Skip to content

Techniques of managerial control

Let’s break down these techniques of controlling into simple terms that are easy to understand. These techniques are tools that managers use to track progress, control finances, and manage time so that projects or tasks are completed successfully.

1. Budgetary Control

Budgetary control is all about making sure money is being spent wisely and that a business or project stays within its financial limits. Think of it like managing your allowance. image

Example:

  • For you: If you get $50 a month for allowance, you might decide to spend $20 on snacks, $10 on movies, and save $20 for a big purchase later. You’re controlling your money so you don’t run out before the end of the month.

  • In business: A company might set a budget for different departments (like marketing, sales, or production) to ensure they don’t spend too much money. The budget acts like a financial plan, and the company keeps track of how much is being spent compared to the plan.

2. Break-even Analysis

Break-even analysis helps businesses figure out how much they need to sell in order to cover all their costs and start making a profit. The break-even point is when the business is neither making money nor losing money—just breaking even. image

Example:

  • For a lemonade stand: Imagine it costs you $30 to buy lemons, sugar, and cups. If you sell each cup of lemonade for $3, your break-even point would be selling 10 cups, because $3 × 10 = $30. After selling 10 cups, any additional sales would be profit.

  • In business: A company might calculate how many products they need to sell to cover their production costs. Once they reach that point, any more sales would start generating profit.

3. Gantt Chart

A Gantt chart is a tool that helps plan and track the progress of a project over time. It’s like a visual timeline that shows what tasks need to be done, when they need to be finished, and how long they will take. It’s super helpful for staying organized and making sure everything is done on time. image

Example:

  • For a school project: Let’s say you have a group project due in 2 weeks. A Gantt chart could show when each part of the project (research, writing, editing, presenting) needs to be done. You can see which tasks overlap and make sure nothing falls behind.

  • In business: A Gantt chart can be used for big projects like building a house. It will show when each part of the project (designing, getting materials, construction) will start and finish, making it easier to track progress and deadlines.

4. PERT & CPM (Network Techniques)

Both PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) are network techniques used to plan and control large projects. They help break a project into smaller tasks, figure out the order in which tasks should be done, and identify the tasks that are most important (those that need to be done on time to avoid delays in the project). image

  • PERT is used when the project timeline is uncertain, and it estimates how long each task will take.
  • CPM is used for projects with a clear timeline and helps find the critical path, which is the sequence of tasks that must be completed on time to avoid delaying the entire project.

Example:

  • For a school play: If you’re organizing a school play, you might use PERT or CPM to figure out all the tasks—writing the script, rehearsing, making costumes, and setting up the stage. You’ll then create a timeline for each task and figure out the most important ones that need to be done first.

  • In business: For a construction project, PERT or CPM helps managers see which tasks (like getting permits or ordering materials) need to happen in a specific order and which can be done at the same time. This helps them finish the project on time.

In Summary:

  1. Budgetary Control: A financial tool that ensures money is being spent wisely and stays within limits. It’s like managing your allowance.

  2. Break-even Analysis: A method to find out how much you need to sell to cover your costs and start making a profit.

  3. Gantt Chart: A visual timeline that helps you track the progress of a project and make sure tasks are done on time.

  4. PERT & CPM: Techniques that help plan and control complex projects by breaking them into tasks, estimating time, and identifying the most important tasks that must be done on time to avoid delays.

These tools help both students and businesses stay organized, track progress, and make sure things are completed successfully and on time!

Hive Chat
Hi, I'm Hive Chat, an AI assistant created by CollegeHive.
How can I help you today?
🎶
Hide