Accounting technicians scheme west africa
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| E.6 Control Process The control process consists of the steps involved in controlling. It consists of four steps establishing performance standard, measuring actual performance, comparing actual performance against standard, and taking corrective action. Establishing performance standard however is an activity that is undertaken in the planning process and utilised in the control process. For the sake of completeness, the establishment of measurable standards is usually discussed also in the control process. Figure 3.11 Basic Steps in the Control Process ab Establish Standards and Methods for Measuring Performance Ideally, the goals and objectives established during the planning process will already be stated in clear, measurable terms that include specific deadlines. Various standards can beset as follows i) Physical standards labour-hours per unit, machine-hours per unit, quantities produced per hour, customers served per hour etc. 171 ii) Cost standards-labour cost per unit, material cost per unit etc. iii) Capital standards-return on investment, current ratio, debt ratio etc. iv) Revenue standards - revenue per salesclerk, sales per capita, sales per month. b) Measure the Performance Like all aspects of control, measurement is an ongoing, repeated process. The means of measuring performance will depend on the standards that have been set. They may include but not limited to, amount of materials used, number of defects found scrap rate, profits, return on investment, etc. As soon as the means of measuring performance is established, usually, both quantitatively and qualitatively, the next is to establish the frequency of the measure. The frequency of measurement depends on the type of activity being measured. Ina manufacturing plant, levels of gas particles in the air, for example, could be continuously monitored safety, whereas progress on long-term expansion objectives might need to be reviewed by top management only once or twice a year. Similarly, the management of Mr. Biggs restaurant might be required to examine customer waiting time on a continual basis. Good managers avoid allowing extended periods to pass between performance measurements. c) Download 3.37 Mb. Share with your friends:
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