Elements of Management Planning & Control Systems

Elements of Management Planning & Control SystemsPlanningControlCoordination

Planning

Design of a desired Future State

Projects Effective ways of attaining desired future state

Provides guidelines to managers for day to day decisions

Continuous process

ControlMeasuring Performance against Predetermined Objectives and StandardsCommunicating results to managersCalculating deviations from set objectives and targetsFrame all possible alternatives to correct indicated variancesChoose and implement the best alternativeAppraise the corrective action and improve future planning and control cycles

CoordinationAn effect that occurs when managerial functions of planning and control are accomplishedSynchronisation of individual actions so that each subdivision of an entity effectively works towards the common objectives.

Management Planning & Control systemSet GoalsExamine alternativesImplement PlanEvaluatePerformance

Budgeting as a tool for Management Planning & ControlCommunication of goals and targetsCoordination to maximise utilisation of scarce resourcesMeasurement of successMotivation rewards and Punishments

Application of BudgetOutputs Sales Projections required ProductionInputs Raw Material & ManpowerFacilities Production capacityCash Needs cashflow predictionsControl

Time Frame

Short Range 3 , 6 or 12 months or a business cycleLong Range Strategic PlansForecasted Profit & loss statements and Balance Sheets for a number of years

Budgeting ProcessBudget Sales - Pricing decisions, Demand forecasting, cost recovery, profit marginsBudget Production outputs, inputs,overheadsBudget cost of goods soldBudget admin and selling expensesBudget Profit & loss account & Balance SheetCash Budget