Techniques of Managerial Control: 

1. Traditional Techniques:

a. Personal Observation: It creates psychological pressure on the employees to perform well as they are aware that they are being observed personally on their job.

b. Statistical Reports: Statistical analysis in the form of averages, percentages, ratios, correlation, etc. present useful information to the managers regarding performance of the organisation.

c. Break Even Analysis: Break even analysis is a technique used by managers to study the relationship between costs, volume and profits. The sales volume at which there is no profit, no loss is known as break even point. It helps in estimating profits at different levels of activities.

B.E.P = \(\frac{F}{s-v}\)

F = Fixed cost

S = Selling price per unit 

V = Variable cost per unit 

d. Budgetary Control:

Budgetary control is a technique of managerial control in which all operations are planned in advance in the form of budgets and actual results are compared with budgetary standards.

2. Modem Techniques:

a. Return on Investment: Return on Investment (ROI) can be used to measure overall performance of an organisation. It helps to know the invested capital has been used effectively for generating reasonable amount of return.

Return on investment = \(\frac{Net\,Income}{Total\,Investment}\)

b. Ratio Analysis:

Ratio Analysis refers to analysis of financial statements through computation of ratios.

c. Responsibility Accounting: Responsibility accounting is a system of accounting in which different sections, divisions, and departments of an organisation are set up as ‘Responsibility Centres’. The head of the centre is responsible for achieving the target set for his centre.

E.g. Cost centre, Revenue centre, Profit centre, Investment centre, etc.

d. Management Audit:

Management audit may be defined as evaluation of the functioning, performance, and effectiveness of management of an organisation.

e. PERT and CPM:

PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are important network techniques useful in planning and controlling.