As a result, planning and control intertwine and go hand in hand. Planning makes control more efficient, while planning improves future control. Once suspended, business studies will no longer be able to comment or post messages until their ban is lifted. Control is everywhere. It can be said without a doubt that control is essential for every manager. To know the importance of control, we must first understand what control is. This is a technique where we limit our previous activities so that we can do better according to the plan. This helps to compare the actual activity with the planned activity. 2. Ratio analysis: It calculates different ratios for the analysis of financial statements. Key figures such as liquidity ratio, solvency ratio, etc. help determine the stability of a company.
Students can download Vedantu Chapter 8 Grade 12 Business Study Notes for free. The notes are available in PDF format. This format allows students to easily upload notes. There are many NCERT Class 12 Revision Notes Business Studies Chapter 8 solutions that emphasize the importance of employee motivation. This is exactly what a good control system can help an organization. Management auditing is the process of evaluating management in an organization. It is useful to improve management effectiveness and increase efficiency. It assesses managers` functions and identifies areas where deficiencies are observed.
The following point will be useful in explaining the importance of performance auditing as a control technique: With control, an organization can achieve the best results because it ensures better use of resources. Once unpublished, all Business Studies contributions are hidden and accessible only to themselves. Without control, planning is worthless. When control is exercised, it is successful. It detects deviations and initiates corrective actions if necessary. 5. Explain how performance auditing is an effective control technique. Management auditing is a technique for measuring the efficiency and effectiveness of management. This is a comprehensive and constructive review.
Thus, we can say that it is defined as the verification of functional performance and improve its effectiveness in future periods, so it serves as an effective technique to control the following points that turn out to be the same. (i) It assists in identifying current and potential deficiencies in the performance of management functions. (ii) Contribute to the improvement of an organization`s control system by continuously monitoring management performance; (iii) ensure that existing management policies and strategies are updated in light of environmental changes; The result is effective management control. Use resources efficiently: A manager can reduce wasted resources by using resources efficiently through the control process. It depends on the schedule: the control depends on the scheduling function, because the actual performance is compared to the scheduled service. Planning therefore serves as the basis for control. 7. Name the points that emphasize the importance of control. In this way, a manager can achieve good results. Like traffic rules, control always leads to staying on track.
And better use of resources at minimal cost ensures the efficiency of the organization. This is only possible with a control function. According to various Class 12 recollections, a good control system works by allowing management to verify whether the standards set by the organization are correct or not. Due to the changing business environment, standards should be flexible enough to be adjusted as necessary. (ii) Modern techniques Modern control techniques are those of recent origin and relatively new in the management literature. They offer a new way of thinking about how different aspects of an organization can be controlled. (a) Return on investment is a useful technique that provides the basic benchmark for measuring whether the capital invested has actually been used to obtain an appropriate return. It can be calculated because ROI provides senior management with an effective means of control to measure and compare the performance of different departments. It also allows department heads to understand the problem that is negatively impacting ROI.
b) Analysis of key figures This is the analysis of financial statements by calculating key figures. The most commonly used ratios are liquidity ratios Liquidity ratios are calculated to determine the company`s short-term solvency. Solvency ratios Ratios calculated to determine the long-term solvency of businesses are called solvency ratios. Profitability ratios These ratios are calculated to analyze a company`s profitability position. Revenue ratios They are calculated to determine the efficiency of operations based on the efficient use of resources.