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Class 12 Business Studies - Chapter Controlling NCERT Solutions | Explain the importance of controlling in

Welcome to the NCERT Solutions for Class 12th Business Studies - Chapter Controlling. This page offers a step-by-step solution to the specific question from Excercise 3 , Question 3: explain the importance of controlling in an organi....
Question 3

Explain the importance of controlling in an organisation. What are the problems faced by the organisation in implementing an effective control system?

Answer

Controlling is an indispensable function of management. Controlling refers to the process of measurement of performance according to standards, measuring deviations and taking corrective action to achieve predetermined goals. Following are the factors that highlighted the importance of controlling:

  1. Accomplishing Organisational Goals: It measures progress towards the organisational goals and find out deviations. In the absence of control system, activities may not be carried out according to plans. Thus, we can say, it guides the organisation and keeps it on the right track, so that it can attain its goals.

  2. Judging Accuracy of Standards: Through an effective control system, managers can easily judge the accuracy of standards. It also keeps a careful check on the changes taking place in the organisation and in the environment, which facilitates the review of standards, in the light of such changes.

  3. Making Efficient Use of Resources: By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms, which helps in effective and efficient utilization of resources.

  4. Improving Employees Motivation: It helps employees in realising, what they are expected to do and what are the standards of performance, on the basis of which they are appraised. This motivates them to perform better.

  5. Ensuring Order and Discipline: By keeping a check on the activities of the workers, controlling creates an atmosphere of order and discipline among them. It also helps to keep a check on the dishonest behaviour of employees.

  6. Facilitating Coordination in Action: It provides direction to all activities and each department and employees is governed by predetermined standards, which helps in establishing coordination among them.

The problems faced by the organisation in implementing an effective control system are:

  1. Difficulty in setting Quantitative Standards: Control system is effective when standards are defined in quantitative terms. But in some cases, like employee morale, job satisfaction, etc, it is not possible to set quantitative standards. In the absence of these standards, measurement and comparison becomes difficult.

  2. Little Control on External Factors: There are certain external factors like change in government policies, technological changes, competition, etc, which are beyond the control of the organisation. Thus, controlling such factors becomes difficult.

  3. Resistance from Employees: Employees often resist control as they consider it as restriction or boundation on their freedom. e.g. employees might resist working under close supervision of CCTV’s and cameras.

  4. Costly Affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small firm cannot afford to install an expensive control system. The cost of control system should not exceed the benefits derived from it.

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