FINANCIAL GOAL SETTING & RESPONSIBILITY BUDGETING

Views:
 
Category: Entertainment
     
 

Presentation Description

nmbk mjbknnjbkj

Comments

Presentation Transcript

FINANCIAL GOAL SETTING & RESPONSIBILITY BUDGETING :

FINANCIAL GOAL SETTING & RESPONSIBILITY BUDGETING

INTRODUCTION :

INTRODUCTION

Slide3:

Control Tight Loose Monitors Activity Frequently Extensive Involvement Of Management In Day To Day Operations Budget Is Considered As Binding Constraint Limited Monitoring Limited Involvement Of Management In Day To Day Operations Budget Is Considered A Tool For Planning & Communication

MANAGEMENT :

MANAGEMENT

CONTROL :

CONTROL According to Henry Fayol, “ Control consists of verifying whether everything occurs in conformity with the plans adopted, with the objective of pinpointing weakness and errors are rectified and their recurrence is avoided. Control Device Detector Entity being Controlled Assessor Effector Communication

CHARACTERISTICS OF CONTROL :

CHARACTERISTICS OF CONTROL Managerial Function Continuous Process Forward Looking Closely Related To Planning

SYSTEM :

SYSTEM

MEANING & DEFINITION OF MANAGEMENT CONTROL SYSTEMS :

MEANING & DEFINITION OF MANAGEMENT CONTROL SYSTEMS According to Robert Anthony , “ Management Control is the process by which managers influence other members of the organization to implement the organization strategies. Management control systems are tolls to aid management for steering an organization toward its strategic objectives. Management controls are only one of the tools which mangers use in implementing desired strategies”. According to Horngren , “Management Control System is an integrated technique for collecting and using information to motivate employee behavior and to evaluate performance”.

NATURE OF MANAGEMENT CONTROL SYSTEMS :

NATURE OF MANAGEMENT CONTROL SYSTEMS Focus On Programmes & Responsibility Center Use Of Planned And Actual Data Set Of Action Total System Coordination & Integration System Designed With Financial Figures Continuous System Involvement Of Line & Staff Managers Reciprocity Expansibility

ESSENTIALS OF GOOD MANAGEMENT CONTROL SYSTEM :

ESSENTIALS OF GOOD MANAGEMENT CONTROL SYSTEM Essentials Of Good Management Control Systems Effective Planning Motivation of Employees Involvement of Top Management Establish Proper Communication Mechanism

PROCESS OF MANAGEMENT CONTROL SYSTEM :

PROCESS OF MANAGEMENT CONTROL SYSTEM Setting Performance Standards Measure & Compare Actual With Planned Results Evaluate Results, Give Feedback And Coach Take Corrective Action

TECHNIQUES OF MANAGEMENT CONTROL SYSTEM :

TECHNIQUES OF MANAGEMENT CONTROL SYSTEM Balance Scorecard TQM Kaizen (Continuous Improvement) Activity Based Costing Target Costing Benchmarking & Bench-trending Just In Time Budgeting Capital Budgeting

BALANCE SCORECARD :

BALANCE SCORECARD The balance scorecard is a performance management tool which began as a concept for measuring whether the smaller scale operational activities of a company are aligned with its larger scale objectives in terms of vision & Strategy. By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these, the balance scorecard helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interest.

TQM:

TQM Total Quality Management is a business management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, call centers, government and service industries, as well as NAASA space & science programs. Total : involving the entire organization, supply chain &/ or the product life cycle. Quality: with its usual definitions, with all its complexities. Management: The system of managing with steps like plan, organize, control, lead, staff, provisioning & organizing.

KAIZEN :

KAIZEN It is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers. By improving standardized activities and processes, kaizen aims to eliminate waste.

ACTIVITY BASED COSTING :

ACTIVITY BASED COSTING ABC is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products & services according to actual consumption by each; it assigns more indirect costs into direct costs. In this way an organization can establish the true cost of its individual products & services for the purposes of identifying and eliminating those which are unprofitable and lowering the prices of those which are overpriced .

TARGET COSTING :

TARGET COSTING It is a pricing method used by the firms. It is defined as “A cost management tool for reducing the overall cost of a product over its entire life cycle with the help of production, engineering, research and design.” A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required profit margin from that product at a particular selling price.

BENCH MARKING & BENCH TRENDING :

BENCH MARKING & BENCH TRENDING It is the process of comparing the cost, cycle time, productivity or quality of a specific process or method to another that is widely considered to be an industry standard or best practice. The result is often a business case for making changes in order to make improvements.

JUST IN TIME :

JUST IN TIME A technique for improving the performance of virtual machines in computing. It is also used in inventory ordering.

BUDGETING :

BUDGETING Budget generally refers to a list of all planned expenses and revenues. It is plan for saving & spending. A budget line is used to illustrate the tradeoffs between 2 or more goods.

CAPITAL BUDGETING :

CAPITAL BUDGETING It is the planning process used to determine whether a firm’s long-tern investments such as new machinery, replacement machinery, new plants, new products and research development projects are worth pursuing. It is budget for major capital or investment, expenditures.

STRATEGY FORMULATION :

STRATEGY FORMULATION It is the development of long range plans for the effective management of environmental opportunities and threats in light of corporate strengths & weakness. It includes defining the corporate mission, specifying achievable objectives, developing strategies and setting policy guidelines. It begins with situational analysis.

OPERATIONAL/ TASK CONTROL :

OPERATIONAL/ TASK CONTROL It is concerned with individual & group performance as compared with the individual & group role prescriptions required by organizational plans. Operational control systems are designed to ensure that day to day actions are consistent with established plans & objectives.

RELATIONSHIP BETWEEN STRATEGIC FORMULATION, MANAGEMENT CONTROL & OPERATIONAL CONTROL :

RELATIONSHIP BETWEEN STRATEGIC FORMULATION, MANAGEMENT CONTROL & OPERATIONAL CONTROL They are interdependent & interrelated activities. Strategic formulation deals with deciding the goals of an organization and providing resources needed for attaining the goals and policies. It thus lays the foundation for management control because once goals are determined; the management translates them into specific tasks and pursues the goals. Management control focuses on the performance of each responsibility center. It involves control of managers of responsibility centers by the higher ups. As such its guidelines for operational control. The mangers of responsibilities center in turn identify specific tasks & exercise control over them. It goes without saying that if operational control is not properly exercised, attainment of goals is just not possible. This creates imbalances and poses threats before the organization that may be forced to look again at its strategies and introduces necessary changes.

Slide26:

Functions Activity Nature of end results Top Level The least systematic Long run focus Strategy Formulation Goals, strategies, & policies Uses rough approximation for future Process of planning more important Planning equally important Management control Implementation of strategies Lower level The most systematic Focus short run operational activities Task or operational control Efficient & effective implementation of individual tasks Uses accurate current data Control more important

authorStream Live Help