Hirachand Nemchand College of Commerce, Solapur.
Hirachand Nemchand College of Commerce, Solapur.
Introduction
Operational control systems are designed to ensure that day-to-day actions are consistent with established plans and objectives. It focuses on events in a recent period. Operational control systems are derived from the requirements of the management control system. Corrective action is taken where performance does not meet standards. This action may involve training, motivation, leadership, discipline, or termination.
Hirachand Nemchand College of Commerce, Solapur.
The main aim of operational control is to allocate and use of resources available in the organization and continue the evaluation process with it, Operational control is concerned with action or performance of the organization. The objectives of the organization can be assessed through the operational control.
Hirachand Nemchand College of Commerce, Solapur.
Difference between Strategic and Operational Control
• The following are the important points which clear the difference between strategic and operational control. ? Basic Question ? Target/Aim/Objective ? Focus ? Period ? Main Concern ? Tools & Techniques ? Exercise
Hirachand Nemchand College of Commerce, Solapur.
1) Basic Question In case of strategic control, it answers the question, like ‘Are we moving in the right direction?’ While operational control relates to ‘How are we performing?’ 2) Target/Aim/Objective The main aim of strategic control is to questioning continuously of the basic direction of strategy. The operational control deals with the allocation and utilization of organizational resources. 3) Focus The main focus of strategic control is on External Environment but operational control deals with internal environment of the organization.
Hirachand Nemchand College of Commerce, Solapur.
4) Period Strategic control is a long term process but operational control is s short term process. 5) Main Concern Strategic control is mainly concerned with the steering the organizations future direction. Operational control is concerned with action or performance. 6) Tools & Techniques Strategic control involves environmental scanning, information gathering and review. Operational strategy consists of Budgets, Schedules and Management by Objectives (MBO).
Hirachand Nemchand College of Commerce, Solapur.
7) Exercise Strategic control is exercised by top level management with a well support of middle & lower level. In case of operational control, it is exercised by executives or middle level management on the direction of the top management.
Hirachand Nemchand College of Commerce, Solapur.
Evaluation techniques for Operational control
The main aim of organization is to allocate the resources and use effective manner with the support of operational control. There are three types of techniques 1) Internal Analysis 2) Comparative Analysis 3) Comprehensive Analysis
Hirachand Nemchand College of Commerce, Solapur.
Classification of Evaluation Techniques
Internal Analysis
Value Chain
Comparative Analysis
Historical
Comprehensive Analysis
Qualitative
Industry Base
Balanced Score Card
Quantitative
Benchmarking
Key Factor Rating MBO MOU
Network
Hirachand Nemchand College of Commerce, Solapur.
1) Internal Analysis Internal analysis deals with following aspects ? Value chain Analysis This analysis deals with inter-related activities in the organization. The operational evaluation is based on value chain for effective utilization of all the resources. ? Qualitative Analysis The qualitative analysis is based on intuition, judgment and opinion. The qualitative techniques can also used for the evaluation of performance for effective operational control. As per the requirement the firm can use the qualitative technique for analyzing operations effectively.
Hirachand Nemchand College of Commerce, Solapur.
? Quantitative Analysis It deals with both financial and non-financial techniques such as Ratio analysis, Activity Based Costing (ABC), Economic Value Added (EVA) etc. in case of financial. While in case of non-financial - market ranking, rate of advertising service call rate etc. are the techniques are used.
Hirachand Nemchand College of Commerce, Solapur.
2)Comparative Analysis It includes following techniques of analysis ? Historical Analysis The analysis is done for comparing the actual performance and determining the growth in actual situation. Historical analysis helps in finding new path of performance in current situations. ? Industry Base The comparison between same line industries can be done through the assessment & evaluation. For making a firm competitive industrial norms are applied. Industrial based analysis helps in future direction. ? Benchmarking It is a comparative method where a firm finds the best practices in the firm. Best practices are the benchmarks that should be adopted by a firm as the standard to exercise operational control.
Hirachand Nemchand College of Commerce, Solapur.
3) Comprehensive Analysis This includes following important factors ? Balanced Scorecards It is based on the identification of four key performance measured of customer perspective, internal business perspective, innovation and learning perspective and the financial perspective. ? Key Factor Rating This includes three important factors ? Network techniques ? Management by Objectives (MBO) ? Memorandum of Understanding (MOU)
Hirachand Nemchand College of Commerce, Solapur.
? Network techniques Network techniques like programme Evaluation & Review Techniques (PERT). Critical Path Method (CPM) are used extensively for the operational controls of scheduling & resources allocation in projects. ? Management by Objectives (MBO) MBO system is proposed by Peter Drucker, which is based on a regular evaluation of performance against objectives. The process of consultation, objective setting leads to the establishment of a control system that operates on the basis of commitment & self-control.
Hirachand Nemchand College of Commerce, Solapur.
?Memorandum of Understanding (MOU)
MOU is an agreement between a public enterprise and the Government by the administration ministry in which both parties clearly specify their commitments and responsibilities. Hence a public enterprise has to follow the commitments and responsibilities & get evaluation a firm’s performance.
Hirachand Nemchand College of Commerce, Solapur.
Thank You!
By Narsinh Pulgam
Hirachand Nemchand College of Commerce, Solapur.
doc_885495193.ppsx
Hirachand Nemchand College of Commerce, Solapur.
Introduction
Operational control systems are designed to ensure that day-to-day actions are consistent with established plans and objectives. It focuses on events in a recent period. Operational control systems are derived from the requirements of the management control system. Corrective action is taken where performance does not meet standards. This action may involve training, motivation, leadership, discipline, or termination.
Hirachand Nemchand College of Commerce, Solapur.
The main aim of operational control is to allocate and use of resources available in the organization and continue the evaluation process with it, Operational control is concerned with action or performance of the organization. The objectives of the organization can be assessed through the operational control.
Hirachand Nemchand College of Commerce, Solapur.
Difference between Strategic and Operational Control
• The following are the important points which clear the difference between strategic and operational control. ? Basic Question ? Target/Aim/Objective ? Focus ? Period ? Main Concern ? Tools & Techniques ? Exercise
Hirachand Nemchand College of Commerce, Solapur.
1) Basic Question In case of strategic control, it answers the question, like ‘Are we moving in the right direction?’ While operational control relates to ‘How are we performing?’ 2) Target/Aim/Objective The main aim of strategic control is to questioning continuously of the basic direction of strategy. The operational control deals with the allocation and utilization of organizational resources. 3) Focus The main focus of strategic control is on External Environment but operational control deals with internal environment of the organization.
Hirachand Nemchand College of Commerce, Solapur.
4) Period Strategic control is a long term process but operational control is s short term process. 5) Main Concern Strategic control is mainly concerned with the steering the organizations future direction. Operational control is concerned with action or performance. 6) Tools & Techniques Strategic control involves environmental scanning, information gathering and review. Operational strategy consists of Budgets, Schedules and Management by Objectives (MBO).
Hirachand Nemchand College of Commerce, Solapur.
7) Exercise Strategic control is exercised by top level management with a well support of middle & lower level. In case of operational control, it is exercised by executives or middle level management on the direction of the top management.
Hirachand Nemchand College of Commerce, Solapur.
Evaluation techniques for Operational control
The main aim of organization is to allocate the resources and use effective manner with the support of operational control. There are three types of techniques 1) Internal Analysis 2) Comparative Analysis 3) Comprehensive Analysis
Hirachand Nemchand College of Commerce, Solapur.
Classification of Evaluation Techniques
Internal Analysis
Value Chain
Comparative Analysis
Historical
Comprehensive Analysis
Qualitative
Industry Base
Balanced Score Card
Quantitative
Benchmarking
Key Factor Rating MBO MOU
Network
Hirachand Nemchand College of Commerce, Solapur.
1) Internal Analysis Internal analysis deals with following aspects ? Value chain Analysis This analysis deals with inter-related activities in the organization. The operational evaluation is based on value chain for effective utilization of all the resources. ? Qualitative Analysis The qualitative analysis is based on intuition, judgment and opinion. The qualitative techniques can also used for the evaluation of performance for effective operational control. As per the requirement the firm can use the qualitative technique for analyzing operations effectively.
Hirachand Nemchand College of Commerce, Solapur.
? Quantitative Analysis It deals with both financial and non-financial techniques such as Ratio analysis, Activity Based Costing (ABC), Economic Value Added (EVA) etc. in case of financial. While in case of non-financial - market ranking, rate of advertising service call rate etc. are the techniques are used.
Hirachand Nemchand College of Commerce, Solapur.
2)Comparative Analysis It includes following techniques of analysis ? Historical Analysis The analysis is done for comparing the actual performance and determining the growth in actual situation. Historical analysis helps in finding new path of performance in current situations. ? Industry Base The comparison between same line industries can be done through the assessment & evaluation. For making a firm competitive industrial norms are applied. Industrial based analysis helps in future direction. ? Benchmarking It is a comparative method where a firm finds the best practices in the firm. Best practices are the benchmarks that should be adopted by a firm as the standard to exercise operational control.
Hirachand Nemchand College of Commerce, Solapur.
3) Comprehensive Analysis This includes following important factors ? Balanced Scorecards It is based on the identification of four key performance measured of customer perspective, internal business perspective, innovation and learning perspective and the financial perspective. ? Key Factor Rating This includes three important factors ? Network techniques ? Management by Objectives (MBO) ? Memorandum of Understanding (MOU)
Hirachand Nemchand College of Commerce, Solapur.
? Network techniques Network techniques like programme Evaluation & Review Techniques (PERT). Critical Path Method (CPM) are used extensively for the operational controls of scheduling & resources allocation in projects. ? Management by Objectives (MBO) MBO system is proposed by Peter Drucker, which is based on a regular evaluation of performance against objectives. The process of consultation, objective setting leads to the establishment of a control system that operates on the basis of commitment & self-control.
Hirachand Nemchand College of Commerce, Solapur.
?Memorandum of Understanding (MOU)
MOU is an agreement between a public enterprise and the Government by the administration ministry in which both parties clearly specify their commitments and responsibilities. Hence a public enterprise has to follow the commitments and responsibilities & get evaluation a firm’s performance.
Hirachand Nemchand College of Commerce, Solapur.
Thank You!
By Narsinh Pulgam
Hirachand Nemchand College of Commerce, Solapur.
doc_885495193.ppsx