Class 12 Business Studies - Chapter Controlling NCERT Solutions | Explain the various steps involved in th
Explain the various steps involved in the process of control.
The following steps involved in the process of controlling process.
1. Setting Performance Standards: Standards are the criteria, against which actual performance would be measured. These serve as benchmarks, towards which an organisation strives to work.
The first step of the control process is to establish standards, against which actual results are to be evaluated. Standards are set in quantitative as well as qualitative terms. But, managers should try to set standards in quantitative terms, which can be easily measured and compared later on. If standards are set in qualitative terms, an effort must be made to define them clearly for easy measurement. Due to changes taking place in internal and external environment, standards need to be revised regularly.
2. Measurement of actual performance: Once the standards are fixed, the next step is to measure the actual performance. Generally, it is conducted by the managers to analyse the overall efficiency level of the employees. While measuring the performance, objective and reliable methods should be used, such as sample checking, preparing reports, personal observation, etc.
Measurement should be done after the task is completed. However, sometimes performance can be measured during the performance to ensure regular control over the activities. Usually, in large organisations, certain pieces are checked at random, instead of checking the whole lot. This is called sample checking.
3. Comparing Actual Performance with Standards: This step involves comparison of actual performance with the standard. Such comparison helps in revealing the deviations between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.
4. Analysing Deviations: Under this step, deviations in key areas of business need to be attended on urgent basis as compared to deviations in certain insignificant areas. There is a need to determine the acceptable range of deviations in all operational areas. Following points should be kept in mind, while analysing deviations:
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Critical point control: According to this principle, control system should first focus on Key Result Areas (KRAs) which are critical to the success of the organisation. It is because, it is not possible to keep a check on all the activities of the enterprise. Therefore, if anything goes wrong at the critical points or key areas, immediate action should be taken.
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Management/control by Exception: It suggests that, if manager tries to control everything, he may end up in controlling nothing.
5. Taking corrective Action: This is the final step in which manager takes corrective measures to bring back everything on track in the organisation i.e. according to set plans, corrections are required in KRAs, which are critical to the success of the success of the organisation, or, in areas where deviations go beyond the permissible limits.
Corrective action may involve training of employees, hiring labour for extra time, replacement of machinery, etc. sometimes, if deviations cannot be corrected despite the best efforts of managers, standards may be revised.
More Questions From Class 12 Business Studies - Chapter Controlling
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Explain the techniques of managerial control.
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‘Planning is looking ahead and controlling is looking back.’ Comment.
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Write a short note on budgetary control as a technique of managerial control.
- Q:-
Mr Shantanu is a chief manager of a reputed company that manufactures garments. He called the production manager and instructed him to keep a constant and continuous check on all the activities related to his department so that everything goes as per the set plan. He also suggested him to keep a track of the performance of all the employees in the organisation so that targets are achieved effectively and efficiently.
a. Describe any two features of Controlling highlighted in the above situation.(Goal Oriented, continuous and pervasive – any 2).
b. Explain any four points of importance of Controlling. - Q:-
Mr.Arfaaz had been heading the production department of Writewell Products Ltd., a firm manufacturing stationary items. The firm secured an export order that had to be completed on a priority basis and production targets were defined for all the employees. One of the workers, Mr. Bhanu Prasad, fell short of his daily production target by 10 units for two days consecutively. Mr. Arfaaz approached MsVasundhara, the CEO of the Company, to file a complaint against MrBhanu Prasad and requested her to terminate his services. Explain the principle of management control that MsVasundhara should consider while taking her decision. (Hint: Management by exception).
- Q:-
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. - Q:-
Discuss the relationship between planning and controlling.
- Q:-
Give any two standards that can be used by a company to evaluate the performance of its Finance & Accounting department.
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Name the principle that a manager should consider while dealing with deviations effectively. State any one situation in which an organisation’s control system loses its effectiveness.
- Q:-
‘An effort to control everything may end up in controlling nothing.’ Explain.
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(Further information related to the above question 6) The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management consultant -Mukti Consultants - to recommend a restructure plan to bring the company back on the rails. Mukti Consultants undertook a study of the production process at the plant of the company Bhasin Limited and recommended the following changes —
• The company should introduce scientific management with regard to production.
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• ‘Work study’ should be undertaken to optimise the use of resources.
• ‘Standardisation’ of all activities should be implemented to increase efficiency and accountability.
• To motivate the workers ‘Differential Piece Rate System’ should be implemented.
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