Class 12 Commerce Business Studies - Controlling

What do you mean by Deviation?

Deviation refers to difference between actual performance and plan performance.

For example if plan is producing 100 units and actually only 80 units are produced, then deviation $$= 100 - 80 = 20$$.

What is compared with what in controlling?

Comparing Actual Performance with Standards in Controlling Process

This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired results

Very Short Answer Questions:
State the meaning of controlling.

Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Long Answer Question:
In management controlling activity requires certain steps to be followed. Explain the steps.

Steps in Controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Control standards are categorized as quantitative and qualitative standards. Quantitative standards are expressed in terms of money. Qualitative standards, on the other hand, includes intangible items.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Long Answer Question:
Explain the importance of controlling.

The six major purposes of controls are as follows:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.
Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.
Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.
Controls aid in decision making. The ultimate purpose of controls is to help managers make better decisions. Controls make managers aware of problems and give them information that is necessary for decision making.

Polycons Ltd. is a firm manufacturing paper bags in Odisha. It has employed female workers in the company and manufactures paper bags from recycle paper and there after sells them to various firms at economic rates.
Since last 1 month, its customers (firms) are reporting of complaints received from the users that these paper bags are unable to manage heavy weight and get torn easily.
Which function of management has been ignored above?
Discuss the steps to be undertaken in respect of the ignored function to pacify the situation.
State the value being followed by the company.

1. Controlling,
2. Taking corrective action,
3. Value of customer satisfaction.

One Mark Questions:
Name the function which reviews the operations in a business unit.

Controlling

Definition: Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

Explain the techniques of managerial control.

1. Traditional Techniques:

Traditional techniques refer to the techniques that have been used by the business organization for a longer period of time and are still in use.

Such techniques are:

a. Personal Observation

b. Statistical Reports.

c. Breakeven Analysis.

d. Budgetary Control.

(a) Personal Observation:

This is the most traditional technique of control. It helps a manager to collect first-hand information about the performance of the employees. It also creates psychological pressure on the employees to improve their performance as they are aware that they are being observed personally by the manager. However, this technique is not to be effectively used in all kinds of jobs as it is very time-consuming.

(b) Statistical Reports:

Statistical analysis in the form of percentages, ratios, averages etc. in different areas provides useful information regarding the performance of an organization to its managers. When such information is presented in the form of tables, graphs, charts etc., it facilitates comparison of performance with the standards laid and with previous years’ performance.

The technique used by managers to study the relationship between sales volume, costs and profit are known as Breakeven Analysis. This technique helps the managers in estimating profits at different levels of activities. The following figure shows the break-even chart of a firm.

Breakeven Point= Fixed Cost/ (Selling Price per unit- Variable cost per unit).

(d) Budgetary Control:

Under this technique, different budgets are prepared for different operations in an organization in advance. These budgets act as standards for comparing them with actual performance and taking necessary actions for attaining organizational goals.

Types of Budgets:

(i) Sales Budget:

Expected sales in terms of quantity as well as volume.

(ii) Production Budget:

Expected production in the budgeted period.

(iii) Material Budget:

Expected quantity and cost of material required for production.

(iv) Cash Budget:

Expected inflow and outflow of cash for the budgeted period.

(v) Capital Budget:

Estimated spending on fixed assets.

(vi) Research and Development Budget:

Expected spending on research and development work.

Advantages of Budgetary Control:

The following are the main advantages of budgetary control:

1. Helps in Coordination:

It helps in establishing coordination and interdependence among various departments. For example, purchase budget cannot be prepared without knowing the quantity of materials required and that information comes in from production budget. Latter in turn is based on sales budget.

2. Optimum Utilization of Resources:

Budgeting ensures fuller utilization of resources by allocating the resources according to the needs of various departments.

3. Motivating Employees:

Budgeting helps in motivating the employees to perform better as they know the standards against which their performance will be judged.

4. Helps in Attaining Targets:

Budgeting ensures the attainment of organizational goals by focusing on specific and time-bound targets.

5. Facilitates Management by Exception:

By stressing on the operations which deviate from budgeted standards, it facilitates management by the exception in the organization.

Limitations of Budgetary control:

Some of the defects of budgetary control are as follows:

1. Rigidity:

Budgets are often too rigid & restrictive and supervisors are given little freedom in managing their resources. The budgets may either be changed too often or not at all, making it difficult for employees to meet the performance level expected of them.

2. Lack of Action:

Only preparing budgets cannot lead to success unless & until these are not put into action. There is a need to translate these budget figures into results.

3. Time-consuming:

Preparing a different kind of budgets is not an easy thing as it involves a lot of time, money and efforts.

4. Estimate:

Generally, Budgets are prepared on the basis of the price level prevailing at a particular time period but these estimates may become useless during subsequent inflation or depression in the market.

2. Modern Techniques:

Modem techniques are those techniques which are very new in the management world. These techniques provide various new aspects for controlling the activities of an organization.

These techniques are as follows:

(a) Return on Investment.

(b) Ratio Analysis.

(d) Management Audit.

(e) PERT and CPM.

(f) Management Information System.

(a) Return on Investment:

Return on investment is a very useful technique for determining whether the capital invested in the business has been effectively used or not for generating a reasonable amount of return.

Return on Investment= (Net Income / Total Investment) X 100 Net Income before or after tax can be used for calculating ROI. Total investment includes investment in fixed Assets as well as working capital.

It acts as an effective control device in measuring and comparing the performance of different departments. It also helps departmental managers to find out the problems which adversely affect ROI.

(b) Ratio Analysis:

Ratio Analysis is a technique for analyzing the financial statements of a business firm by computing different ratios.

The most commonly used ratios have been grouped under the following categories:

(i) Liquidity Ratios:

Liquidity ratios are calculated to know the short-term financial position of the business and its ability to pay short-term liabilities. It includes the current ratio and quick ratio.

a. Current Ratio = Current Assets/Current Liabilities

b. Quick Ratio = Cash + Bills Receivable/Current Liabilities

(ii) Solvency Ratios:

Solvency ratios are calculated to know long term solvency of the business and its ability to pay its long term debts. It includes debt equity ratio, proprietary ratio, interest coverage ratio etc.

a. Debt Equity Ratio= Debt/Equity Share Holders Fund

b. Proprietary Ratio = Shareholders fund/Total Assets

(iii) Profitability Ratios:

Profitability ratios like gross profit ratio, net profit ratio, operating ratio, etc. help to analyze the profitability position of a business.

a. Gross Profit Ratio = Gross Profit/Net Sales × 100

b. Net Profit Ratio = Net Profit/Net Sales x 100

(iv) Turnover Ratios:

The various turnover ratios like Inventory turnover ratio, debtors turnover ratio, fixed assets turnover ratio etc. help in knowing whether the resources are effectively used for increasing the efficiency of operations of the business or not. Higher turnover indicates better utilization of resources.

a. Inventory Turnover Ratio = Cost of goods sold/Average Stock

b. Debtors Turnover Ratio = Net Credit Sales/Average Accounts Receivables

Under this system of accounting, various sections, departments or divisions of an organization are set up as ‘ Responsibility Centers’. Each center has a head who is responsible for attaining the target of his center.

The various responsibility centers are as follows:

(i) Cost Centre:

Cost center, also known as expense center, refers to a department of an organization whose manager is held responsible for the cost incurred in the center but not the revenues. For example, Production department of an organization may be classified as Cost Centre.

(ii) Revenue Centre:

A revenue center refers to a department which is responsible for generating revenues. For example, the marketing department.

(iii) Profit Centre:

A profit center refers to a department whose manager is responsible for both cost and revenues. For example, Repair and Maintenance department.

(iv) Investment Centre:

An investment center is responsible for profits as well as investments made in the form of assets. For judging the performance of the investment center, return on investment (ROI) is calculated and compared with similar data for previous years for one’s own center as well as other similar enterprises. It is also compared with current data of competing enterprises.

(d)Management Audit:

Management Audit is a process of judging the overall performance of the management of an organization. It aims at reviewing the efficiency and effectiveness of management and improving its future performance. Its basic purpose is to identify the deficiencies in the performance of management functions. It also ensures updating of existing managerial policies.

(e) PERT and CPM:

PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are two important techniques used in both planning and controlling. These techniques are used to compute the total expected time needed to complete a project & it can identify the bottleneck activities that have a critical effect on the project completion date. Such techniques are mainly used in areas like construction projects, aircraft manufacture, ship building etc.

(f) Management Information System (MIS):

Management Information System (MIS) is a computer based information system which provides accurate, timely and up-to-date information to the managers for taking various managerial decisions. Thus, it is an important communication tool as well as an important control technique. It provides timely information to the managers so that they can take appropriate corrective measures in case of deviations from standards.

A company 'M' Ltd. is manufacturing mobile phones both for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction. Also mobile market in India has grown tremendously and new player have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing. [NCERT]
(a) Identify the benefits the company will derive from a good control system.
(b) How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?
(c) Give the steps in the control process that the company should follow to remove the problems it is facing.

(a) Benefits of a good control system-

1. Helps in achieving organizational goals:

When the plans are made in the organization these are directed towards the achievement of the organizational goal and the controlling function ensures that all the activities in the organization take place according to plan and if there is any deviation, timely action is taken to bring back the activities on the path of planning.

2. Judging accuracy of standards:

Through strategic controlling we can easily judge whether the standard or target set is accurate or not. An accurate control system revises standards from time to time to match them with environmental changes.

3. Making efficient use of Resources:

Like traffic signal control guides the organization and keeps it on the right track. Each activity is performed according to predetermined standards. As a result, there is the most and effective use of resources.

4. Improving employee motivation:

An effective control system communicates the goals and standards of appraisal for employees to subordinates well in advance.

A good control system also guides employees to come out from their problems. This free communication and care motivate the employees to give better performance.

5. Ensures order and discipline:

Control creates an atmosphere of order and discipline in the organization. The effective controlling system keeps the subordinates under check and makes sure they perform their functions efficiently.

Sharp control can have a check over dishonesty and fraud of employees. Strict control monitor, employees work on a computer monitor which brings more order and discipline in the work environment.

6. Facilitate coordination in action:

Control helps to maintain equilibrium between means and ends. Controlling makes sure that proper direction is taken and that various factors are maintained properly. All the departments are controlled according to predetermined standards which are well coordinated with one another. Control provides unity of direction.

7. Controlling helps in improving the performance of the employees:

Controlling insists on a continuous check on the employees and control helps in creating an atmosphere other order and discipline. Under controlling function it is made sure that employees are aware of their duties and responsibilities very clearly.

(b) A company can relate its planning with control in this line the of business by the following measure by implementing an effective controlling system and following a controlling process.

Measurement of Actual Performance:

Once the standards have been determined, the next step is to measure the actual performance. The various techniques for measuring are sample checking, performance reports, personal observation etc. However, in order to facilitate easy comparison, the performance should be measured on the same basis that the standards have.

Comparing Actual Performance with Standards:

This step involves comparing the actual performance with standards laid down in order to find the deviations. For example, the performance of a salesman in terms of unit sold in a week can be easily measured against the standard output for the week.

.Analyzing Deviations:

Some deviations are possible in all the activities. However, the deviation in the important areas of business needs to be corrected more urgently as compared to deviation in insignificant areas. Management should use critical point control and management by exception in such areas.

One Mark Question:
Which function of management ensures that actual activities conform to planned activities?

Controlling

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management

Very Short Answer Questions:
How does control simplify the task of supervisor?

A supervisor acts as a link between management and operatives as he conveys management ideas to the workers, on one hand and workers’ problems to the management, on the other.

Give two examples of quantitative standards set up in controlling process.

Examples of Quantitative Standards:

(a) Revenue to be earned.

(b) Units to be produced and sold.

Three Marks Question:
"Planning and controlling are interrelated." Explain.

Planning and Controlling are inter-related within any organization. Planning sets the goals for the organization and controlling ensures its accomplishment. Planning decides the control process and controlling provides sound basis for planning. In simple words, planning and controlling are basically dependent on each other.

One Mark Question:
Standards are set in quantitative as well as in qualitative terms. Identify the type of standards when it is set in terms of Cost to be incurred'.

Standard costing- the preparation and use of standard costs, their comparison with actual cost and the analysis of variances to their causes and points of incidence

Five Marks Question:
Planning and Controlling are inseparable twins of management.

Planning and controlling are two separate fuctions of management, yet they are closely related. The scope of activities if both are overlapping to each other. Without the basis of planning, controlling activities becomes baseless and without controlling, planning becomes a meaningless exercise. In absense of controlling, no purpose can be served by. Therefore, planning and controlling reinforce each other. According to Billy Goetz, " Relationship between the two can be summarized in the following points

Planning preceeds controlling and controlling succeeds planning.
Planning and controlling are inseperable functions of management.
Activities are put on rails by planning and they are kept at right place through controlling.

Three Marks Question:
The last step in the process of controlling is 'taking corrective actions'.
Briefly explain the steps in chronological order that are taken in the process of controlling before this step.

Steps in the process of controlling before taking corrective actions.

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.

Three Marks Question:
Explain any four points of importance of controlling.

Importance of Controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.
Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.
Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Three Marks Question:
Explain the concept of 'Controlling'. Why is it said that controlling should not be misunderstood as the last function of management?

Controlling function should not be misunderstood as the last function of management. It is a function that brings back the management cycle back to the planning function. Thus, the controlling function act as a tool which helps in finding out that how actual performance deviates from standards and also finds the cause of deviations & attempts which are necessary to take corrective actions based upon the same.

Five Marks Question:
Explain briefly any five points which highlight the importance of controlling.

Importance of controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.

One Mark Question:
What should be done while 'taking corrective action' in the process of controlling when especially in the important areas deviations go beyond the acceptable range?

When deviation go beyond acceptable range in important areas, the matter has to get immediate attention of the management and corrective action must be taken on a priority basis.

Four Marks Question:
"There is a close and reciprocal relationship between planning and controlling."
Explain the statement.

Planning is looking ahead and controlling is looking back. This statement is partially true. Planning is a psychological process of ‘thinking and deciding in advance’ about ‘what is to be done’ and ‘how it is to be done’. It is a mental activity that includes deciding the goals and also the actions through which they are to be accomplished. Thus, it is said that planning is looking ahead as it involves predicting the future. Controlling on the other hand, involves an assessment of the past performance and evaluating them against the set standards. In this sense, controlling is said to be a backward looking function.

Five Marks Question:
"Planning and controlling are inseparable twins of management."
Explain.

Planning preceeds controlling and controlling succeeds planning.
Planning and controlling are inseperable functions of management.
Activities are put on rails by planning and they are kept at right place through controlling.

Six Marks Questions:
Kanu is appointed as a Factory Manager in a gel-pen manufacturing company. He was given a target of producing one lac gel pens per month. He knew that the 'essence of management is to achieve desired results' but he does not know "how to ensure that the work goes on according to plans."
Guide him by explaining the process so that he is able to achieve the desired results.

Management planning is the process of assessing an organization's goals and creating a realistic, detailed plan of action for meeting those goals. Much like writing a business plan, a management plan takes into consideration short- and long-term corporate strategies. The basic steps in the management planning process involve creating a road map that outlines each task the company must accomplish to meet its overall objectives.

Establish Goals

The first step of the management planning process is to identify specific company goals. This portion of the planning process should include a detailed overview of each goal, including the reason for its selection and the anticipated outcomes of goal-related projects. Where possible, objectives should be described in quantitative or qualitative terms. An example of a goal is to raise profits by 25 percent over a 12-month period.

Identify Resources

Each goal should have financial and human resources projections associated with its completion. For example, a management plan may identify how many sales people it will require and how much it will cost to meet the goal of increasing sales by 25 percent.

Establish Goal-Related Tasks

Each goal should have tasks or projects associated with its achievement. For example, if a goal is to raise profits by 25 percent, a manager will need to outline the tasks required to meet that objective. Examples of tasks might include increasing the sales staff or developing advanced sales training techniques

Prioritize Goals and Tasks

Prioritizing goals and tasks is about ordering objectives in terms of their importance. The tasks deemed most important will theoretically be approached and completed first. The prioritizing process may also reflect steps necessary in completing a task or achieving a goal. For example, if a goal is to increase sales by 25 percent and an associated task is to increase sales staff, the company will need to complete the steps toward achieving that objective in chronological order.

Create Assignments and Timelines

As the company prioritizes projects, it must establish timelines for completing associated tasks and assign individuals to complete them. This portion of the management planning process should consider the abilities of staff members and the time necessary to realistically complete assignments. For example, the sales manager in this scenario may be given monthly earning quotas to stay on track for the goal of increasing sales by 25 percent.

Establish Evaluation Methods

A management planning process should include a strategy for evaluating the progress toward goal completion throughout an established time period. One way to do this is through requesting a monthly progress report from department heads.

Identify Alternative Courses of Action

Even the best-laid plans can sometimes be thrown off track by unanticipated events. A management plan should include a contingency plan if certain aspects of the master plan prove to be unattainable. Alternative courses of action can be incorporated into each segment of the planning process, or for the plan in its entirety.

Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills. There are even a couple of tests to measure someone’s capability of planning well. As such, planning is a fundamental property of intelligent behavior.

Types of planning

• Automated planning and scheduling

• Business plan

• Comprehensive planning

• Contingency planning

• Economic planning

• Enterprise architecture planning

• Environmental planning

• Event planning and production

• Financial planning

• Marketing plan

• Network resource planning

• Operational planning

• Regional planning

• Site planning

• Strategic planning

• Succession planning

Five Marks Question:
Explain the various steps in the process of controlling.

Steps in the process of controlling:

Establishing standards: This means setting up the target which needs to be achieved to meet organizational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

A company was manufacturing 'LED bulbs' which were in great demand. It was found that the target of producing 300 bulbs a day was not met by the employees. On analysis, it was found that the workers of the company were not able to achieve the set targets and alternative arrangements were needed.
To meet the increased demand, the company assessed that approximately 88 additional workers were required out of which 8 would work as heads of different departments and 10 would work as subordinates were also enlisted. It was also decided that necessary relaxation should be given to encourage women, persons from backward and rural areas and persons with special abilities to assume responsible positions in the organisation. All efforts were made to match the ability of the applicants with the nature of work.
(i) Identify the functions of management discussed above.
(ii) State the two steps in the process of each function discussed in the above para.
(iii) List any two values which the company wants to communicate to the society.

i) organizing and staffing functions of management discussed above.

ii) Steps in organizing function-

a) identifying and dividing work

The organizing function begins with the division of total work into smaller units. Each unit of total work is called a job.

b) Assignment of Duties:

After dividing the organization into specialized departments each individual working in different departments is assigned a duty matching to his skill and qualifications. The work is assigned according to the ability of individuals. Employees are assigned duties by giving them a document called job description. This document clearly defines the contents and responsibilities related to the job.

steps in staffing function

a) Recruitment:

It refers to the process of inducing the people to apply for the job in the organization. After assessing the number and type of employee required, the manager tries that more and more people should apply for the job so that the organization can get more choice and select better candidates.

b) Estimating manpower requirement:

Staffing process begins with the estimation of manpower requirement which means finding out number and type of employees needed by the organization in near future. Manpower requirement is not only to find out the number of people needed but also the type of people

iii) women empowerment

high motivation

Five Marks Question:
State any five points that highlight the importance of 'controlling' function of management.

Importance of controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.

Trilok Ltd. was established with a total capitalisation of Rs. 25.80 crores. Company maintained a good balance between Debt and equity by. having a Debt-Equity ratio of almost 2 :It was established with a mission of generating employment - producing quality goods with fair prices.
It hired qualified and experienced staff even then, it organised training programmes to improve the skill level of employees. Managers at different levels were of the opinion that everything was organised very well, so subordinates can do everything at their own level. So they decentralised the authority till lowest level and restricted themselves to policy making. At the end of financial year results were shocking - Annual target of production of 5,00,000 units could not be achieved.
(i) Name the functions of management practised by managers.
(ii) Which management function was totally ignored by the managers at different leVels. What would be the benefits? Trilok Ltd. could get, by adopting this "MISSED FUNCTION".

(i) Planning

Organizing

Staffing

Controlling

(ii) Directing

Points that emphasize the benefits of directing in an organization are

1. Initiates Actions

2. Integrates Employees’ Efforts

3. Means of Motivation

4. Facilitates Changes

5. Balance in the Organisation

Shalu is a student of Class XI. She got 70% marks in Class $$X$$. Her brother motivated her to study well and try to get 100% marks to seek admission in SRCC. In first unit test, she got 78% Marks. She made a list of reasons for deviation of 22% she found that reasons were -
- Writing speed
- Lack of practice for different kind of questions, especially multi-unit questions.
She practiced more mock tests at home with time-check and searched for variety of questions on internet. In next unit test, she got 85% marks.
Again she made a list of such causes and improve upon and so on.
(i) Identify element of direction discussed in first paragraph.
(ii) By which function of management Shahs was trying to regulate her result.
(iii) Explain first three steps of the process of such management function.

(i) Motivation,-Her brother motivated her to study well and try to get 100% marks to seek admission in SRCC.

(ii) Controlling,-

(iii) Controlling is an important function of management which all the managers are required to perform. In order to contribute towards the achievement of organizational objectives, a manager is required to exercise effective control over the activities of his subordinates.

Making Efficient Use of Resources:

Controlling checks the working of employees at each and every stage of operations. Hence, it ensures effective and efficient use of all resources in an organisation with minimum wastage or spoilage.

4. Improving Employee Motivation:

Employees know the standards against which their performance will be judged.

Systematic evaluation of performance and consequent rewards in the form of increment, bonus, promotion etc. motivate the employees to put in their best efforts.

5. Ensuring Order and Discipline:

Controlling ensures a close check on the activities of the employees. Hence, it helps in reducing the dishonest behaviour of the employees and in creating order and discipline in an organization.

6. Facilitating Coordination in Action:

Controlling helps in providing a common direction to the all the activities of different departments and efforts of individuals for attaining the organizational objectives.

Production manager set the annual production target as - "Huge amount of Production". Superiors checked the workers at work regularly and they made the workers do their best by encouraging them.
At the end of the year, it was found that actual production was 1,65,000 units. General Manager was not satisfied with the performance as last year 1,90,000 units were produced. But Production Manager was of the opinion that they have achieved the target of "Huge production."
(i) What was missing in determining the production standards? Explain by highlighting qualifies of Good Standard.
(ii) Name two elements of direction mentioned in the paragraph.

(i) Standards should be determined in numbers.

Standards should be: Attainable, Measurable, Time bound
(ii) Supervision, Motivation

Five Marks Questions:
Explain any five points which highlight the importance of controlling function in management.

Importance of controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.

In Jagdama Ltd., all the activities were divided into seven department as Purchase, Marketing, Production, Personnel, Finance, Accounting and correspondence. General Manager Sh. Ram Niwas analysed and concluded that marketing, production and finance were the departments on which success of the business is dependent. Short comings in other departments, would not affect much the success of the business. He also decided deviation tolerance limits of these three main departments. If deviation goes beyond these tolerance limits, then only the same will be brought to the notice of Sh. Ram Niwas.
Identify functions of management referred in the above paragraph.
Describe the relevant concepts of identified function by quoting lines from the above paragraph.

Which element of Directing is related to controlling function?
Explain how both are related to each other?

Supervision:

It refers to monitor the progress of routine work of one’s subordinates and guiding them properly. Supervision is an important element of the directing function of management. Supervision has an important feature that face-to-face contact between the supervisor and his subordinate is a must.

.Controlling is an essential element of supervision. That, all supervisors perform supervisory functions in which controlling is one among the supervisory functions.

• It is the process that measures current performance and guides it towards some predetermined objectives

• It sees to it that the right things happen, in the right ways, and at the right time.

Explain the various steps in the process of controlling.

Controlling are the steps involved in the controlling process:

(i)Setting standards: Setting up of standards involves developing the benchmarks against which the actual performance is to be measured. The standards can be set both in qualitative and quantitative terms. Qualitative benchmarks can be in the forms of improving coordination in work,higher goodwill or increased motivation level of employees.For example,to improve the motivation level of employees,standards can be set in terms of the number of initiatives taken. Quantitative benchmarks can be in the form of sales targets, units to be produced or time to be spent on a particular action. For example,in a shirt factory,completing 10 pieces a day is a quantitative target. The standards that are set should be such that they facilitate easy comparison.

(ii) Comparing the performance: Performances, once measured, are compared with the set standards.Such a comparison helps in assessing the deviations in the work. Thereby, it guides the managers in taking the necessary steps to improve the performance, These comparisons are easier when they are in quantitative terms. For example, efficiency in work in terms of cost incurred can be measured against the standard cost. they are quantitative terms. For example,efficiency in work in terms of cost incurred can be measured against the standard cost.

(iv)Analysing Deviation: Every organisation faces deviations when comparing the actual performance with the pre-developed standards.Thus , it is important to find the deviations that are in the permissible range. It is said that deviations in key areas should be attended first. For analysing the deviations, the managers generally use Critical point control and management by exception.

Critical point control: An organisation cannot keep a check on all the activities of the management.Thus, this technique of controlling aims at focussing on only the key result areas (KRAs) that affect the entire organisation.For example,rise in input cost would be more important than rise in stationary cost.

Management by Exception: This technique of management is based on the belief that 'an attempt to control everything results in controlling nothing'. According to this, only the essential and significant deviations that are beyond the acceptable limits should be immediately brought to the notice of the management. On the other hand, a 2 percent rise in the cost can be ignored.

Once the deviations, are recognised, it is necessary to acknowledge their cause.There can be a number of elements causing deviation in work such as infeasible standards,deficiencies in process, under utilisation of resources and changes in business environment.Thus, it becomes important for the management to take into considerations the cause for the concerned deviations.

(v) Corrective measured: When deviations go beyond the admissible limits, there arises a need for the management to take corrective actions. This is the last step pf controlling which aims at correcting the deficiencies of the organisation so that the errors do not occur again. For example,if the production target was not met duly, appropriate corrective actions, such as training the workers or updating the machinery for working ,etc.can be taken.

Define revenue center.

A revenue centre is a segment of an organisation which is primarily responsible for generating revenue. For example, marketing department of an organisation may be classified as a revenue center.

Explain any five points which highlight the importance of controlling function of management.

Controlling is an important and an indispensable function of management. It aims at managing the managerial actions by setting standards and identifying the deviations of actual performance as against the set standards. It also ensures optimum utilisation of resources while taking corrective measures for the deviations. The following are the factors that highlight the importance of controlling.
i) Achieving Organisational Goals Controlling aims at accomplishment of the organisational goals by indicating the deficiencies and the corrective actions which are to be taken. It helps in moving in the right direction for attaining the set organisational objectives.
ii) Evaluating she Standards Controlling helps in judging the accuracy of the standards adopted by the management. A good controlling system enables the manager to check whether the set standards are accurate and feasible. It also helps the organisation to review and revise the standards according the changing business environment.
iii) Optimum Utilisation of Resources. A continuous control and monitoring helps in the efficient and optimum utilisation of resources. As each work is done according to the set standard, there is less wastage and spoilage of resources.
iv) Employee Motivation. By exercising effective control, employees get to know well in advance about what is expected from them and the standards against which their performance will be assessed. This motivates them to achieve the assigned targets in a better way.
v) Order and Discipline Efficient controlling helps in creating an atmosphere of order and discipline in the organisation. As the employees are aware of the fact hat they are being continuously observed, the dishonesty and inefficiency in behaviour is minimised.

Name the principle that a manager should consider while dealing with deviations effectively.

The principle that a manager should consider while dealing with deviations effectively is Management by Exception. It is a practice where only significant deviations from a budget or plan are brought to the attention of management. The idea behind it is that management's attention will be focused only on those areas in need of action.

Define investment center.

An investment centre is responsible not only for profits but also for investments made in the entre in the form of assets. The investment made in each centre is separately ascertained and return on investment is used as a basis for judging the performance of the centre.

State any one situation in which an organisations control system loses is effectiveness.

When the management is not able to set quantitative standards of performance, the organization's control systems are rendered ineffective. Pre-defined quantifiable standards/budgets are an indispensable part of the controlling process.

Define profit center.

A profit centre is a segment of an organisation whose manager is responsible for both revenues and costs. For example, repair and maintenance department of an organisation may be treated as a profit center if it is allowed to bill other production departments for the services provided to them.

Alpha Ltd. was manufacturing Auto spare parts. To improve the efficiency of employees the company provided training to their employees by inviting an expert who demonstrated the whole process of manufacturing. The expert quoted that all deviations cannot be controlled, so manager must know which deviation in key areas must be attended urgently as compared to deviation in non-key area. He also suggested that human beings are bound to brake mistakes as manager should not take strict action on every minute mistake of workers, rather he can fix a range of deviation and take action if deviation is above the specified large.
(a) Identify the functions of management referred above.
(b) Name the two ways of analyzing deviation mentioned above.
(c) Name the method of training used by the company.
(d) Identify the value being emphasized in above para.

(a) Staffing and controlling
(b) (i) Critical Point Control

(ii) Management by exception
(c) Apprenticeship method of Training
(d) Value of Humanity.

Define cost center.

A cost or expense centre is a segment of an organisation in which managers are held responsible for the cost incurred in the centre but not for the revenues. For example, in a manufacturing organisation, production department is classified as cost centre.

Define PERT and CPM.

PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are important network techniques useful in planning and controlling. These techniques are especially useful for planning, scheduling and implementing time bound projects involving performance of a variety of complex, diverse and interrelated activities. PERT and CPM are used extensively in areas like ship-building, construction projects, aircraft manufacture, etc.

What are the main objectives of controlling?

Controlling refers to the comparison between the actual performance and the planned performance so that corrective measures can be taken in case of any deviations or difference. The main objectives of controlling areas are:

1. Making efficient use of resources

2. Helps in achieving organisational objectives

3. Judging the accuracy of standards

4. Facilitate coordination in action.

State any five points that highlight the importance of controlling.

The following are the factors that highlight the importance of controlling.
i) Achieving Organisational Goals: Controlling aims at accomplishment of the organisational goals by indicating the deficiencies and the corrective actions which are to be taken.
ii) Evaluating the Standards: Controlling helps in judging the accuracy of the standards adopted by the management. A good controlling system enables the manager to check whether the set standards are accurate and feasible.
iii) Optimum Utilisation of Resources: A continuous control and monitoring helps in the efficient and optimum utilisation of resources. As each work is done according to the set standard, there is less wastage and spoilage of resources.
iv) Employee Motivation: By exercising effective control, employees get to know well in advance about what is expected from them and the standards against which their performance will be assessed.
v) Order and Discipline: Efficient controlling helps in creating an atmosphere of order and discipline in the organisation. As the employees are aware of the fact that they are being continuously observed, the dishonesty and inefficiency in behaviour is minimised.

Explain any four points of importance of the controlling function of management.

Controlling assures that organization's resources are utilized effectively and efficiently, controlling also assures that the activities of the organization are performed as per the plans.

Importance of Controlling functions are:

(1) Accomplishing Organizational goals: Controlling function measures progress towards organisational goals.

(2) Judging accuracy of standards: A good control system enables to set accurate standards.

(3) Making efficient use of resources : A manager seeks to reduce the wastage of the resources used by exercising controlling functions.

(4) Ensuring Order and Discipline: controlling function creates atmosphere of order and discipline in the organization, it also helps to keep close check on the activities of employees.

Who is a young person under Factory Act, 1948?

Under the Factory Act, 1948, "young person" means a person who is either a child or an adolescent.

The Act defines a child as a person who is below 15 years of age.

Adolescent means a person who is completed 15 years of age but below 18 years.

What is the difference between Strike and Lockout?

A strike, according to Section 2 (q) of the Industrial Disputes Act, is a cessation of work for any length of time under a common understanding to put pressure on an employer to accept their demands. Such a Strike can exist even though it is not part of an industrial dispute in the technical sense. A mere absence of workers from the factory or a concerted application for leave is not a strike. But absence from work even on a holiday with the intention of coercing the employer has been called a strike.
Lock-out, as the antithesis of strike, is temporary closure of a place

of business by the employer to bring pressure on his workmen to accept

his terms. Although an inartistic definition of lock-out in Section 2 (1) seems to give a colour of lock-out to any closure of a place of business, even one caused by flood or fire or earthquake.

A permanent discontinuance of business is not a lock-out, because a lock-out is a temporary closure of a place of business, not a termination of the business itself.

After a declaration of lock-out by an employer the workmen are not required to present themselves for work. Therefore, if a lock-out is held to be unjustified, all affected workmen are entitled to compensation.

What is Lay-off?

Lay-off is the discontinuation of employment and suspension of pay of any regular or probationary employee:

Due to lack of work
Lack of funds, or
Restructure of organization has resulted in a duplication of positions or functions, or otherwise made a position unnecessary.

Is Dismissal and Discharge one and same thing?

Dismissal and Discharge is often used interchangeably. Discharge is the separation on mutual understanding between employee & employer which is in line with the procedures of the organisation. Dismissal is however, temporary removal of the person form the organisation as a punishment for his doing. Dismissal may have legal proceedings but a discharge might not necessary have any punishment involved.

What is closure?

The term "closure" is defined under Section 2(cc) of the Industrial Disputes Act. It means the permanent closing down of a place of employment or part thereof.

What is Potential Appraisal? How does it measure?

The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a person. The person might or might not be aware of them. Potential appraisal is a future – oriented appraisal whose main objective is to identify and evaluate the potential of the employees to assume higher positions and responsibilities in the organizational hierarchy. Many organisations consider and use potential appraisal as a part of the performance appraisal processes. It helps to identify what can happen in future so that it can be guided and directed towards the achievement of individual and organizational growth and goals.

It can be measured through:

Self – appraisals
Peer appraisals
Superior appraisals
MBO (Management By Objectives)
Psychological and psychometric tests
Management games like role playing
Leadership exercises

Is Complaint and Grievance one and same thing?

Grievance and complaints are not the same thing. Grievance means a negative feeling of having been treated unfairly or in an unjust way. Whereas, complaint is an expression of a grievance. It may or may not request action.

What is 360 Degree Appraisal? Does it work?

360 degree appraisal is a powerful multi-dimensional competence development tool that draws upon the knowledge of an individual within his own circle of influence: supervisors, peers, and direct reports.

Professionally managed, 360 degree feedback increases individual self-awareness, and as part of a strategic organizational process it can promote:

Increased understanding of the behaviors required to improve both individual and organizational effectiveness.
More focused development activities, built around the skills and competencies required for successful organizational performance.
Increased involvement of people at all levels of the organization.
Increased individual ownership for self-development and learning.
Increased familiarity with the implications of cultural or strategic change.

What is Grievance? Why someone Is suspended from employment and what subsistence allowance one get at the time of suspension?

A grievance refers to any form of dissatisfaction which is caused in the workplace. This dissatisfaction must be aroused out of employment and not due to personal reasons.

When an employee does not abide by the rules of the organisation and/or engage himself in any unethical work is suspended by the employer.

Suspension means prohibiting an employee from attending work, preventing him from discharging the duty assigned to him and withholding the wages payable to him. It is temporary discharge from service and not a termination. The employer is obliged to pay a subsistence allowance of 50% of basic salary + D.A. to the employee suspended for a period of 90 days.

If the enquiry goes beyond 90 days, the allowance is increased to three fourths of the employees' normal emoluments.

What are the Judgment errors that may cause hindrance in appraisal? Judgment errors

Performance appraisal is the systematic observation and evaluation of employees’ performance. Some of the most commonly used performance appraisal methods include the judgmental approach, the absolute standards approach, and the results-oriented approach. In the judgmental approach a manager or performance appraiser is asked to compare an employee with other employees and rate the person on a number of traits or behavioral dimensions. These appraisal systems are based on the exercise of judgment by the superior. Four widely used judgmental approaches are graphic rating scales, ranking, paired comparison, and forced distribution. In conducting performance appraisals, managers must be careful to avoid making rating errors. Four of the more common rating errors are strictness or leniency, central tendency, halo effect, and recency of events.

Answer the following question:
State the importance of controlling.

It is concerned with seeing whether the performance is according to the standards or not. Controlling is the managerial functions of planning, staffing, organizing, implementing and directing. It helps to check the errors and take the corrective action, so it is known as an important function of management.

Controlling is the function that brings the management cycle full cycle. It is the steering mechanism that links all the preceding functions of organizing, staffing, and directing to the goals of planning “ Betel- 1989) The planning process determents the objectives that eventually become the foundation for controls.

1158222_978870_ans_49a31b5933934d1d80703f35ec474320.jpg

Which two steps in the process of control are concerned with compelling events to confirm to plan?

Measurement of Actual Performance:

Taking corrective action-

The final step in the control process is determining the need for corrective action. Managers can choose among three courses of action:

A)They can do nothing

B)They can correct the actual performance, or

C)They can revise the standard

Maintaining the status quo if preferable when performance essentially matches the standards. When standards are not met, managers must carefully assess the reasons why and take corrective action. Moreover, the need to check standards periodically to ensure that the standards and the associated performance measures are still relevant for the future.

Define 'Controlling'. Explain its importance.

Management control can be defined as a systematic effort by business management to compare performance to predetermined standards, plans, or objectives in order to determine whether performance is in line with these standards and presumably in order to take any remedial action required to see that human and other.

Controlling is an important function of management. Its importance becomes apparent when we find that it is needed in all the functions of management.

Controlling checks mistakes and tells us how new challenges can be met or faced. The success of the organisation thus hinges on the effective controlling.

A.R. Rehman is the first'Indian to win the oscar award for his composition 'jai Ho". His composition of music is unique and different as he has used the singing notes in a manner that is entirely his own interpretation. Like A.R. Rehman, Nandan, a general manager in Expert Sales Ltd. uses his knowledge of management in a unique, and different manner and all the employees working under his guidance are happy and satisfied. He rewards the employee who came to office in time.
(a) Identify the nature of management highlighted above. Give reason.
(b) Which Principle of Management is reflected by Nandan's behaviour?
(c) Which value does Nandan want to inculcate in his employees?

a) Nature of management - Mangement is an art- Nandan as a general manager of sales uses his knowledge of management in a unique and different manner which is related to art as it uses all theoretical knowledge into a p[ractical situation

b) i) Management as science ii) Management as a profession.

c) Discipline /punctuality - By rewarding the employees.

Is controlling backward looking?

Controlling as an essential part of management is forward as well as backward looking. It is a backward looking function in the sense that it assesses the work done and analyses deviations from the set standards. Based on these deviations it attempts to take the required corrective measures. Thus, it guides the future course of action and aims at improving the future performance. In this sense, it is also a forward looking function. Hence, we can say that controlling is forward as well as backward looking function.

Why is planning an empty exercise without controlling?

Planning and controlling are inseparable twins of management. A system of control presupposes the existence of certain standards. These standards of performance which serve as the basis of controlling are provided by planning. Once a plan becomes operational, controlling is necessary to monitor the progress, measure it, discover deviations and initiate corrective measures to ensure that events conform to plans. Thus, planning without controlling is meaningless. Similarly, controlling is blind without planning. If the standards are not set in advance, managers have nothing to control. When there is no plan, there is no basis of controlling.

Prakash Jha wishes to fix-standard production for worker along with standard time to complete the job. Under which function of management, standards are fixed?

Controlling

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Explain to a newly appointed foreman under whose supervision, school bags are being made. How has he to carry out the process of control?

The newly appointed foreman must use following steps to conduct the control process:

(i) Establishment of standards

(ii) Measurement of performance

(iii) Comparison of actual performance withstands

(iv) Analysing deviations

(v) Taking corrective actions.

Mr. Ankit is the chief manager in a well-known MNC, producing shoes. He called the production manager of his unit and told him to keep a constant watch on all the activities of his respective unit so that there is no possibility of adverse results. As long as the company runs its operation employees at all levels will adopt it to achieve results.
Identify the function of management referred above.
Describe its three features quoting lines from the para.

Controlling.

Controlling is an important function of management which all the managers are required to perform. In order to contribute towards achievement of organisational objectives, a manager is required to exercise effective control over the activities of his subordinates.

Features of Controlling:

1. Accomplishing Organisational Goals:Controlling helps in comparing the actual performance with the predetermined standards, finding out deviation and taking corrective measures to ensure that the activities are performed according to plans. Thus, it helps in achieving organisational goals.

2. Judging Accuracy of Standards:An efficient control system helps in judging the accuracy of standards. It further helps in reviewing & revising the standards according to the changes in the organisation and the environment.

3. Making Efficient Use of Resources:Controlling checks the working of employees at each and every stage of operations. Hence, it ensures effective and efficient use of all resources in an organisation with minimum wastage or spoilage.

Give two examples of qualitative standards set up in controlling process.

Examples of Qualitative Standards:

(a) Improving motivation level of employees.

(b) Improving labour relations.

(d) Improving goodwill etc.

How does controlling simplify the task of supervisor?

The task of supervisor is to supervise, observe or watch the subordinates when they are performing the job to ensure that they follow the plans and perform efficiently.

Controlling involves verifying whether activities undertaken are in conformity with the plans adopted and if there is any deviation then corrective measures are suggested to bring conformity in actual performance and plans in future. Controlling function ensures that everything in organisation goes according to plan and this is what supervisor also aims at, that is why, it is correct to say that controlling reduces the work load of supervisors.

Jindal Ltd. could not achieve the target production of 15,000 cars p.a. It could produce only 14,125 cars- While analysing the reasons for deviations, it was found that workers were not efficient. Training programmes were organised and next year, company was able to produce 15,000 units. Production Manager is of the opinion that with this, management ends at controlling. Do you agree? Give reason to support your answer.

Controlling is not the end of management. This is because after controlling management need to perform planning function.

'Tricorn Ltd' a computer hardware manufacturing company imported a new machinery for manufacturing latest technology based computer systems. The human resource manager determined that for operating the new machines, the company required the necessary workers through placement agency.
After 3 months, it was reported by the production manager that the workers were not able to meet the target production. The General Manager got annoyed and ordered inquiry for the same. It was reported that the newly recruited workers possessed the necessary skills and abilities but lacked the willingness to do work.
(i) Name the functions of management involved above.
(ii) Name the relevant concept of functions identified in (i).
(iii) Which concept of management will help the company in meeting the target production?

(i)- Directing, controlling, staffing

(ii)- recruitment, controlling function

a)- comparing actual performance

b)- analyzing deviations

(iii)-Motivation is a concept of management will help the company in meeting the target production.

How does controlling help in "Judging accuracy of standards" and "Ensuring order and discipline."

Judging Accuracy of Standards:

An efficient control system helps in judging the accuracy of standards. It further helps in reviewing & revising the standards according to the changes in the organisation and the environment.

Ensuring Order and Discipline:

Controlling ensures a close check on the activities of the employees. Hence, it helps in reducing the dishonest behaviour of the employees and in creating order and discipline in an organization.

"There is close and reciprocal relationship between planning and controlling'. Explain the statement through an example.

What is feedback in controlling?

Feedback refers to communication regarding the reasons for the mismatch between actual and plan output and corrective actions.

A management system that regularly examines the process it is in charge of in order to make changes that will improve its output efficiency. Many business operations that include modern manufacturing facilities have implemented feedback control systems to monitor and fine tune the production process.

Explain the various steps involved in the process of control.

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Explain the meaning of controlling.

Thus, controlling can be defined as a managerial function to ensure that activities in an organisation are performed according to the plans. Controlling also ensures efficient and effective use of organisational resources for achieving the goals. Hence, it is a goal oriented function.

What do you mean by key result area in the context of controlling?

Key areas are those which have impact on whole organisation. For example, if there is increase in production cost by Rs 5, per unit and there is increase in postal cost by Rs 20, then more focus should be to find out reasons for increase in cost of production as it will affect the profit and future revenue of organisation whereas postal cost is incurred rarely and managers have no control over postal cost.

Engineer India Ltd. is engaged in manufacturing machine components the target production is 300 units per day. The company had been successfully attaining the target three months ago. Over the last three months it has been observed that daily production varies between 220 and 250 units. Identify the management function to rectify the above situation. Briefly state the procedure of this function.

4 Steps of Control Process are:

Establishing standards and methods for measuring performance.
Measuring the performance.
Determining whether performance matches the standard.
Taking corrective action.

You are a manager in a car manufacturing company. It is reported that postal expenses have increased by 10% and cost of raw material is increased by 2% which of the two deviations is more critical to you? It is related to which concept of controlling? Explain it.

Increase in cost of raw material by 2% is more critical.

The concept of controlling- the critical point of control.

The specific point, procedure, or step in food manufacturing at which control can be exercised to reduce, eliminate, or prevent the possibility of a food safety hazard.

Explain the importance of controlling in an organisation.

Importance of controlling:

(1) Accomplishing Organisational Goals:The controlling process is implemented to take care of the plans. With the help of controlling, deviations are immediately detected and corrective action is taken. Therefore, the difference between the expected results and the actual results is reduced to the minimum. In this way, controlling is helpful in achieving the goals of the organisation.

(2) Judging Accuracy of Standards:While performing the function of controlling, a manager compares the actual work performance with the standards. He tries to find out whether the laid down standards are not more or less than the general standards. In case of need, they are redefined.

(3) Making Efficient Use of Resources:Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured that no employee deliberately delays his work performance. In the same way, wastage in all the physical resources is checked.

(4)Ensuring Order and Discipline:Controlling ensures order and discipline. With its implementation, all the undesirable activities like theft, corruption, delay in work and uncooperative attitude are checked.

Name and explain the first three steps of the function of management shown in the picture.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

'An effort to control everything may end up in controlling nothing.' Explain.

Trying to control everything may end up in controlling nothing. Managers cannot control every organisational activity. This is neither desirable nor possible within the frame of time, money and resource constraints.

If actual performance conforms to planned performance, the matter need not be brought to the notice of top managers. Even when the deviation is not significant (when it is within the range of control), the matter may not be reported to top managers.

$$ABC$$ Ltd. is manufacturing auto spare parts on large scale. The company policy is that $$3\%$$ of the daily production could be defective. Over last two months it is observed that about $$10-12\%$$ of production is defective.Which function of management is required to correct the above case?
State the procedure to be followed to correct the things.

The management function required to correct the above case is "controlling". The procedure to be followed is:
1. Find out the cause of deviation of defective percentage from 3 to 12.
2. Take corrective measures to control the thing.
Following can be the cause of deviation:

Sr. No.	Causes	Corrective Action
1.	Lack of motivation of workers.	Offer financial or non-financial incentives to motivate workers.
2.	Power breakdown.	Install a generator.
3.	Fault in machinery.	Get the machinery repaired or replace the machinery with new one.

Very Short Answer Questions:
"Controlling is forward looking activity". Discuss.

Control is forward looking:

Whatever has happened has happened, and the manager can take corrective action only of the future operations. Past is relevant to suggest what has gone wrong and how to correct the future.

Very Short Answer Questions:
What is feedback in controlling?

Feedback in Controlling:

The controlling function does not end by taking corrective action as it is a continuous process. After suggesting the corrective measure a feedback report is prepared. Feedback refers to list of reasons for deviations of plans or for inefficiency in overall working of organisation; along with reasons the corrective measures are also specified in the feedback report and feedback acts as a base to establish the standard for next year and controlling process again starts from 1st step.

Very Short Answer Questions:
State the objectives of controlling.

The six major purposes of controls are as follows:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.
Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.
Controls provide feedback on project status. Not only do they measure progress, but controls also provide feedback to participants as well. Feedback influences behavior and is an essential ingredient in the control process.
Controls aid in decision making. The ultimate purpose of controls is to help managers make better decisions. Controls make managers aware of problems and give them information that is necessary for decision making.

Short Answer Questions:
'An ideal control technique is the one that checks every bit of performance". Comment.

This statement is not true. An ideal control system should concentrate on key aspects of performance. There are several activities to be controlled. In practice, it is not possible for management to control each and every activity due to limited time. Moreover, minor deviations from plans and targets are insignificant for success. Therefore, an attempt to control everything is likely to be a futile exercise. Control system should focus attention on exceptional and key factors only. This will help to save time, efforts and money.

How is controlling related to planning?

Control is closely linked with Planning

Planning and controlling are closely linked. The two are rightly called as ‘Siamese twins’ of management. “Every objective, every goal, every policy, every procedure and every budget become standard against which actual performance is compared.

Planning sets the ship’s course and controlling keeps it on course. When the ship begins to veer off the course, the navigator notices it and recommends a new heading designed to return the ship to its proper course. Once control process is over its findings are integrated into planning to prescribe new standards for control.

Very Short Answer Question:
'Planning provides basis of control'. Explain briefly.

Long Answer Type Questions:
Discuss the relationship between planning and controlling.

Very Short Answer Questions:
'Controlling is continuous activity in an organisation'. Explain.

Control is a Continuous Process:

Controlling is not the last function of management but it is a continuous process. Control is not a one-time activity, but a continuous process. The process of setting the standards needs constant analysis and revision depending upon external forces, plans, and internal performance.

Short Answer Question:
'Planning is an empty exercise without controlling'. Explain the statement through an example.

Control is closely linked with Planning:

Very Short Answer Questions:
'Controlling means taking action'. Explain.

Taking corrective measures:

On comparing the actual performance with the planned performance, the manager will come to know about the deviations between the plan and actual performance. Then the next step is to know the reasons for such deviations and trying to remove deviations in future. The manager takes measures to bring back everything on the track, i.e., according to plan.

Long Answer Question:
Explain the relation between planning and controlling.

Long Answer Question.
"A manager who tries to control everything may end up controlling nothing". Describe this statement with suitable example.

‘Management by Exception’:

Long Answer Question.
Explain the importance of controlling process.

Importance of Control:

1. Guides the Management in Achieving Pre-determined Goals:The continuous flow of information about projects keeps the long range of planning on the right track. It helps in taking corrective actions in future if the performance is not up to the mark.

2. Ensures Effective Use of Scarce and Valuable Resources:The control system helps in improving organizational efficiency. Various control devices act as motivators to managers. The performance of every person is regularly monitored and any deficiency if present is corrected at the earliest.

3. Facilitates Coordination:Control helps in coordination of activities through unity of action. Every manager will try to coordinate the activities of his subordinates in order to achieve departmental goals.

4. Leads to Delegation and Decentralization of Authority:A decision about follow-up action is also facilitated. Control makes delegation easier/better. Decentralization of authority is necessary in big enterprises. The management cannot delegate authority without ensuring proper control.

5. Spares Top Management to Concentrate on Policy Making:For control processes management’s attention is not required every now and then. The management by exception enables top management to concentrate on policy formulation.

Long Answer Question:
What is meant by controlling? Explain any three points of importance of controlling.

Impottance of Controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.
Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Long Answer Question:
Explain the various steps involved in a controlling process.

Steps in Controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Long Answer Question:
Describe in detail the relation between controlling and planning.

Long Answer Question:
"Comparing the actual performance with the laid standards, finding out the deviations and taking corrective action is an important process of a function of management". Name this function and explain the process.

This is the controlling function in an organisation.

The steps in controlling are:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Long Answer Question:
What is meant by controlling? Explain any three steps in the process of control.

Steps in Controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Explain the meaning of strategic control and operational dimensions of control.

Strategic control focuses on the dual questions of whether:

(1) the strategy is being implemented as planned; and

(2) the results produced by the strategy are those intended.

”Strategic control is “the critical evaluation of plans, activities, and results, thereby providing information for the future action”. There are four types of strategic control: premise control, implementation control, strategic surveillance and special alert control.

Operational control systems are designed to ensure that day-to-day actions are consistent with established plans and objectives. It focuses on events in a recent period. Operational control systems are derived from the requirements of the management control system. Corrective action is taken where performance does not meet standards. This action may involve training, motivation, leadership, discipline, or termination.

Long Answer Question:
Develop a controlling process for a bag manufacturing company.

1427942_1043451_ans_010ad30bee304e258eecaecbe7fbf790.png

One Mark Question:
What should be the 'focus point for a manager while controlling, as controlling at each and every step is not possible?

Focus on Key Result Areas (KRAs), which are critical to the success of an organisation.

Three Marks Question:
Explain why it is said that controlling is a forward looking as well as backward looking function.

Why it is said that "controlling is a continuous activity"?

Control is a Continuous Process:

Three Marks Question:
"Controlling is looking back." Explain.

Controlling is looking back as it is like a post-mortem of past activities to find out deviations from the standards established. In fact, the objective of controlling is to check the factors responsible for poor performance in the past, so that such mistakes are not repeated in future and the organisation can achieve its predetermined objectives.

One Mark Question:
State why is actual performance compared with standards in the process of controlling.

Compare Performance with the Standards:

This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards.

Typically, performance reports simplify such comparison by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variance—that is, the difference between each actual amount and the associated standard.

The manager must know of the standard permitted variation (both positive and negative). Management by exception is most appropriate and practical to keep insignificant deviations away. Timetable for the comparison depends upon many factors including importance and complexity attached with importance and complexity.

Three Marks Questions:
'Explain how 'Critical Point Control' helps in controlling process.

(i) Critical point control:

It means keeping focus on some key areas (KRAs) and if there is any deviation in these key areas, and then it must be attended urgently. Key areas are those which have impact on whole organisation. For example, if there is increase in production cost by Rs 5, per unit and there is increase in postal cost by Rs 20, then more focus should be to find out reasons for increase in cost of production as it will affect the profit and future revenue of organisation whereas postal cost is incurred rarely and managers have no control over postal cost.

Three Marks Question:
After setting the performance standards the next step in the controlling process is the 'measurement of actual performance'. Explain this step in the process of controlling.

Compare Actual Performance:

Three Marks Questions:
Explain how controlling helps in:
(i) Making efficient use of resources; and
(ii) Improving employees' motivation.

1. Making Efficient Use of Resources:

Controlling checks the working of employees at each and every stage of operations. Hence, it ensures effective and efficient use of all resources in an organisation with minimum wastage or spoilage.

2. Improving Employee Motivation:

Employees know the standards against which their performance will be judged.

Systematic evaluation of performance and consequent rewards in the form of increment, bonus, promotion etc. motivate the employees to put in their best efforts.

Long Answer Question:
Controlling helps in financial matters and maintaining and improving quality. Explain this statement in brief.

Controlling helps in financial matters and maintaining and improving quality.

Controlling maintains the finances and expenses within a limit of a firm by making budgets and analyzing financial statement. Controlling keeps a check on the production and maintains the standards as per customers demand. Hence, it can be said that Controlling helps in financial matter and maintaining and improving quality.

Three Marks Questions:
Explain how controlling helps in:
(i) accomplishing organisational goals; and
(ii) judging accuracy of standards.

1. Accomplishing Organisational Goals:

Controlling helps in comparing the actual performance with the predetermined standards, finding out deviation and taking corrective measures to ensure that the activities are performed according to plans. Thus, it helps in achieving organisational goals.

2. Judging Accuracy of Standards:

An efficient control system helps in judging the accuracy of standards. It further helps in reviewing & revising the standards according to the changes in the organisation and the environment.

Six Marks Question:
Explain the various steps in the process of controlling.

Steps in the process of controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Three Marks Question:
Explain 'Setting Performance Standards' as a step of controlling process.

Establish the Standards:

Within an organization’s overall strategic plan, managers define goals for organizational departments in specific, precise, operational terms that include standards of performance to compare with organizational activities. However, for some of the activities the standards cannot be specific and precise.

Standards, against which actual performance will be compared, may be derived from past experience, statistical methods and benchmarking (based upon best industry practices). As far as possible, the standards are developed bilaterally rather than top management deciding unilaterally, keeping in view the organization’s goals.

Three Marks Question:
Explain 'Taking corrective action' as a step of controlling process.

When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centered environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step— corrective action.

The corrective action may be to maintain status quo (reinforcing successes), correcting the deviation, or changing standards. The most effective course may be prescribed by policies or may be best left up to employees’ judgment and initiative. The corrective action may be immediate or basic (modifying the standards themselves).

Three Marks Question:
Explain why it is said that 'Planning' and 'Controlling' are inseparable twins of management.

Five Marks Question:
Describe briefly the relationship between controlling and planning.

Six Marks Question:
What is meant by 'Controlling'? Describe the steps in the process of controlling.

Steps in the process of controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Six Marks Question:
Explain any four points that highlight the importance of controlling.

Importance of Controlling:

Controls make plans effective. Managers need to measure progress, offer feedback, and direct their teams if they want to succeed.
Controls make sure that organizational activities are consistent. Policies and procedures help ensure that efforts are integrated.

Controls make organizations effective. Organizations need controls in place if they want to achieve and accomplish their objectives.

Controls make organizations efficient. Efficiency probably depends more on controls than any other management function.

Four Marks Question:
"Controlling is a systematic process involving a series of steps."
State the steps involved in the process.

Steps involved in controlling:

Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Three Marks Question:
Explain 'Measurement of actual Performance' as a step of controlling process.

Compare Performance with the Standards:

Five Marks Question:
Describe briefly the steps in the process of controlling.

Steps in Controlling:

Establishing standards: This means setting up the target which needs to be achieved to meet organizational goals eventually. Standards indicate the criteria of performance.

Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Answer the following question in a sentence or a word.
What is positive variation in controlling?

All natural processes are affected by intrinsic variation. In nature, no matter how hard we try, there can never be two identical actions that generate exactly the same result.

This simple statement contains a deeper truth that is connected with change and entropy (a measure of disorder in the environment).

Change is a constant in nature that is not only necessary but literally vital. There would be no life without change.

How does this intrinsic characteristic of nature affect the activities of an organization?

By definition, an organization (system) is a set of interdependent individuals and activities that work together to achieve a well-defined goal.

Each of the activities that make up the organization and every individual are affected by variation, and this variation influences the possibility of achieving the goal.

Answer the following question in $$15$$ to $$20$$ sentences.
Explain the importance of controlling.

The importance of controlling becomes clear from the following facts:

(1) Accomplishing Organisational Goals:

The controlling process is implemented to take care of the plans. With the help of controlling, deviations are immediately detected and corrective action is taken. Therefore, the difference between the expected results and the actual results is reduced to the minimum. In this way, controlling is helpful in achieving the goals of the organisation.

(2) Judging Accuracy of Standards:

While performing the function of controlling, a manager compares the actual work performance with the standards. He tries to find out whether the laid down standards are not more or less than the general standards. In case of need, they are redefined.

(3) Making Efficient Use of Resources:

Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured that no employee deliberately delays his work performance. In the same way, wastage in all the physical resources is checked.

(4) Improving Employee Motivation:

Through the medium of controlling, an effort is made to motivate the employees. The implementation of controlling makes all the employees to work with complete dedication because they know that their work performance will be evaluated and if the progress report is satisfactory, they will have their identity established in the organisation.

(5) Ensuring Order and Discipline:

Controlling ensures order and discipline. With its implementation, all the undesirable activities like theft, corruption, delay in work and uncooperative attitude are checked.

(6) Facilitating Coordination in Action:

Coordination among all the departments of the organisation is necessary in order to achieve the organisational objectives successfully. All the departments of the organisation are interdependent. For example, the supply of orders by the sales department depends on the production of goods by the production department.

Through the medium of controlling an effort is made to find out whether the production is being carried out in accordance with the orders received. If not, the causes of deviation are found out and corrective action is initiated and hence, coordination between both the departments is established.

Answer the following question in $$15$$ to $$20$$ sentences.
Briefly explain the controlling process.

Process of Controlling

Control process involves the following steps as shown in the figure:

1. Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

2. Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.

3. Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.

4. Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to the standard plan. An effective control system enables managers to avoid circumstances which cause the company’s loss.

Answer the following question in a sentence or a word.
What do you mean by controlling?

Controlling is one of the important functions of a manager. In order to seek planned results from the subordinates, a manager needs to exercise effective control over the activities of the subordinates. In other words, the meaning of controlling function can be defined as ensuring that activities in an organization are performed as per the plans. Controlling also ensures that an organization’s resources are being used effectively & efficiently for the achievement of predetermined goals.

Answer the following question in $$2$$ or $$3$$ sentences.
Mention any two steps in controlling process.

Controlling Process consists of following systematic steps:
1.Setting Performance Standards :
The first step in the process of controlling is concerned with setting performance standards. These standards are the basis for measuring the actual performance.
Thus, standards act as a lighthouse that warns & guides the ships at sea. Standards are the benchmarks towards which efforts of entire organisation are directed. These standards can be expressed both in quantitative and qualitative terms.
Examples of Quantitative Standards:
(a) Revenue to be earned.
(b) Units to be produced and sold.
(c) Cost to be incurred.
(d) Time to be spent in performing a task.
(e) Amount of inventories to be maintained
Examples of Qualitative Standards:

(a) Improving motivation level of employees.
(b) Improving labour relations.
(c) Improving quality of products.
(d) Improving goodwill etc.
For example, for improving customer satisfaction in a restaurant having self service, standard can be set in terms of time taken to get a table, place the order and collect the order. Moreover, the standards set should be flexible enough so that necessary changes can be made according to varying situations.
2.Measurement of Actual Performance:

Once the standards have been determined, the next step is to measure the actual performance. The various techniques for measuring are sample checking, performance reports, personal observation etc. However, in order to facilitate easy comparison, the performance should be measured on same basis that the standards have.
Following are some of the ways for measuring performance

(a) Superior prepares a report regarding the performance of an employee.
(b) Various ratios like gross profit ratio, debtor turnover ratio, return on investment, current ratio etc. are calculated at periodic intervals to measure company’s performance.
(c) Progress made in areas like marketing can be measured by considering the number of units, increase in market share etc.

Directors of Panorama Ltd. gave complete freedom to departmental heads to frame departmental policies and get the work done. But departmental heads neither consulted each other nor did they take guidance and final approval from Managing Director. They framed individual isolated policies and did not check timely the problems. At the end of the year, they faced huge departmental losses.
Which leadership style was adopted by Director?
Which functions of management were performed poorly?
Identify the values not followed by departmental heads.

1. The leadership style adopted by the director was free-rein leadership.

2. Direction and Controlling are very badly performed.

3. The values that are not followed by departmental heads are:
(a) lack of communication;

(b) framing of isolated policies.

During April, Mrs. Recta took a class test of 25 marks from the topic "Law of Demand" in Economics. Out of 33 students in class, 09 got less than 10 marks. To improve the performance of their 09 students, she re-taught the topic and conducted slip-tests. Their performance improved but still it was less than 10 marks. She designed MCQ's and tested their performance again. She found that one of the reasons was poor reading and understanding skills of the students. She took zero period and made the slow learners read and then she asked questions from them. Results improved and students were also happy.
(i) Identify the function of management performed by Reeta.
(ii) Write first two steps of this function.
(iii) Name two values followed by Mrs. Reeta.

i) Controlling is the function of management performed by Reeta.

ii) following are the steps of controlling-

a)- Setting Performance Standards:

The first step in the process of controlling is concerned with setting performance standards. These standards are the basis for measuring the actual performance.

b)- Measurement of Actual Performance:

iii) taking utmost care of less than average students.

concern for students.

A company was manufacturing 'LED bulbs' which were in great demand. It was found that the target of producing 300 bulbs a day was not met by the employees. On analysis, it was found that the workers were not at fault. Due to electricity failure and shortage of workers, the company was not able to achieve the set targets and alternative arrangements were needed. To meet the increased demand, the company assessed that approximately 88 additional workers were required out of which 8 would work as heads of different departments and 10 would work as subordinates under each head. The required qualifications and job specifications were also enlisted. It was also decided that necessary relaxation should be given to encourage women, persons from backward and rural areas and persons with special abilities to assume responsible positions in the organisation. All efforts were made to match the ability of the applicants with the nature of work.
(a) Identify the functions of management discussed above.
(b) State the two steps in the process of each function discussed in the above para.
(c) List any two values which the company wants to communicate to the society.

(a) Staffing and controlling.
(b) Steps in staffing:
(i) Estimating manpower requirements: It involves knowing how. many persons are needed and of what type.
"To meet the increased ............................. subordinates under each head."
(ii) Recruitment: It involves searching for prospective employees and stimulating them to apply for jobs in the organisation.
"All efforts ware made .................. nature of work."
Steps in controlling:
(i) Comparison of actual performance with the standards: It would reveal the deviation between actual and desired results.
"It was found that the target .................... met by the employees".
(ii) Analysing deviations: It helps to find out the causes of deviations.
"On analysis, it was found ..................... were needed."
(c) Values which the company wants to communicate to the society:

∙∙ Using environment friendly method of production.

∙∙ Women empowerment.

Answer the following question in $$2$$ or $$3$$ sentences.
State any two importance of controlling.

The importance of controlling becomes clear from the following facts:

(1) Accomplishing Organisational Goals:

(2) Judging Accuracy of Standards:

(3) Making Efficient Use of Resources:

'A.S. Ltd.' is a large company engaged in assembly of air-conditioners. Recently the company had conducted the 'Time' and 'Motion' study and concluded that on an average a worker can assemble ten air-conditioners in a day. The target volume of the company in a day is assembling of 1,000 units of air-conditioners. The company is providing attractive allowances to reduce labor turnover and absenteeism. All the workers are happy. Even then the assembly of air-conditioners per day is 800 units only. To find out the reason the company compared actual performance of each worker and observed through C.C.T.V. that some of the workers were busy in gossiping.
(a) Identify the function of management discussed above.
(b) State those steps in the process of the function identified which are discussed in the above paragraph.

(a) The function of management discussed in the above case is Controlling.

(b) The steps discussed in the above paragraph are:
(i) Setting performance standards: The first step in the controlling process involves setting standards in clear, specific and measurable terms. Standards can be set in both quantitative as well as qualitative terms.
(ii) Measurement of actual performance: The next step relates to the measurement of actual performance. Performance should be measured in an objective and reliable manner. As far as possible, performance should be measured in the same units in which standards are set as this would make their comparison easier.
(iii) Comparison of actual performance with standards: This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation and noting deviations if any. If the actual performance is more than planned performance deviations are said to be positive or vice-versa.
(iv) Analysing Deviation: With the comparison of actual performance with the set standards, deviations in performance are identified.
(v) Taking corrective action: This is the final step involved in the controlling process. When the deviations are within acceptable limits no corrective action is required. Corrective action might involve training of employees, buying new machinery, increasing supervision and so on.

What are the advantages of MIS?

MIS offers the following advantages to the managers:
1. It facilitates collection, management and dissemination of information at different levels of management and across different departments of the organisation.
2. It supports planning, decision making and controlling at alllevels.
3. It improves the quality of information with which a manager works.
4. It ensures cost effectiveness in managing information.5. It reduces information overload on the managers as only relevant information is provided to them.

List the steps involved in PERT and CPM.

The steps involved in using PERT/CPM are as follows:
1. The project is divided into a number of clearly identifiable activities which are then arranged in a logical sequence.
2. A network diagram is prepared to show the sequence of activities, the starting point and the termination point of the project.
3. Time estimates are prepared for each activity. PERT requires the preparation of three time estimates optimistic (or shortest time), pessimistic (or longest time) and most likely time. In CPM only one time estimate is prepared. In addition, CPM also requires making cost estimates for completion of project.
4. The longest path in the network is identified as the critical path. It represents the sequence of those activities which are important for timely completion of the project and where no delays can be allowed without delaying the entire project.
5. If required, the plan is modified so that execution and timely completion of project is under control.

Explain management audit and its advantages.

Management audit refers to systematic appraisal of the overall performance of the management of an organisation. The purpose is to review the efficiency and effectiveness of management and to improve its performance in future periods. It is helpful in identifying the deficiencies in the performance of management functions.
The main advantages of management audit are as follows:
1. It helps to locate present and potential deficiencies in the performance of managementfunctions.
2. It helps to improve the control system of an organisation by continuously monitoring the performance of management.
3. It improves coordination in the functioning of various departments so that they work together effectively towards the achievement of organisational objectives.
4. It ensures updating of existing managerial policies and strategies in the light of environmental changes.

Answer the following question in $$10$$ to $$12$$ sentences.
Explain the limitations of controlling.

Limitations of Controlling:

1. Difficulty in setting quantitative standards:

Control system loses its effectiveness when standard of performance cannot be defined in quantitative terms and it is very difficult to set quantitative standard for human behaviour, efficiency level, job satisfaction, employee’s morale, etc. In such cases judgment depends upon the discretion of manager.

2. No control on external factors:

An enterprise cannot control the external factors such as government policy, technological changes, change in fashion, change in competitor’s policy, etc.

3. Resistance from employees:

Employees often resist control and as a result effectiveness of control reduces. Employees feel control reduces or curtails their freedom. Employees may resist and go against the use of cameras, to observe them minutely.

4. Costly affair:

Control is an expensive process it involves lot of time and effort as sufficient attention has to be paid to observe the performance of the employees. To install an expensive control system organisations have to spend large amount. Management must compare the benefits of controlling system with the cost involved in installing them. The benefits must be more than the cost involved then only controlling will be effective otherwise it will lead to inefficiency.

What is MIS? How is it relevant in communication and controlling?

Management Information System(MIS) is a computer-based information system that provides information and support for effective managerial decision-making. MIS provides the required information to the managers by systematically processing a massive data generated in an organisation. Thus, MIS is an important communication tool for managers.
MIS also serves as an important control technique. It provides data and information to the managers at the right time so that appropriate corrective action may be taken incase of deviations from standards.

Answer the following question in a word or a sentence.
Give the meaning of control.

Control is a function of management which helps to check errors in order to take corrective actions. This is done to minimize deviation from standards and ensure that the stated goals of the organization are achieved in a desired manner.

According to modern concepts, control is a foreseeing action; earlier concepts of control were only used when errors were detected. Control in management includes setting standards, measuring actual performance and taking corrective action the decision making.

List the advantages of Critical Point Control and Management by Exception.

When a manager sets critical points and focuses attention on significant deviations which cross the permissible limit, the following advantages accrue:
1. It saves the time and efforts of managers as they deal with only significant deviations.
2. It focuses managerial attention on important areas. Thus, there is a better utilization of managerial talent.
3. The routine problems are left to the subordinates. Management by exception, thus, facilitates delegation of authority and increases the morale of the employees.
4. It identifies critical problems which need timely action to keep the organization on the right track.

Vikas was the Chief Operating Officer of Yalet Ltd., a company providing advanced software solutions to Indian Defence Services. They had been carrying on business successfully for the last twelve years and earning enough profits. But from the last one year, they realised that though the business is getting big orders which are being fulfilled in time, even then the revenues kept on decreasing. Vikas was not able to find out where the problem was. He started keeping a close check on the progress of activities as he could sense that something was wrong. He wanted to take some action before any major damage could be done to the business. Vikas appointed a cyber security expert who monitored the companys processes and found out that the computer operator was deleting the entries from the computers and pocketing the revenues. He was caught and handed over to the police. This created an atmosphere of order and discipline in the organisation and helped in minimising dishonest behaviour on the part of the employees.
(a) Identify the function of management highlighted in the above paragraph.
(b) Explain any four other ways in which this function of management may help the organization.

(a) Here Controlling is highlighted and identified as the Management Function.

(b) Controlling Process may help the Organization to prevent Deviation. It can Minimize Deviation by taking Actions and Decisions that reduce their recurrence.
Controlling Process can help the organization in the following ways:
(i) Standards Setting Performance: Standards are the criteria, set in both quantitative and qualitative terms against which actual performance can be measured. Standard are the benchmarks towards which efforts of entire Organizations are directed. In order to determine whether the actual performance is proceeding in the right way, standards are required. As far as possible, standards must be set up in numerical or measurable terms.
(ii) Measurement of Actual Performance: Once the standards have been determined, the next step is to measure the actual performance. The various techniques for measuring are sample checking, performance reports, personal observation, etc. However, in order to facilitate easy comparison, the performance should be measured on the same basis that the standards have.
(iii) Comparing Actual Performance with Standards: The standards should be in quantitative terms of facilities such comparison. This step involves comparing the actual performance with standards laid down in order to find the deviations. Deviation means Difference between Actual Performance and Planned Performance. Deviations are of two types: Positive Deviation and Negative Deviation.
(iv) Analyzing Deviations: After identifying the deviations, various causes for same are analyzed and the most exact cause or causes are identified in order to take corrective measures. While analyzing the deviations, ‘Critical Point Control’ and ‘Management by Exception’ techniques are used to save time.

State the steps in the controlling process.

Controlling is a systematic process involving a series of steps which are as follows:

(i)Setting performance standards: The first step in the controlling process is to set the performance standards. Standards are those criteria, on which the actual performances are measured. These standards serve as a benchmark towards which an organization strives to work.
(ii) Measurement of actual performance: After the establishment of standards, the next step is measuring the actual performance with the set standards. This can be done by opting for several methods like personal observation, sample checking, performance reports, etc.
(iii) Comparison of actual performance with standards: In this step, the actual performances are compared with the established standards. Such comparisons reveal the deviation between planned and actual results.
(iv) Analysing deviations: At this stage, acceptable and non-acceptable deviations are analyzed where the following things are noticed:

· Critical point control: It means keeping the focus on key result areas where deviations are not acceptable and it should be attended on a priority basis.

· Management by exception: It means if a manager tries to control everything, it may end up controlling nothing. Thus, he should first handle the significant deviations, which require his priority.

(v) Taking corrective action: The most important step in the controlling process is taking corrective actions. After the deviations and their causes are analyzed, the task is to remove the hurdles from the actual work plan. The purpose of this step is to bring the actual performance up to the level of expectations by opting for corrective measures.

Isha Machines was a renowned name for quality sewing machines sinceMr. Suresh, the owner of isha Machines, was worried as the production had declined during the last three month. He directed the Production Manager to find out the reason. The production Manager ordered the different suprvisors to prepare a performance report of the workers working under them.

Identify the step taken by the Production Manager that is related to one of the functions of management.

The step taken by production manager is measurement of actual performance under the controlling function of management.

Controlling - Class 12 Commerce Business Studies - Extra Questions

What do you mean by Deviation?

What is compared with what in controlling?

Very Short Answer Questions:State the meaning of controlling.

Long Answer Question:In management controlling activity requires certain steps to be followed. Explain the steps.

Long Answer Question: Explain the importance of controlling.

One Mark Questions: Name the function which reviews the operations in a business unit.

Explain the techniques of managerial control.

One Mark Question: Which function of management ensures that actual activities conform to planned activities?

Very Short Answer Questions:How does control simplify the task of supervisor?

Give two examples of quantitative standards set up in controlling process.

Three Marks Question:"Planning and controlling are interrelated." Explain.

One Mark Question: Standards are set in quantitative as well as in qualitative terms. Identify the type of standards when it is set in terms of Cost to be incurred'.

Five Marks Question: Planning and Controlling are inseparable twins of management.

Three Marks Question:The last step in the process of controlling is 'taking corrective actions'. Briefly explain the steps in chronological order that are taken in the process of controlling before this step.

Three Marks Question:Explain any four points of importance of controlling.

Three Marks Question:Explain the concept of 'Controlling'. Why is it said that controlling should not be misunderstood as the last function of management?

Five Marks Question:Explain briefly any five points which highlight the importance of controlling.

One Mark Question: What should be done while 'taking corrective action' in the process of controlling when especially in the important areas deviations go beyond the acceptable range?

Four Marks Question: "There is a close and reciprocal relationship between planning and controlling." Explain the statement.

Five Marks Question:"Planning and controlling are inseparable twins of management." Explain.

Five Marks Question:Explain the various steps in the process of controlling.

Five Marks Question:State any five points that highlight the importance of 'controlling' function of management.

Five Marks Questions:Explain any five points which highlight the importance of controlling function in management.

Which element of Directing is related to controlling function? Explain how both are related to each other?

Explain the various steps in the process of controlling.

Define revenue center.

Explain any five points which highlight the importance of controlling function of management.

Name the principle that a manager should consider while dealing with deviations effectively.

Define investment center.

State any one situation in which an organisations control system loses is effectiveness.

Define profit center.

Define cost center.

Define PERT and CPM.

What are the main objectives of controlling?

State any five points that highlight the importance of controlling.

Explain any four points of importance of the controlling function of management.

Who is a young person under Factory Act, 1948?

What is the difference between Strike and Lockout?

What is Lay-off?

Is Dismissal and Discharge one and same thing?

What is closure?

What is Potential Appraisal? How does it measure?

Is Complaint and Grievance one and same thing?

What is 360 Degree Appraisal? Does it work?

What is Grievance? Why someone Is suspended from employment and what subsistence allowance one get at the time of suspension?

What are the Judgment errors that may cause hindrance in appraisal? Judgment errors

Answer the following question:State the importance of controlling.

Which two steps in the process of control are concerned with compelling events to confirm to plan?

Define 'Controlling'. Explain its importance.

Is controlling backward looking?

Why is planning an empty exercise without controlling?

Prakash Jha wishes to fix-standard production for worker along with standard time to complete the job. Under which function of management, standards are fixed?

Explain to a newly appointed foreman under whose supervision, school bags are being made. How has he to carry out the process of control?

Give two examples of qualitative standards set up in controlling process.

How does controlling simplify the task of supervisor?

How does controlling help in "Judging accuracy of standards" and "Ensuring order and discipline."

"There is close and reciprocal relationship between planning and controlling'. Explain the statement through an example.

What is feedback in controlling?

Explain the various steps involved in the process of control.

Explain the meaning of controlling.

What do you mean by key result area in the context of controlling?

You are a manager in a car manufacturing company. It is reported that postal expenses have increased by 10% and cost of raw material is increased by 2% which of the two deviations is more critical to you? It is related to which concept of controlling? Explain it.

Explain the importance of controlling in an organisation.

Name and explain the first three steps of the function of management shown in the picture.

'An effort to control everything may end up in controlling nothing.' Explain.

Very Short Answer Questions:"Controlling is forward looking activity". Discuss.

Very Short Answer Questions:What is feedback in controlling?

Very Short Answer Questions:State the objectives of controlling.

Short Answer Questions: 'An ideal control technique is the one that checks every bit of performance". Comment.

How is controlling related to planning?

Very Short Answer Question:'Planning provides basis of control'. Explain briefly.

Long Answer Type Questions: Discuss the relationship between planning and controlling.

Very Short Answer Questions:'Controlling is continuous activity in an organisation'. Explain.

Short Answer Question: 'Planning is an empty exercise without controlling'. Explain the statement through an example.

Very Short Answer Questions:'Controlling means taking action'. Explain.

Long Answer Question:Explain the relation between planning and controlling.

Long Answer Question."A manager who tries to control everything may end up controlling nothing". Describe this statement with suitable example.

Long Answer Question.Explain the importance of controlling process.

Long Answer Question:What is meant by controlling? Explain any three points of importance of controlling.

Very Short Answer Questions:
State the meaning of controlling.

Long Answer Question:
In management controlling activity requires certain steps to be followed. Explain the steps.

Long Answer Question:
Explain the importance of controlling.

One Mark Questions:
Name the function which reviews the operations in a business unit.

One Mark Question:
Which function of management ensures that actual activities conform to planned activities?

Very Short Answer Questions:
How does control simplify the task of supervisor?

Three Marks Question:
"Planning and controlling are interrelated." Explain.

One Mark Question:
Standards are set in quantitative as well as in qualitative terms. Identify the type of standards when it is set in terms of Cost to be incurred'.

Five Marks Question:
Planning and Controlling are inseparable twins of management.

Three Marks Question:
The last step in the process of controlling is 'taking corrective actions'.
Briefly explain the steps in chronological order that are taken in the process of controlling before this step.

Three Marks Question:
Explain any four points of importance of controlling.

Three Marks Question:
Explain the concept of 'Controlling'. Why is it said that controlling should not be misunderstood as the last function of management?

Five Marks Question:
Explain briefly any five points which highlight the importance of controlling.

One Mark Question:
What should be done while 'taking corrective action' in the process of controlling when especially in the important areas deviations go beyond the acceptable range?

Four Marks Question:
"There is a close and reciprocal relationship between planning and controlling."
Explain the statement.

Five Marks Question:
"Planning and controlling are inseparable twins of management."
Explain.

Five Marks Question:
Explain the various steps in the process of controlling.

Five Marks Question:
State any five points that highlight the importance of 'controlling' function of management.

Five Marks Questions:
Explain any five points which highlight the importance of controlling function in management.

Which element of Directing is related to controlling function?
Explain how both are related to each other?

Answer the following question:
State the importance of controlling.

Very Short Answer Questions:
"Controlling is forward looking activity". Discuss.

Very Short Answer Questions:
What is feedback in controlling?

Very Short Answer Questions:
State the objectives of controlling.

Short Answer Questions:
'An ideal control technique is the one that checks every bit of performance". Comment.

Very Short Answer Question:
'Planning provides basis of control'. Explain briefly.

Long Answer Type Questions:
Discuss the relationship between planning and controlling.

Very Short Answer Questions:
'Controlling is continuous activity in an organisation'. Explain.

Short Answer Question:
'Planning is an empty exercise without controlling'. Explain the statement through an example.

Very Short Answer Questions:
'Controlling means taking action'. Explain.

Long Answer Question:
Explain the relation between planning and controlling.

Long Answer Question.
"A manager who tries to control everything may end up controlling nothing". Describe this statement with suitable example.

Long Answer Question.
Explain the importance of controlling process.

Long Answer Question:
What is meant by controlling? Explain any three points of importance of controlling.

Long Answer Question:
Explain the various steps involved in a controlling process.

Long Answer Question:
Describe in detail the relation between controlling and planning.

Long Answer Question:
"Comparing the actual performance with the laid standards, finding out the deviations and taking corrective action is an important process of a function of management". Name this function and explain the process.

Long Answer Question:
What is meant by controlling? Explain any three steps in the process of control.

Long Answer Question:
Develop a controlling process for a bag manufacturing company.

One Mark Question:
What should be the 'focus point for a manager while controlling, as controlling at each and every step is not possible?

Three Marks Question:
Explain why it is said that controlling is a forward looking as well as backward looking function.

Three Marks Question:
"Controlling is looking back." Explain.

One Mark Question:
State why is actual performance compared with standards in the process of controlling.

Three Marks Questions:
'Explain how 'Critical Point Control' helps in controlling process.

Three Marks Question:
After setting the performance standards the next step in the controlling process is the 'measurement of actual performance'. Explain this step in the process of controlling.

Three Marks Questions:
Explain how controlling helps in:
(i) Making efficient use of resources; and
(ii) Improving employees' motivation.

Long Answer Question:
Controlling helps in financial matters and maintaining and improving quality. Explain this statement in brief.

Three Marks Questions:
Explain how controlling helps in:
(i) accomplishing organisational goals; and
(ii) judging accuracy of standards.

Six Marks Question:
Explain the various steps in the process of controlling.

Three Marks Question:
Explain 'Setting Performance Standards' as a step of controlling process.

Three Marks Question:
Explain 'Taking corrective action' as a step of controlling process.

Three Marks Question:
Explain why it is said that 'Planning' and 'Controlling' are inseparable twins of management.

Five Marks Question:
Describe briefly the relationship between controlling and planning.

Six Marks Question:
What is meant by 'Controlling'? Describe the steps in the process of controlling.

Six Marks Question:
Explain any four points that highlight the importance of controlling.

Four Marks Question:
"Controlling is a systematic process involving a series of steps."
State the steps involved in the process.

Three Marks Question:
Explain 'Measurement of actual Performance' as a step of controlling process.

Five Marks Question:
Describe briefly the steps in the process of controlling.

Answer the following question in a sentence or a word.
What is positive variation in controlling?

Answer the following question in $$15$$ to $$20$$ sentences.
Explain the importance of controlling.

Answer the following question in $$15$$ to $$20$$ sentences.
Briefly explain the controlling process.

Answer the following question in a sentence or a word.
What do you mean by controlling?

Answer the following question in $$2$$ or $$3$$ sentences.
Mention any two steps in controlling process.

Answer the following question in $$2$$ or $$3$$ sentences.
State any two importance of controlling.

Answer the following question in $$10$$ to $$12$$ sentences.
Explain the limitations of controlling.

Answer the following question in a word or a sentence.
Give the meaning of control.