question_answer 19)

What techniques of control can the company use?

Answer:

The company should follow the modern techniques to control the system (i) ROI (Return on Investment) It is a useful technique of controlling overall performance of a company It indicates how effectively resources are being used, facilitates balanced use of capital employed, focuses on profits and relates them to capital invested. (ii) Responsibility Accounting Under this technique, organization is divided into centres which is responsible for overall growth of various departments. Responsibility centres in the organization are (a) Cost Centre Under this, one can check the production and operational cost. (b) Revenue Centre Sales or marketing departments come under this, it is responsible for generating revenue. (c) Profit Centre Profit = Revenue-Cost. It ensures the actual profit derived from the business. (d) Investment Centre This centre ensures the optimum use of assets and it makes use of return on investment. (iii) MIS (Management Information System) It is a control technique which provides information and support for effective managerial decision making. It provide accurate information to the managers, helps in planning, controlling, provides cost effective information and many more.