the employees by a particular plan and thus, this involves taking actions after measuring the performance given by the employees.

Process of controlling 

1. Setting performance standards 

This process involves setting a particular target which has to be achieved.

2. Measuring the actual performance 

This means reporting and calculating the actual performance given by the employees.

3. Comparing the actual performance which the set standards 

After getting the reports of actual performance done by the employees. The reports are compared by the targets set by their manager.

4. Taking the relevant actions

After comparing the actual performance of employees the relevant actions are taken in such a way that if the performance is satisfactory then the manager rewards employees with incentives. And if the performance is dissatisfactory then he takes the required corrective action to finance the loss.

Elements / Methods of controlling

There have been 2 broad techniques of controlling the resources whether human or material for ages. 

Some of the techniques are mentioned below:

Traditional techniques 

Personal observation 

The working of employees is personally being observed, guided and monitor under this technique of controlling.

Statistical reports and analysis 

Manager compare the performance of his subordinates by the data and reports presented to him of their working.

Budgetary control 

"Budgeting refers to the preparation of budget and procedure of different activities in an organisation." 

Thus, budgetary control means effectively making an executing the budget for each activity being performed in an organisation.

Operational or internal audits 

Auditing means evaluation of the on-going process and accounts of any organisation by their expert employees.

Profit and loss control 

This control is being done by the profit and loss statement made by the Accountants of any organisation.

Break even analysis 

Break even analysis is a very efficient and widely used analysis for decision making in any organisation. This gives the outline of the point where any organisation will be in the situation of equilibrium that is no profit no loss.

Financial statement analysis

This this controlling is done by analysing an evaluating the financial statement (Trading profit & loss account and Balance sheet ) of an organisation.

Modern techniques

Return on Investment (ROI) 

Return on investment  means to evaluate the relationship between net profit and the investments made. 

More profit on less investment means the company is at growing stage and less profit even on more investments means the company need to look after its investment strategies.

Critical Path Method (CPM) & Program Evaluation and Review Technique (PERT) 

Both these methods are basically used for controlling the use of time in a compilation or achieving any particular goal.

This is done by planning, scheduling and implementing the time bound projects to get completed by the deadlines.

Management Information System (MIS)

This involves controlling by collecting data from different formal and informal sources to take the most appropriate actions and decisions.

Total Quality Management (TQM) 

The main objective of this type of control is to inculcate the attitude of constant improvement in the production within the minds of the production staffs.

Human Resource Accounting (HRA)

Human resource accounting refers to the procedure of identifying and measuring the  manpower of any organisation as employees are the real active asset to any business.

Determinants / Requirements of an effective control system

These are the some most basic and important factors which determine the effectiveness of any control system.

True feedback 

Objectivity (should be goal oriented and not biased) 

Suitable and appropriate degree of control 

Prompt/early reporting of any deviation in performance 

Having a few futuristic approach 

Paying direct attention to deviations 

Using comprehensible and simple method of controlling 

Controlling should always be solution-oriented.

Importance of controlling

• Controlling helps in achieving organisational goals .
• It enables the optimum utilisation of resources .
• Ensures the order and discipline in an organisation .
• Improves the coordination .
• Guides and monitors the employees in their working .
• Gives the employees a chance of growth and development .
• Helps in better future plannings .
• Makes employees accountable & responsible for their actions .
• Motivates employees in a direction to achieve organizational goal .
• Controlling facilitates delegation of authority.

Now let's move to a second the topic😌😌

Co - ordination

Concept of coordination

Coordination is that hidden, unseen and intangible factor which is the most responsible for the success of failure of any business or even any activity performed in a group.

Coordination function is "the most essential ingredient" for all the management functions.

"Coordination is an intangible factor which hormonizes, synchronizes and unifies all the individual efforts made by every member of a group or employee of a business for the achievement of the common objective."

Coordination : The Essence of Management

"Coordination is an integral, inseparable and inevitable part of management rather than just being a separate function of management like planning, organising, etc."

This statement itself proves that coordination is the essence of management. Coordination is the ruling intangible factor which decides the effectiveness of any management function.

In absence of coordination each and every management function will prove to be ineffective as coordination is the only factor which smooths and facilitates the effective functioning of any organisation.

Every management function wether planning, organising, staffing, directing or controlling becomes more powerful when assisted by proper coordination.

Need for coordination

"Interdependence is the basic need for coordination."

It is very obvious that interdependency of different management functions brings out the need of coordination among them. 

Every function of management including the employees of an organisation and money, machine, material needs to be coordinated properly in order to achieve the desired output.

Pooled interdependence 

This interdependence is between the departments who are not directly linked to each other but indirectly they all work for the same goal to be achieved.

● low coordination requirements ●

Sequential interdependence 

This interdependence is between the process based industry in which every activity goes in a sequence and activity 2 is completely dependent on activity 1.

● higher coordination needed ●

Reciprocal interdependence

Interdependent is required when the output of one unit becomes the input of another unit.

● very strong coordination needed ●

Types of coordination 

1. Internal coordination 

Internal coordination is the coordination within the organisation. It is mainly of three types:

Vertical coordination 

(Which is the coordination within the hierarchy of an organisation)

Horizontal coordination 

(Which is the coordination among various employees at the same level of management) 

Diagonal coordination 

(which is a coordination among all the employees of an organisation irrespective of their levels)

2. External coordination 

External coordination is the coordination with the external business factors like market, supplier, government, technology, etc.

Techniques in establishing coordination

• Observation method can be used to observe the employee behaviour and for a purposeful monitoring of the activities performed by them.
• Coordination requires careful and sound planning. Hence, setting clear -  cut objectives, assigning relevant roles and responsibilities is the most required technique for establishing coordination.
• Effective communication, as communication is the key to effective performance leading to effective coordination.
• Appointing coordinator or contact staffs.
• Using open discussion and deliberation method.
• Effective motivation of employees through seminars, rewards, etc 
• Proper leadership and supervision of the employees with a positive point of view.
• Creating a healthy working climate for the employees to strength the mutual trust and corporation among them.
• Choosing a suitable organisational structure and hierarchy .

Importance of coordination

Undoubtly, all the above points and headings were enough to prove coordination as the most important integral aspect of management and for a business to survive. Thus, here are some summarised points for you 🤷‍♂️

• Coordination is the primary condition to succeed .
• Coordination is helpful in handling complexity .
• Coordination brings unity of objectives and efforts .
• Coordination ensures staff stability. 
• Coordination reduces the employee turnover ratio (that is the number of employees leaving the organisation within 1 year).
• Coordination helps in balancing the employee efforts .
• Coordination helps in optimum utilisation of resources .
• Coordination helps in adapting with changes of external business environment. 
• Coordination enhances the company image. Cordination promotes the smooth and undesruptive functioning of an organisation.

Difficulties in coordination

Here are some common factors which make coordination a difficult task for all the managers and employees in an organisation :

Differences in orientation towards the organisational goal 

This means that different level managers and employees may conceive the organisational goal in their own way at their own level of thinking.

Differences in time orientation 

This means that different departments may have different goals according to time span.

For example, Research and development department may have long-term researches where as Production department may have urgent targets of outputs to be produced.

Differences in interpersonal orientation

This means that different managers at different levels may have different kind of approach towards their subordinates.

Differences in the formality of structure

This means that different department may have different level of formalities and strictness for rules and laws to be followed.

Such differences are the basic reason behind the lack of coordination or ineffective coordination.

Now let's come to the third and the last topic of unit 4 as well as the last topic of principles of management😍😍

 

Okay, let's cheers to ourselves as we have done the whole book and we are exam ready😌😎

Managerial effectiveness

"Managerial effectiveness means the extent of the abilities and skills of a manager by which he accomplish the desired goals."

Managerial effectiveness of a manager is measured by his skills, abilities and approaches used to achieve a desired output.

It basically comprises of how effectively and efficiently a manager works, co-ordinates and achieves given level of output.

Components / Constituents of managerial effectiveness

Manager 

One who performs the management functions to achieve the goal.

Organisation 

The structure in which a manager performs the task given.

Entrepreneurship 

The skills through which a manager performs all the tasks given to him.

Environment

The dynamic economic, political, social and legal system within which a business works.

So here, we are done with the unit 4.

Look the last topic doesn't contain much to explain you🤷‍♂️🤷‍♂️ but then to if you still want to have an overlook of that in more depth you must come here👉💌💌 .

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