Which of the following is a modern technique of Controlling?

PERT and CPM

The correct answer is option (3) : PERT and CPM

The techniques of managerial control can be categorised as :

(i) Traditional Techniques : These techniques have been used by companies for a long time. These include :

(a) Personal Observation: It enables the manager to collect first-hand information and create psychological pressure on the employees.

(b)Statistical Reports : Performance of the organisation in various areas is analysed through calculation of averages, percentages, ratios, correlation etc.

(c) Breakeven Analysis : It is a technique used by managers to study the relationship between costs, volume and profits.

(d) Budgetary Control : It 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.

(ii) Modern Techniques: These techniques have been recently developed and adopted by organisations. These include :

• (a) Return on Investment : It is a useful technique which provides the basis yardstick for measuring whether the capital invested has been used effectively or not.

• (b) Ratio Analysis : It refers to an analysis of financial statements through computation of ratios.

•(c) Responsibility Accounting : It is a system of accounting in which different sections, divisions and departments of an organisation are setup a Responsibility Centres" for achieving their respective tar get.

• (d) Management Audit : It refers to systematic appraisal of the overall performance of management of the organisation.

• (e) PERT and CPM: Programme Evaluation and Review Technique and Critical Path Methods are used for planning, scheduling and implementing time bound projects involving performance of a variety of complex, diverse and interrelated activities.

•(f) Management Information System : MIS is a computer based information system that provides information and support for effective managerial decision making.