Class 12 Business Studies - Chapter Controlling NCERT Solutions | Explain the importance of controlling in
Explain the importance of controlling in an organisation. What are the problems faced by the organisation in implementing an effective control system?
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:
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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.
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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.
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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.
More Questions From Class 12 Business Studies - Chapter Controlling
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‘Planning is looking ahead and controlling is looking back.’ Comment.
- Q:-
Explain the techniques of managerial control.
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Write a short note on budgetary control as a technique of managerial control.
- Q:-
Explain the various steps involved in the process of control.
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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).
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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.
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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.
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• To motivate the workers ‘Differential Piece Rate System’ should be implemented.
(The above changes should be introduced apart from the steps recommended as an answer to Part c - case problem 6 above.) It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.
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