Question 5: A company ‘M’ limited 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 players 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.
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.
Answer:
a. Identify the benefits the company will derive from a good control system.
ANS. When company starts following a good control on operations, it leads to certain benefits which are:
- Helpsinachievingdesiredgoals.
- Judging accuracy of operations and standards.
- Making efficient and effective use of resources.
- Improving Employees Morale.
- Ensuring proper flow of orders and that the whole system is in discipline.
- Facilitates coordination and improves the performance of every individual.
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.
ANS. Company relates its planning with control in this line of business by implementing effective control system. This will help in two aspects: planning makes controlling effective and efficient, whereas, controlling improves future planning because it is like a post-mortem of past activities to find out deviations from the standards and in orders to ensure that its plans are actually implemented and targets are attained.
They will take the help from controlling process as it is a systematic process and it leads to various benefits. The process of controlling involves:
- Setting up of standards: In this step, company sets some targets against which the actual performance is measured.
- Measuring of performance: In this step, company is able to measure the performance and evaluate what is actually done by the employees.
- Compare performance: After evaluating the actual result, company compares the actual performance with the planned one. This helps in knowing that the desired goal is achieved or not.
- Analysing deviations: This refers to the difference between actual and desired performance. It helps the company in knowing that the deviation is positive or negative. It needs to focus on a part rather than analysing the whole.
- Taking corrective measures: Final step is to know the type of deviations and try to remove this deviation, so that in future it matches with the plans.
c. Give the steps in the control process that the company should follow to remove the problems it is facing.
ANS. The company should follow these steps in a systematic manner:
- Setting performance standards.
- Measurement of actual performance.
- Comparing actual performance with standards.
- Analysing deviations.
- Taking corrective action.
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