MANAGEMENT CONCEPT ASSIGNMENT

TOPIC- DIFFERENT CONTROL TECHNIQUES

SUBMITTED BY SUBMITTED TO
RISHABH PATHAK DR. SAIMA MAM
 1. Budgeting or Budgetary control
A budget is a financial or quantitative statement prepared for a definite period of time. It states
the policy to be pursued during that period for the purpose of attaining a given objective. It
provides standards for comparison with the results actually achieved.
According to George R. Terry, "Budget is an estimate of future needs, arranged to an orderly
basis, covering some or all of the activities of an enterprise for a definite period of time".
In the words of Professor Larders, "the essence of a budget is a detailed plan of preparations for
some specified future period, followed by a system of records which will serve as a check upon
the plan".
Budgeting is the process of preparing budgets whereas budgetary control is a device or
technique of managerial control through budgets.

Essentials of Effective Budgetary control

(1) Effective Organisation: The concern should be effectively organised and the
responsibilities of each departmental managers are clearly defined and the line of authority
sharply drawn.
(2) Quick reporting: The subordinates must send reports on performance without any delay. The
managers on their part must analyse the report and take necessary action immediately.

(3) Support of top management: The top management must have a clear idea of the
objectives of budgetary control and should implement the budgetary control programme seriously in
order to infuse a sense of seriousness among the subordinates.

(4) Reward and Punishment: The employees whose performance is according to the budget
plans should be suitably rewarded and the employees whose performance is not as per budget
should not go unpunished.

(5) Appropriate Authority: The employees who are entrusted with the responsibilities of
implementation of budgetary control should also be given appropriate authority to do so. If a person
lacks authority to enforce his decision, it is difficult for him to fulfill his responsibilities
 2-Zero Based Budgeting ( ZBB )
As the name says “Zero-based budgeting” is an approach to plan and prepare the budget
from the scratch. Zero-based budgeting starts from zero, rather than a traditional budget
that is based on previous budgets.
With this budgeting approach, you need to justify each and every expense before adding
it to the actual budget. The primary objective of zero-based budgeting is the reduction of
unnecessary cost by looking at where costs can be cut.
Steps To Create A Zero based budget –
•Identifying the decision units that need a justification for every line item of expenditure in the proposed
budget.
•Preparing Decision Packages*. Each decision package is an identifiable and separate activity. These decision
packages are connected with the objectives of the company.
•The next step in ZBB is to rank the decision packages. This ranking is done on the basis of cost-benefit
analysis.
•Finally, funds are allocated on the basis of the above findings by following a pyramid ranking system to
ensure maximum results.
 Zero Based Budgeting Advantages-
•Efficiency: Zero-based Budgeting helps a business in the allocation of resources efficiently (department-
wise) as it does not look at the previous budget numbers, instead looks at the actual numbers.

•Accuracy: Against the traditional budgeting method that involves mere some arbitrary changes to the
earlier budget, this budgeting approach makes all departments relook every item of the cash flow and compute
their operation costs. This methodology helps in cost reduction to a certain extent as it gives a true picture of
costs against the desired performance.

•Budget inflation: As mentioned above every expense is to be justified. Zero-based budget compensates
the weakness of incremental budgeting of budget inflation.

•Coordination and Communication: Zero-based budgeting provides better coordination and

In simpler words, Gantt charts are a visual view of tasks displayed against time. They
represent critical information such as who is assigned to what, duration of tasks, and
overlapping activities in a project.
What is Gantt chart used for-
A Gantt Chart, in its simplest form, is a timeline that illustrates how the project will
progress during the project management process. And the timeline view offered by Gantt
Charts is proven quite useful for planning and scheduling projects.
It helps project managers and project teams to assess how long a project should take,
determine the resources needed, understand the dependencies between tasks, and plan
the order in which each task will be completed if the whole project is to deliver on time.
 History and evolution of Gantt charts-
Gantt charts have an interesting history that needs to be shared. The origin of the tool
dates back to the late 1800s when a Polish engineer Karol Adamiecki invented a diagram
called harmonograph. The major reason behind inventing this diagram was to improve the
way production schedules were displayed during that point of time. The only problem was
that all findings and other critical information were published in Polish and Russian only.
Top 11 benefits that Gantt charts offer:
1. Know what’s going on in your projects
2. Improved communication and team cohesion
3. Avoid resource overload
4. Measure the progress of projects
5. See overlapping activities and task dependencies
6. Experience more clarity
7. Practice better time management
8. Create a sense of accountability
 Program Evaluation And Review Technique-
PERT is a method of analyzing the tasks involved in completing a given project, especially the time
needed to complete each task, and to identify the minimum time needed to complete the total
project. It incorporates uncertainty by making it possible to schedule a project while not knowing
precisely the details and durations of all the activities. It is more of an event-oriented technique
rather than start- and completion-oriented, and is used more in those projects where time is the
major factor rather than cost. It is applied on very large-scale, one-time, complex, non-routine
infrastructure and on Research and Development projects.

Program evaluation and review technique (PERT) is a technique adopted by organizations to

PERT was developed in 1950 by the U.S. Navy during the Cold War and is intended for
large projects, which are:

•Complex
•Require a series of sequential tasks
•Performed in parallel with other projects
 PERT planning usually involves the following
steps:
1.Identifying Tasks and Milestones: Every project involves a series of required
tasks. These tasks are listed in a table allowing additional information on sequence and
timing to be added later.

2.Placing the Tasks in a Proper Sequence: The tasks are analyzed and placed in
a sequence to get the desired results.
3.Network Diagramming: A network diagram is drawn using the activity sequence
data showing the sequence of serial and parallel activities.
4.Time Estimating: This is the time required to carry out each activity, in three parts:
1. Optimistic timing: The shortest time to complete an activity
2. Most likely timing: The completion time having the highest probability
3. Pessimistic timing: The longest time to complete an activity

5.Critical Path Estimating: This determines the total time required to complete a
project.
 Critical Path Method
The critical path method (CPM) is a technique where you identify tasks that are necessary
for project completion and determine scheduling flexibilities. A critical path in project
management is the longest sequence of activities that must be finished on time in order
for the entire project to be complete. Any delays in critical tasks will delay the rest of the
project.

CPM revolves around discovering the most important tasks in the project timeline,
identifying task dependencies, and calculating task durations.

CPM was developed in the late 1950s as a method to resolve the issue of increased costs
due to inefficient scheduling. Since then, CPM has become popular for planning projects
and prioritizing tasks. It helps you break down complex projects into individual tasks and
gain a better understanding of the project’s flexibility.
Why use the critical path method?

•Improves future planning: CPM can be used to compare expectations with actual progress.
The data used from current projects can inform future project plans.

•Facilitates more effective resource management: CPM helps project managers prioritize
tasks, giving them a better idea of how and where to deploy resources.

•Helps avoid bottlenecks: Bottlenecks in projects can result in lost valuable time. Plotting out
project dependencies using a network diagram, will give you a better idea of which activities
can and can’t run in parallel, allowing you to schedule accordingly.