UNIT-7

Communication and Controlling

 Topics
Communication
1. Communication Process
2. Importance of Communication
3. Interpersonal Communication
4. Barriers to effective Communication
5. Communication in Organizations
6. Using Communication skills to Manage Conflicts
Controlling
7. Basic Control Process
8. Control as a feedback system
9. Feed forward control
10. Requirements for effective control
11. Control Techniques
12. Overall Controls and Preventive Controls
13. Global Controlling.
 1. COMMUNICATION PROCESS
 In very Large organizations the ability to express oneself is perhaps
the most important of all the skills a person can possess- Peter F.
Drucker
 Shannon’s Model of Communication Process
 This model breaks the communication process into 8.dicrete
components
 It is called as mother of all Communication Models
 COMMUNICATION PROCESS
COMPONENT EXPLANATION
1. Information Sender is the person who makes the message, chooses the channel
Source/Sender and sends the message.
2. Message The idea or thought needs to converted by the sender into verbal
and/or non verbal codes that can be understood by the Receiver

3. Transmitter/Encoder sender who uses machine, which converts message into signals or
binary data. It might also directly refer to the machine.

4. Signal It represents what flows from sender to Receiver through a channel

5. Channel/Medium Is the means which facilitates transmitting of messages. Formal or

Informal media.
6. Receiver (Decoder) person who gets the message or the place where the message must
reach. The receiver provides feedback according to the message. 

7. Destination Understanding of intended message only when both source and

destination share similar understanding of codes/signals
8. Noise the physical disturbances like environment, people, etc. which does
not let the message get to the receiver as what is sent. 
 COMMUNICATION PROCESS
Critical Appraisal of Shannon’s communication process
 It can be applied more for interpersonal communication than
group communication and mass communication.
 Receiver plays the passive part in the communication process
as sender plays the primary role that sends messages.
 Feedback is taken as less important in comparison to the
messages sent by the sender.
Advantages of Shannon Model
 Concept of noise helps in making the communication effective by
removing the noise or problem causing noise.
 This model takes communication as a two way process. It makes
the model applicable in general communication.
 Communication is taken as quantifiable in Shannon model.
 IMPORTANCE OF COMMUNICATION
1) Basis of Action : Right information from right source on time
necessary for the organizational performance.
2) Facilitates Planning : Helps in planning process by interaction
with various executives and secure their acceptance.
3) Helps in Decision making: Quality of information helps in
making right decisions for the organization well being
4) Means of coordination : It permits upward, downward and
horizontal interaction between different units and helps in
achievement of common objectives
5) Improves Relationships : It binds individuals to a common
purpose and helps in mutual understanding to prevent and solve
any conflicts and gaps.
6) Improves motivation and morale : Positive communication
influences and motivates people towards better performance and
provides a two way channel between employees and management.
 INTERPERSONAL COMMUNICATION

Interpersonal communication is the process by which people 
exchange information through verbal and  non-verbal messages that
 includes :
a. ability to listen and understand
b. problem solving
c. decision making
d. personal stress management 

IMPORTANCE OF INTERPERSONALCOMMUNICATION
1. Effective communication is very helpful in work place where we
 need to interact with different types of people.
2.It is important in maintaining good relationship within family and 
with friends.
3. Interpersonal communication skills are also known as life skills.
 BARRIERS TO EFFECTIVE COMMUNICATION
1) Semantic Barriers : Semantics is the study of meaning in
language. Words convey different meanings to different people.
Eg: Braces means for teeth and also cloth; crane has different
meanings.
2) Interpersonal Barriers :
i. Can’t express effectively vi. Perceptual differences
ii. Filtering vii. Jealousy
iii. Credibility viii. Information overload
iv. Inattention ix. Emotion
v. Time pressures
3. Structural Barriers :
v. Hierarchy
vi. Status
vii. Specialization
 Communication in Organizations

 Organizational communication is the process by which activities

of an organization are collected and coordinated to reach the
goals of both individuals and the organization”
 In simple terms it is the information flow that happens in an
organization but the flow of information has got a structure ,
direction and process.
 Types of business communication
1. Internal communication
2. External communication
Types of communication in an organization.

 Formal Communication :1.Chain of command 2.Written word

3.Representative system
 Informal Communication :1.Gossips 1.Grape vine talks 2.Chit
chats
 Communication in Organizations

The Structure and mode of organizational communication

• Horizontal / Lateral Communication :The exchanges between

and among agencies and personnel on the same level of the
organization chart.
• Vertical Communication :is of two types:
1.Upward Communication : the process whereby the ideas, feelings,
and perceptions of lower-level employee are communicated to
those at higher levels in the organization.
Functions
a) It provides management with needed information for decision
making
b) It helps employees relieve the pressures and frustrations of the
work
c) It enhances employees 'sense of participation in the enterprise.
 Communication in Organizations
2. Downward communication : It is initiated by the organization’s
upper management and then filters downward through the “chain
of command”.
• People are limited as to the amount of information they can
effectively absorb and react to.
• Therefore, management must, of necessity, restrict what it
communicates to subordinates.
• Organization implies some restriction of communication. Without
restrictions on communication, any organizational member could
be buried under loads of incoming messages from all the other
members.
• Diagonal Communication : This occurs when communication
occurs between workers in a different section of the organization
where one worker is on a higher level. • For example diagonal
communication will occur when a department manager converses
with an employee in another department. • It allows cross
communication between departments
 Using Communication skills to Manage Conflicts

 The dissimilarity in the ideas and opinions of individuals result in

a conflict. One needs to adjust with each other to some extent to
avoid conflicts and better relations.
 Communication has a big role to play in conflict management. It
has been observed that poor communication always results in
misunderstandings and eventually conflicts.
 Our communication has to be clear and precise to avoid conflicts.
First yourself be very clear what you intend to convey to the other
individual.
 The thoughts must be carefully put into sensible and relevant
words for the others to understand well.
 Never use words which might hurt the sentiments of others and
avoid using derogatory sentences. Don’t use too complicated
terminologies as the other person might not understand it well.
 Using Communication skills to Manage Conflicts

 Be very clear and straightforward what you expect from the

other person. Don’t always expect the other person to
understand everything on his own.
 Don’t merely depend on verbal communication, instead
prefer communication through email keeping each and every
member in the loop.
 Communication must not be done with members separately
but must be on a common platform so that every one gets
the same picture
 Never be loud and always be very careful about your pitch
and tone. Be polite and convincing. Be a good listener.
 Always learn to keep a control on your emotions and make
sure your communication is impressive and relevant for
effective conflict management.
 CONTROLLING
Basic control process
 The measurement and correction of performance to accomplish
organizational goals.
 There are three steps in Basic control process
 1. Establishment of standards
 2. Measurement of Performance
 3. Correction of deviation
Critical control points, Standards and Benchmarking
 Critical points helps managers to control large no. of subordinates
 increases span of management and cost savings and improves
communication
 principle of critical point control: is attention to factors critical to
evaluating performance against plans.
 Different types of critical point standards are 1.Physical 2. Cost 3.
Capital 4. Revenue 5. Program 6. Intangible
 CONTROLLING
Control as a Feedback system

 Real time Information and Control : Information about what is

happening while it is happening
 It is possible to obtain real time information using technology but
controlling any deviations requires time.
Feed forward control, Overall Controls, Preventive Controls

•Managers need for effective control a system that will inform them potential
problems, giving them time to take corrective actions before those problems
occur
• Feed forward systems monitor inputs into a process to ensure inputs are as
planned if not the inputs are changed to obtain desired results
• Feed forward is focused on the input system compared to focus on output
system in feedback system
Feed forward control, Overall Controls, Preventive Controls

Requirements for Feed forward Control

1. Make a thorough and careful analysis of the planning and control
system, and identify the more important input variables
2. Develop a model of the system
3. Take care to keep the model up to date; in other words, the model
should be reviewed regularly to see whether the input variables
identified and their interrelationships continue to represent realities
4. Collect data on input variables regularly, and put them into
the system
5. Regularly assess the variations of actual input data from planned
for inputs, and evaluate the impact on the expected end result
6. Take action
 CONTROL OF OVERALL PERFORMANCE
►As overall planning is applied to enterprise, in the same way
overall control is applied
►Decentralization of authority
►Measuring total efforts
►Financial controls have to be tailored to the specific needs
PROFIT AND LOSS CONTROL
►Profit and Loss controls are used in departments and divisions
where each has to make a profit
► It is a statement of all revenues and expenses of the results of
business operation.
► It is the responsibility of each department/division to contribute to
the profit so as to meet the organizational profitability targets.
►But high cost of accounting and paper transactions give rise to
limitations. Though computer technology has made things easier
CONTROL THROUGH ROI :
 ROI is the measure of success of the company by calculating the
ratio of earnings to investment of capital
 Profit is not absolute measure but as a return on capital employed
MANAGEMENT AUDITS :
 external and Internal audits focus on accounting standards and
check deviations found in the company and provide consultancy to
correct these deviations
BALANCED SCORE CARD
 It is used by business, Non profit organizations and governments to
align the activities with company vision and mission
 4.perspectives to achieve mission and vision of the company
1. Learning and growth
2. Internal business processes
3. satisfaction of the customer
4. financial perspective

 REQUIREMENTS FOR EFFECTIVE CONTROLS

► Tailoring Controls to Plans and Positions

► Tailoring Controls to Individual Managers
► Making Sure That Controls Point Up Exceptions at
Critical Points
► Seeking Objectivity of Controls
► Ensuring Flexibility of Controls
► Fitting the Control System to the Organization Culture
► Achieving Economy of Controls
► Establishing Controls that Lead to Corrective Action
 CONTROL TECHNIQUES
 Break-even Analysis
 Budgetary control : Establishment of different types of
budgets and compare the actual with standards and to take
corrective action
 Zero Based Budgeting :
 Non Budgetary control techniques
1. Time-Event Network Analysis 2. Gantt Charts
3. Milestone Budgeting
 Information Technology (MIS)
 Productivity Improvement Techniques
1. Inventory planning & Control (EOQ)
2. Just in time Inventory system(JITS)
3. Outsourcing
4. Operations Research
5. Value Engineering
6. Work simplification. 7. Quality Circles
 CONTROL TECHNIQUES
 Break-even Analysis: It is a method of studying the
interrelationships of cost, sales volume and profits.
 Budgetary control : Establishment of different types of
budgets and compare the actual with standards and to take
corrective action
 Zero Based Budgeting : The system of budgeting which
requires mangers to justify their budget requests based on
activity rather than the budgets established in previous years.
 Non Budgetary control techniques
1. Time-Event Network Analysis :
2. Gantt Charts
3. Milestone Budgeting
 Information Technology (MIS)

THANK YOU