Solution

CONTROLLING

Class 12 - Business Studies

1. An effective control system communicates the goals and standards of appraisal for employees to subordinates well in advance. A
good control system guides employees to come out from their problems. This free communication motivate the employees to give
better performance.
2. (i) Quantitative standards: The targets or plans which can be expressed in numerical terms is known as quantitative standards. For
instance Number of units to be produced. e.g. 20,000 units will be produced.(in numerals)
(ii) Qualitative Standards: The targets which are expressed by showing some quality standards. For instance motivation level of
employees are examples of qualitative standards.e.g. satisfaction of consumers.
3. a. Two benefits which the company will derive from a good control system are:
i. Accomplishing organisational goals: The controlling function measures performance towards the organisational goals and
brings to light the deviations, if any, and indicates corrective action.
ii. Judging accuracy of standard: While performing the function of controlling, a management should have a good control

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system which enables management to verify whether the standards set are accurate and objective.
b. The steps that the company should follow to remove the problems it is facing are:

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a. Analysing deviations to identify their causes, e.g. obsolete machinery, defective process, etc.
b. Taking corrective action: The company should undertake technological upgradation of machinery, and modify the existing

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process, etc.
4. Importance of controlling:
1. Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings
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to light the deviations, if any, and indicates corrective action. The controlling function measures performance towards the
organisational goals and brings to light the deviations, if any, and indicates corrective action.
2. Ensuring Order and discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to
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minimise dishonest behaviour by keeping a close check on their activities. controlling function ensures order and discipline.
With its implementation, all the unnecessary activities like theft, corruption, delay in work and uncooperative attitude are
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checked.
5. Controlling is a basic managerial function. Controlling consists of verifying whether everything occurs in conformities with the
plans adopted, instructions issued and principles established.
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6. Factors to be kept in mind while measuring standards are :

i. They should be in measurable terms.
ii. They should be flexible to change.
iii. They may be in qualitative or quantitative terms
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iv. Standards should be stated in clear terms without any ambiguity and confusion.
7. The possible causes for decline in production are-
1.There may be some defect in machinery by which the components are produced.
2. Employees are not performing efficiently.
3. Sometimes employees may become lethargic.
The company can take the following steps to acheive the desired targets-
1. Company can replace the machinery or get repaired, if fault is in machine.
2. If employees are not performing efficiently, the company can give training to employees.
3. If employees are becoming lethargic,the company needs to keep a close supervision on their employees.
8. In the absence of controlling, any organization cannot predict its performance and planning is done to fill the deviation between
actual performance and estimated performance.
9. Controlling is a pervasive function means that its applicability is universal , it does not matter that the organization is profit
making or non profit making , the managers of all the organizations have to follow the controlling step.
10. a. Organising and Controlling.
b. i. Concept related to Organising:
Under it, the second step of the organizing process i.e., Departmentalisation, has been described.

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 ii. Concept related to Controlling:
Following two concepts related to controlling have been described:
Critical Point Control
It refers to that concept of management which holds that instead of all activities, the management should focus its
attention only on important activities.
Management By Exception
It refers to the principle of organizational control which holds that only significant deviations (i.e., exceptions)
should be brought to the top management attention.
11. Controlling is the last step in the management process. When the staffing is done, the employee controlling is helpful in evaluating
their performance and trying to remove the flaws in their work, if we talk about motivation, their performance needs some
additional external push to get them working on a particular task. If your control over your employees is good you can achieve the
desired goals in minimal time.
12. a. The functions of management highlighted in the above paragraph are Directing and Controlling.
b. The employees are motivated by Non-Financial Incentives like Employee Recognition Programmes, Employee Participation,
Employee Empowerment.
c. The two values that the manager wants to communicate to society through his work and behaviour are:

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i. Respect for employees
ii. Concern for an environment

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13. Comparison of Actual Performance with Standards: This step involves a comparison of actual performance with the standards.
Such a comparison will reveal the deviations between actual and desired results. Deviation means gap or difference between

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actual performance and standard performance.
14. Planning can be successful only in the presence of controlling. It means that if the control is not present it is useless to have
planning. If the process of controlling is taken away from management, no person working in the enterprise will take it seriously
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to work according to the plans and consequently, the plans will fail. The managerial process moves in a definite sequence like
planning, organising, staffing, directing and controlling. This sequence shows that planning is the first step in the managerial
process and controlling happens to be the last step.
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15. Following are the facts that should be kept in mind while setting standards:
i. Standards should be easily obtainable.
ii. Standards should be measurable.
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iii. Standards should be flexible so that changes can be introduced according to the changing situations.
iv. Standards should be simple and clear so that the people for whom they are laid down should understand them easily.
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16. Mr. Ajay should pay immediate attention towards 5% increase in cost of production rather than 15% increase in refreshment
expenses because of the following reasons
(i) It is an important part to keep a check on cost of production as it is a Key Area which may affect the profits of the company.
(ii) Controlling Process suggests to focus on Key Areas first.
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(iii) Refreshment cost is not a regular expense however Cost of production is a regular expenditure and will affect the Profitability.
17. Controlling is a forward looking function of management. All actions taken in the name of controlling directly or indirectly helps
the organization to get better performance in future.
Controlling is like planning, ideally forward looking, and the best kind of managerial control corrects deviations from plans before
they occur.
18. The function of Management is Controlling. The first three steps of the controlling process are as follows:
i. Setting up of standards: Standard means target or the yardstick against which the actual performance is measured.
ii. Measuring of Performance: After setting up of standards, the performance of the employees is measured by evaluating the
actual work done by the employees.
iii. Compare performance against standard: After measuring the performance the Manager compares the actual performance with
the planned performance and standard.
19. Features of Controlling highlighted in the given situation are:
i. Goal-oriented function: controlling is a goal oriented function as it make sure that everyone should follow the plan or work is
accomplished as per the plan as plan always aims at achieving organization goal or objectives.
ii. Continuous function: Controlling is not a one-off activity that managers have to perform once in a while. It is generally a
continuous process that goes on permanently in different ways. Managers have to constantly compare their actual results with
their targets and make changes accordingly.

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 iii. Pervasive function: The process of controlling is all-pervasive. In other words, managers at all levels of management
hierarchies have to use controlling. The nature of controlling measures that managers use might differ but they all have to use
them.
20. a. (i) Planing
This function is evident from the lines:
"To explore and analyze different options of each and every activity that is to be undertaken by him in the future has become
his habit."
(ii) Leadership
“Besides, he quickly brings his subordinates under his own influence.”
b. Analysing deviations
Taking corrective action
c. Vestibule training
21. He must follow the controlling process given below:
1. Setting performance standards:
The first step in the controlling process is setting up of performance standards with which the actual results are to be
compared. A standard is the criterion against which actual performance can be compared. Standards can be in the shape of

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goals, targets and objects.
2. Measurement of actual performance

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The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring
the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible

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standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when
performance of manager has to be measured.
3. Comparing actual performance with standards
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This step involves comparison of actual performance with the standard. Comparison between actual performance and standard
will reveal the deviation between actual and desired results. Deviation means the difference between actual performance and
standard performance.
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4. Analyzing deviation
Analyzing deviation means identifying the reasons of difference or deviations, which may be defective material, defective
machinery, defective physical conditions of work etc. It is important to determine the acceptable range of deviations, say 5%.
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It means minor or very small deviations should be ignored, for example, 3 units less produced by David.
5. Taking corrective actions:
Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for it.
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There are two alternatives here-

a. Taking corrective measures for deviations which have occurred; and
b. After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the
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targets. It is here the controlling process comes to an end. Follow up is an important step because it is only through taking
corrective measures, a manager can exercise controlling.
22. Deviation = Actual Performance - Standard Performance
Standard Performance = 25 garments
Statement showing deviations:
Particulars Actual performance Deviation

Mohan 30 30-25 = +5

Shyam 28 28-25 = +3

Sohan 23 23-25 = -2

Ram 25 25-25 = +0

Dinesh 29 29-25 = +4
23. The principle of management that a manager should consider while dealing with deviations effectively is management by
exception. It means that any attempt to control everything results in controlling nothing.
For example, A management has planned to earn a 5% profit on its annual sales. At the end of the year, the actual performance is
compared with the planned performance. The profit is estimated to be a total of 4.5%. This is only a small deviation and should

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 not be brought to the consideration of the management. However, if the deviation is of two per cent, the management must resort
to taking corrective actions, as this is a huge deviation from the planned performance.
24. No, a control technique should not check each and every activity in an organisation. Reason:- Critical Point Control: It is neither
economical nor easy to keep a check on each and every activity in an organisation. Control should, therefore, focus on key result
areas (KRAs) which are critical to the success of an organisation. These KRAs are set as the critical points. According to this
principle, control should focus on Key Result Areas (KRAs), which are critical to the success of the organisation. When anything
goes wrong in these areas, the entire organisation suffers.
25. a. The function of management discussed above is 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.
b. The steps involved in the process of controlling which are discussed in the above paragraph are:
i. Setting standards of performance: "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."
ii. Measurement of actual performance: "Even then the assembling of air-conditioners per day is 800 units only."

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iii. Comparison of actual performance with the standards: The company compared actual performance of the workers
with the planned performance and noted deviation of 200 units.

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iv. Analyzing deviations: "To find out the reason, the company compared the actual performance of each worker and
observed through CCTV that some of the workers were busy in gossiping."
26. Controlling function of management means a process of ensuring that activities in an organisation are performed according to the
standards and goals set in advance. Controlling ensures that physical and human resources are being used effectively and
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efficiently for the achievement of pre-determined goals. In this way, controlling is a goal-oriented function of management.
27. Controlling is the function that helps in verifying whether the standard set are accurate or not. Controlling function can be defined
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as comparison of actual performance with the planned performance. If there is any difference or deviation then finding the reason
for such difference and taking corrective measures or action to stop those reasons so that in future there is match between actual
and planned performance.
28. a. The controlling function of management is needed to rectify the above situation.
b. The procedure to be followed so that the actual production may come up with the target production is as follows:
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i. Establish standards to measure performance.

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ii. Measure actual performance.

iii. Compare performance with the standards.
iv. Take corrective actions..
29. Some deviations in performance can be expected in all activities. It is, therefore, important to determine the acceptable range of
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deviations. Also, deviations in key areas of the business need to be attended to more urgently as compared to deviations in certain
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insignificant areas. Critical point control should be used by a manager in this regard.
Critical Point Control: It is neither economical nor easy to keep a check on each and every activity in an organization. Control
should, therefore, focus on key result areas (KRAs) which are critical to the success of an organization. These KRAs are set
critical points. If anything goes wrong at critical points, the entire organization suffers. According to this principle, control should
focus on Key Result Areas (KRAs), which are critical to the success of the organisation. When anything goes wrong in these
areas, the entire organisation suffers.
30. Under controlling , expected results are compared with actual results. Deviations, if any, should lead to investigation of the factors
responsible which may effect future operations Remedial actions should be followed so as to prevent the occurrence of defects
thereafter In other words, control must ensure timely detection of deviations and prevention of their repetition in future.
31. A. Controlling is the function of management being performed by Anubhav by conducting tests to assure for the quality of the
garments manufactured in his export house. 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.
B. The term 'deviations' refers to the difference between the actual performance and planned performance. If the actual
performance is more than the planned performance, it may be said to be positive in nature or vice-versa.
C. The benefits of training and development to an organisation are as follows:

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 i. Increased productivity: Training and development directly improves efficiency and productivity of employees. Employees
remain up to date with new technology and thus use existing ones in a better way. Well trained employees show both quantity
and quality performance. There is less wastage of time, money and resources when employees are properly trained.
ii. Less supervision: Training improves necessary skill sets in employees and empowers them to address tasks independently. In
other words a well trained employee will be well acquainted with the job and hence they need less supervision.
iii. Reduction of errors & accidents: Most of the errors occur because of many employees lack the desired knowledge and precise
skills required for doing a particular job. Continuous Training and development ensures that employees get the right skills at
right time. The more trained an employee is, the less are the chances of committing errors in job.
In addition to the above scenarios training and development leads to improved profitability and more positive attitudes towards
profit orientation, it also aids in organizational development i.e. organization gets more effective decision making and problem
solving. Training and development helps in understanding and carrying out organizational policies thereby developing leadership
skills, motivation, loyalty, better attitudes, and other aspects that successful employees and managers usually display. Training and
development demonstrates a commitment to keeping employees on the cutting edge of knowledge and practice.
32. a. The technique for measurement of performance used above is Sample checking.
It is evident from the line "She in a typical inspection, picks up one or more pieces per garment item and gets them measured
at random, and all its dimensions are recorded in a measurement table."

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b. The concepts related to the analysing deviation being used during an inspection are stated below:
i. Management by exception: It is evident from the line: "This table shows each measurement for all sizes and will indicate

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whether or not particular dimensions are within tolerance. For example, one such dimension might include shoulder width
from edge to edge wherein a small discrepancy of up to 1/8 is allowed. Whereas a deviation up to 1/4 is allowed for neck

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width from edge to edge measurement.".
ii. Critical point control: It is evident from the line "Also for the aspects which are critical to the garment i.e. fasteners like
buttons and zippers a fatigue test is carried out by testing each of them 50 times to ensure that there is no loss of function
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after use."
33. We do not agree with the statement that controlling is the last function of management. The controlling function finds out how far
actual performance deviates from standards, analyses the causes of such deviations and attempts to take corrective actions based
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on the same. This process helps in the formulation of future plans in light of the problems that were identified and, thus, helps in
better planning in the future periods. Thus, controlling only completes one cycle of the management process and improves
planning in the next cycle. It is a continuous process thus we can say that controlling is not the last function of management
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34. The first two steps in the process of controlling are as follows:
i. Setting performance of standards: The first step in controlling process is setting of performance standards. Standards are the
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criteria against which actual performance would be measured. Standards serve as benchmarks towards which an organisations
strives to work.
ii. Measuring of Actual performance: Once performance standards are set, the next step is measurement of actual performance.
Performance should be measured in an objective and reliable manner. There are several techniques for measurement of
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performance. These include personal observation, sample checking , performance reports, etc.
35. a. Directing and Controlling are the two functions of management being discussed in the above paragraph.
b. The importance of controlling function is described below:
i. Accomplishing organizational goals: Controlling helps in accomplishing organizational goals by constantly monitoring
the performance of the employees and bringing to light the deviations, if any, and taking appropriate corrective action.
ii. Judging accuracy of standards: A good control system enables helps the business managers to judge the objectivity and
accuracy of the standards. All the activities of the organization are monitored and a close check is kept on the changes in
the business environment so as to review and revise the standards in light of such changes.
36. Planning is the basis for control in the sense that it provides the entire spectrum on which control function is based. In fact, these
two terms are often used together in the designation of the department which carries production, planning and scheduling. Control
measures the behaviour and activities in the organisation suggest measures to remove deviations, if any.
Control is the result of particular plans, goals and policies. Thus, planning offers and affects control. Also, planning is affected by
control in the sense that many of the information provided by control is used for planning. Thus, there is a reciprocal relationship
between planning and controlling.
37. Both Rahul and Pawan are partially correct as Controlling is both forward as well as backward looking.
(i) Controlling as a forward looking function: Controlling is a forward looking function because it helps to analyse deviations and

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 to apply them for future decision making. These deviations helps in planning and to avoid wastage of resources.
(ii) Controlling as a Backward looking function:
While performing controlling function the manager compares the actual performance with the Past Planned Performance in order
to complete and make the planning function successful and acheive the desired results.
38. i. Controlling the function of management highlighted in the above paragraph.
ii. The Controlling Process may help the Organization in the following ways:
a. Standards Setting Performance: Standards are the criteria, set in both quantitative and qualitative terms against which
actual performance can be measured. Standard are the bench marks towards which efforts of entire Organization 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.
b. 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.
c. Comparing Actual Performance with Standards: The standards should be in quantitative terms of facilitate such
comparison. This steps involves comparing the actual performance with standards laid down in order to find the deviations

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. Deviation means Difference between Actual Performance and Planned Performance. Deviations are of two types :
Positive Deviation and Negative Deviation.

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d. Analyzing Deviations: After identifying the deviations, various causes for same are analysed 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.
e. Taking Corrective Actions: The final step in the process of controlling involves taking corrective action. If the deviations
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are within acceptable limits, no corrective measure is required. However, if the deviations exceed the acceptable limits,
they should be immediately brought to the notice of the management for taking corrective measures, especially in the
important and critical areas.
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39. The principle of management control that MS Vasundhara must consider while taking her decision is management by exception. It
means that any attempt to control everything results in controlling nothing. Only those deviations must be brought to notice which
are beyond the permissible limit. In this case, Mr Bhanu has fallen short of his daily production target only by 10 units. This is
only a small deviation and it is not right to terminate him on the basis of this.
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40. i. Controlling helps inefficient use of resources- Controlling help inefficient use of resources. An effective controlling system
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seeks to reduce wastage and spoilage of resources because activities are performed in accordance with predetermined
standards.
ii. Controlling facilitates decision-making- Controlling and decision-making are considered to be twins. The process of
controlling is complete only when corrective measures are taken. This requires taking the right decision as to what type of
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follow up action is to be taken. Controlling helps in quick decision-making by bringing together all the units in action.
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41. a. The two aspects about his business that Raghav was controlling in order to make it successful are listed below.
i. A standard taste was maintained.
ii. The orders were executed on time.
b. The two points that highlight the importance of the controlling function are listed below:
i. Making Efficient use of Resources: Another important function of controlling is that in this each activity is performed in
such a manner in accordance with predetermined standards & norms so as to ensure that the resources are used in the most
effective & efficient manner for the further availability of resources.
ii. Ensuring Order & Discipline: Controlling creates an atmosphere of order & discipline in the organization which helps to
minimize dishonest behaviour on the part of the employees. It keeps a close check on the activities of employees and the
company can be able to track and find out the dishonest employees by using computer monitoring as a part of their control
system.
c. Rohit had adopted an autocratic style of leadership. An autocratic leader expects strict compliance from his subordinates with
regard to the orders and instructions given by him. Therefore, it involves only one-way communication.
42. a. The function of management highlighted in the above case is “Controlling”. The step involved in the process of control is
“Comparison of actual performance with standards”.
b. A manager must take further steps to complete the process of controlling. These steps are:
Analysing deviation: Finding out deviations becomes easy through measuring the actual performance. Performance levels are

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 sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units,
cost, money terms, etc. Basically, it is identifying the reasons of difference or deviations, which may be defective material,
defective machinery, defective physical conditions of work etc. It is important to determine the acceptable range of deviations,
say 5%. It means minor or very small deviations should be ignored, for example, 3 units less produced by David.
Taking corrective action: Once the causes and extent of deviations are known, the manager has to detect those errors and
take remedial measures for it. Taking corrective action is the final step in the controlling process. If deviations are within the
acceptable limits, then no need to take corrective action. But if deviations go beyond the acceptable range, especially in the
critical areas, it requires immediate action so that it will not take place again.
Corrective action might involve:
Additional workers and equipment
Technology up-gradation
Training to employees
Modify the existing process
Overtime work
43. Controlling helps in achieving objectives and improving employees' morale by following ways:
1. By continuously measuring the performance in the light of organisational goals brings out the deviations, if any, and indicates

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the corrective actions to be taken which helps in measuring the status. Thus, controlling keeps the organisation on the right
track and helps the organisation to manage future contingencies.

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2. The implementation of controlling makes all the employees to work with complete dedication and boost their morale because
they are aware that their performance will be evaluated, and they will have a chance to build their reputation in the

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organisation. The employees with good performance record are promoted or given higher incentives or bonus for their
achievement.
44. Limitations of Controlling:
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i. 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.
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ii. 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.
iii. Resistance from employees: Employees often resist control and as a result effectiveness of control reduces. Employees feel
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control reduces or curtails their freedom. Employees may resist and go against the use of cameras, to observe them minutely.
iv. 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.
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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.
45. a. Planning and Controlling are the functions of the management discussed in the above paragraph. Planing is the fundamental
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management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done
and who is going to do it. It is an intellectual process which lays down organisation’s objectives and develops various
courses of action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.
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.
b. i. Love’s reply and relations between the functions of management. Planning is Looking Ahead whereas Controlling is
Looking Back: Plans are always formulated for future and determine the future course of action for the achievement of set
objectives. On the contrary, controlling is looking back because under it a manager tries to find out after the completion of
the work, whether it has been done as per the standard or not. It is thus obvious that planning looks ahead (in the future)
and controlling looks backward (in the past).
ii. Kush’s reply and relationship between the functions of management. Planning is Looking back whereas Controlling is
Looking ahead: Kush’s reply and relations between the functions of management. Planning is called looking back because
the plans are formulated on the basis of the happening in the past or on the basis of experience. On the other hand,
controlling evaluates the work done in the past but the corrective measures are taken in future. Thus, there is no denying
the fact that planning looks backward while controlling looks ahead.

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46. Yes, controlling is a systematic process which involves the following steps:
i. 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. Standards may be tangible (clear, concrete, specific, and generally
measurable) – numerical standards, monetary, physical, and time standards; and intangible (relating to human characteristics)
– desirable attitudes, high morale, ethics, and cooperation.
ii. Measure Actual Performance: Most organizations prepare formal reports of performance measurements both quantitative
and qualitative (where quantification is not possible) that the managers review regularly. These measurements should be
related to the standards set in the first step of the control process.
iii. 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

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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

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for the comparison depends upon many factors including importance and complexity attached with importance and
complexity.

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iv. Take Corrective Action and Reinforcement of Successes: 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
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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
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(modifying the standards themselves).
47. 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:
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i. Accomplishing Organizational goals: Controlling function measures progress towards organisational goals. The controlling
function measures performance towards the organisational goals and brings to light the deviations, if any, and indicates
corrective action.
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ii. Judging accuracy of standards: A good control system enables to set accurate standards. While performing the function of
controlling, a management should have a good control system which enables management to verify whether the standards set
are accurate and objective.
iii. Making efficient use of resources: A manager seeks to reduce the wastage of the resources used by exercising controlling
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functions. Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured that
no employee can delays his work performance.
48. (a) Controlling.
(b) The other steps of controlling are:
Setting performance standards: Making plans in quantative or qualitative forms.
Measurement of actual performance: Seeing the present or current performance.
Comparing actual performance with standards.
Analysing deviations: Whether positive or negative.
49. 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.

2. Measurement of Actual Performance:

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 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.

3. Comparing Actual Performance with Standards:

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

4. 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.

5. Taking Corrective Action:

The last step in the process of controlling involves taking corrective action. If the deviations are within acceptable limits, no
corrective measure is required. However, if the deviations exceed acceptable limits, they should be immediately brought to the
notice of the management for taking corrective measures, especially in the important areas.

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50. The given statement is not fully correct.

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From the point of view of Planning From the point of view of Controlling

Planning is looking ahead:

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Planning is looking ahead and is called a
forward-looking function because on this
Controlling is looking ahead:
basis the future of the company is
Controlling is a forward-looking function of management because it
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decided.
involves amendment of future plans
All plans are prepared for future and
All corrective action initiated by the management through controlling
implementation comes back to planning.
will help in improving the future performance because it involves
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All plans are based on forecasting about
removing the deviation between actual and standard performance
future conditions, which are based on
Planning is looking back:
real experiences.
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Planning is done by past experiences because a plan has to be made

Controlling is looking back:
taking past experiences in mind .
Controlling is concerned with the post-
While formulating a plan, it is important to keep in mind all previous
mortem of past activities.
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problems faced and other good or bad experiences of the past.

Planning is a backward-looking function
because as mentioned above, all
decisions are taken as per the experience.
51. The last two steps in the process of controlling function are as follows:
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i. Analysing Deviations: Some deviations in performance can be expected in all activities. Deviations in key areas of business
need to be attended more urgently as compared to deviations in certain insignificant areas. Critical point control and
Management by exception should be used by manager in this regard.
ii. Taking Corrective action: The final step in the controlling process is taking corrective action. No corrective action is required
when the deviations are within acceptable limits. However, when the deviations go beyond the acceptable range, it demands
immediate managerial attention so that deviations do not occur again and standards are accomplished.
52. Controlling is a process under which:
(i) After setting the targets actual performance is compared with the standard or planned performance.
(ii) This is done in order to identify the deviations or difference between the two.
(iii) Finally, the aim of doing controlling is to remove these deviations after identifying the causes and taking action to correct or
match the actual and planned performance.
53. Controlling helps in achieving better coordination- Controlling facilitates decentralisation and delegation of authority. In the
context of pre-determined goals, controlling keeps all activities and efforts within their fixed boundaries and makes them move
towards common goals through coordinated directives. The top executives get the feedback information constantly which helps
them to ensure that the decisions taken at the lower levels are consistent with the policies of the enterprise.
Controlling helps in achieving better planning- Under planning, the work to be done, the persons of departments who have to
do it, the time limit within which it has to be completed, the costs to be incurred, etc. are determined in advance. Controlling

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 reveals deficiencies in plans. Controlling tries to correct the deviations between actual results and desired results. Mistakes are
located and appropriate remedial actions are initiated. Controlling facilitates more realistic plans in the futures.
54. The relationship between planning and controlling is stated in the points below:
i. Planning provides the basis for controlling activities.
ii. Controlling ensures that planned goals are achieved efficiently and effectively. It measures the performance with the
predetermined standards and finds out the deviations if any.
iii. The causes of deviation as identified by controlling are the basis of effective future planning.
iv. Planning and controlling both are forward-looking and backward-looking.
v. Both are integral parts of an organisation and are necessary for the smooth functioning of an enterprise.
vi. Planning proceeds controlling and controlling succeeds planning.
vii. The process of planning and controlling works on Systems Approach which is "Planning → Results → Corrective Action".
55. a. The steps in the controlling process that are being followed are as follows:
i. Setting Performance Standards: The first step in the process of controlling is concerned with setting
performance standards.
ii. Measurement of Actual Performance: Once the standards have been determined, the next step is to
measure the actual performance.

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iii. Comparing Actual Performance with Standards: This step involves comparing the actual
performance with standards laid down in order to find the deviations.

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iv. Analysing Deviations: Some deviations are possible in all the activities.
b. The step which was missing is: Taking Corrective Action: The last step in the process of controlling

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involves taking corrective action.
56. Planning and controlling are inter-related to each other. Planning sets the goals for the organization and controlling ensures their
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accomplishment. Planning decides the control process and controlling provides sound basis for planning. In reality planning and
controlling are both dependent on each other. In the words of M.C. Niles, “Control is an aspect and projection of planning,
whereas planning sets the course, control observes deviations from the course, and initiates action to return to the chosen course or
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to an appropriately changed one.”
The relationship between planning and control can be explained as follows:
i. Planning Originates Controlling: In planning the objectives or targets are set in order to achieve these targets control process
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is needed. So planning precedes control.

ii. Controlling Sustains Planning: Controlling directs the course of planning. Controlling spots the areas where planning is
required.
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iii. Controlling Provides Information for Planning: In controlling the actual performance is compared to the standards set and
records the deviations, if any. The information collected for exercising control is used for planning also.
iv. Planning and Controlling are Interrelated: Planning is the first function of management. The other functions like
organizing, staffing, directing etc. are organized for implementing plans. Control records the actual performance and compares
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it with standards set. In case the performance is less than that of standards set then deviations are ascertained. Proper
corrective measures are taken to improve the performance in future. Planning is the first function and control is the last one.
Both are dependent upon each other.
v. Planning and Control are Forward-Looking: Planning and control are concerned with the future activities of the business.
Planning is always for future and control is also forward looking. No one can control the past, it is the future which can be
controlled. Planning and controlling are concerned with the achievement of business goals. Their combined efforts are to reach
maximum output with minimum of cost. Both systematic planning and organized controls are essential to achieve the
organizational goals.
57. Planning and controlling are inter-related to each other. Planning sets the goals for the organization and controlling ensures their
accomplishment. Planning decides the control process and controlling provides a sound basis for planning. In reality planning and
controlling are both dependent on each other.
The relationship between planning and control can be explained as follows:
i. Planning Originates Controlling: In planning the objectives or targets are set in order to achieve these targets control process
is needed. So planning precedes control.
ii. Controlling Sustains Planning: Controlling directs the course of planning. Controlling spots the areas where planning is
required.

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 iii. Controlling Provides Information for Planning: In controlling the actual performance is compared to the standards set and
records the deviations, if any. The information collected for exercising control is used for planning also.
iv. Planning and Controlling are Interrelated: Planning is the first function of management. The other functions like
organizing, staffing, directing etc. are organized for implementing plans. Control records the actual performance and compares
it with standards set. In case the performance is less than that of standards set then deviations are ascertained. Proper
corrective measures are taken to improve performance in the future. Planning is the first function and control is the last one.
Both are dependent upon each other.
v. Planning and Control are Forward-Looking: Planning and control are concerned with the future activities of the business.
Planning is always for future and control is also forward-looking. No one can control the past, it is the future which can be
controlled. Planning and controlling are concerned with the achievement of business goals. Their combined efforts are to reach
maximum output with the minimum of cost. Both systematic planning and organized controls are essential to achieve
organizational goals.
58. a. Maintaining command
b. Investigating deviations: Performance against standards should be measured on a forward-looking basis so that deviations can
be discovered and avoided before they happen. Appraising actual or predicted performance is relatively simple if criteria are
properly drawn and methods for determining exactly what subordinates are doing are available.

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c. Corrective Action: When deviations exceed acceptable limits, the final step in the control process is to take corrective action.
If the production objective is not met, corrective action may include employee training. It necessitates quick managerial

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attention to ensure that the deviations do not recur and that the target standard is met.
d. flexibility and a lack of resistance to change.

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59. Controlling: Controlling refers to the process of evaluation and assessment of the work done. Under the process of controlling,
standards are set for various tasks and activities. Accordingly, the various tasks and activities are evaluated against the set
standards
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Importance of controlling

1) Judging Accuracy of Standards: While performing the function of controlling, a management should have a good control
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system which enables management to verify whether the standards set are accurate and objective.
2) Controlling function Making efficient use of resources: Controlling makes it possible to use human and physical resources
efficiently. Under controlling, it is ensured that no employee can delays his work performance. In the same way, wastage in all the
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physical resources is monitored.

3) Controlling function Ensures Order and Discipline: controlling function ensures order and discipline. With its
implementation, all the unnecessary activities like theft, corruption, delay in work and uncooperative attitude are checked.
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4) Controlling Improve employee motivation: Through controlling function, an effort is made to motivate the employees. A
good control system ensures that employees know well in advance what they have to do and what are the standards of
performance on the basis of which they will be assess.
5) Controlling function helps in Accomplishing organisational goals: The controlling function measures performance towards
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the organisational goals and brings to light the deviations, if any, and indicates corrective action. It, thus, guides the organisation
and keeps it on the right track so that organisational goals can be achieved.
6) Controlling Facilitate coordination in action: Controlling provides direction to all activities and efforts for achieving
organisational goals. Every department and worker is ruled by pre-determined standards that area unit well coordinated with one
another. This ensures that overall organisational objectives area unit accomplished.
60. I. Controlling: Controlling refers to the process of evaluation and assessment of the work done. Under the process of controlling,
standards are set for various tasks and activities. Accordingly, the various tasks and activities are evaluated against the set
standards
II. Following are the first four steps involved in the controlling process:
a. Setting Performance Standards: Standards are the criteria against which actual performance would be measured.
Standards can be set in both quantitative terms (cost to be incurred, revenue to be earned, product units to be produced and
sold, time to be spent in performing a task) as well as qualitative terms (improving goodwill and motivation level of
employees). Standards set should be flexible enough to be modified, whenever required.
b. Measurement of Actual Performance: Actual performance should be measured in an objective and reliable manner.
Measurement is normally done after the task is completed but wherever possible, it should be done during the
performance.

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 There are several techniques for measurement of performance- personal observation, sample checking,
performance reports, and accounting ratios etc.
As far as possible, performance should be measured in the same units in which standards are set as this would
make their comparison easier.
c. Comparing Actual Performance with Standards: Actual performance is compared with the standards to find out the
deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.
d. Analysing Deviations: Some deviation in performance can be expected in all activities. It is, therefore, important to
determine the acceptable range of deviations. Also, deviations in key areas of business need to be attended more urgently
as compared to deviations in certain insignificant areas. After identifying significant deviations in key result areas, these
deviations need to be analysed for their causes.
61. Controlling: Controlling refers to the process of evaluation and assessment of the work done. Under the process of controlling,
standards are set for various tasks and activities.
i. Controlling is a goal-oriented function as it ensures that an organisation's resources are being used effectively and efficiently
Jor the achievement of pre-determined goals.
ii. Controlling is a pervasive function as it is required in all types of organisations and at all levels of management-top, middle
and lower.

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iii. Controlling is a continuous function as it involves a constant review of actual performance to ensure that activities in the
organisation are performed as per the plans. Controlling is not the last function of management. It brings back the

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management cycle back to the planning function. It helps in formulation of future plans in the light of the problems identified
in the past and, thus, helps in better planning in the future periods.

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iv. Controlling is both looking back and forward looking.
62. The company should follow these steps in a systematic manner:
i. Setting performance standards: Standards are, by definition, simply the criteria of performance. They are the selected points in
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an entire planning program at which performance is measured so that managers can receive signals about how things are going
and thus do not have to watch every step in the execution of plans. Standard elements form precisely worded, measurable
objectives and are especially important for control.
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ii. Measurement of actual performance: The measurement of performance against standards should be done on a forward-looking
basis so that deviations may be detected in advance of their occurrence and avoided by appropriate actions. If standards are
appropriately drawn and if means are available for determining exactly what subordinates are doing, appraisal of actual or
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expected performance is fairly easy. But there are many activities for which it is difficult to develop accurate standards, and there
are many activities that are hard to measure.
iii. Determining whether Performance Matches the Standard: It is an easy but important step in the control process. It involves
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comparing the measured results with the standards already set. If performance matches the standard, managers may assume that
“everything is under control”. In such a case the managers do not have to intervene in the organization’s operations.
iv. Taking Corrective Action: This step becomes essential if performance falls short of standards and the analysis indicates that
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corrective action is required. The corrective action could involve a change in one or more activities of the organization’s
operations. Control can also reveal inappropriate standards and in that case, the corrective action could involve a change in the
original standards rather than a change in performance. It needs to be mentioned that, unless managers see the control process
through to its conclusion, they are merely monitoring performance rather than exercising control. The emphasis should always be
on devising constructive ways to bring performance up to a standard rather than on merely identifying past failure.
63. Planning and controlling both are necessary to achieve the organizational objectives. Controlling is important because of the
following reasons:
i. Accomplishing organizational goals: Controlling plays an important role in the achievement of organizational goals.
Organizational goals can be achieved only if all activities are going according to the plan. Through controlling managers
ensure that all activities are taking place according to the plan and also measure that an organization is progressing towards its
goals. If there is any deviation, they take corrective action. In this way, controlling is helpful in achieving the goals of the
organisation.
ii. 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.
64. a. Controlling.

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 b. i. Setting Performance Standards: The first step in the process of controlling is to establish the standards of performance.
Standards are the target against which actual performance is evaluated. They specify what should be achieved. Standards
can be set in both quantitative as well as qualitative terms.
ii. Measurement of Actual Performance: Once the standards of performance are fixed, the next step is the measurement of
actual performance. It means the evaluation of the work actually done and the results accomplished. The various
techniques for measuring performance are personal observation, sample checking, performance reports, etc.
65. Controlling is the function which is being mentioned in the statement.
Importance of controlling are :
1. Accomplishing organizational goals: The process of controlling helps in accomplishing organizational goals or objectives.
The controlling guides the activities of subordinates in achieving the goals. It ensures the use of human and material resources
in the best possible manner so that there may be predetermined objectives of the organization.
2. Judging accuracy of the standards: A manager compares the actual work performance with the standards while performing
the function of controlling. He tries to find out whether the accuracy of the standards is not more or less than the general
standards. In case of the needs, they are redefined.
3. Improves efficiency: The organization sets the goal for future which is not certain. So, controlling is the way which focuses
on uncertainty and to attain the goals. Regular control shows the deviation in plan and actual achievement which helps to keep

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the staffs on the right track.
4. Improve employee motivation: Motivation is defined as the process of inspiring someone for doing something. Controlling

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makes all the employees to work with complete dedication as they know that their work performance will be evaluated. Their
identity will be established if the progress report is satisfactory in the organization.

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5. Ensuring order and discipline:The implementation of controlling help to check all the undesirable activities like theft,
corruption, delay in work and uncooperative attitude. Controlling ensures order and discipline, Ensuring order and discipline
is also one of the importance of controlling.
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66. i. The two features of controlling highlighted in the above situation are explained below:
a. Goal-oriented: Controlling insurance that the resources of the organizations are being used in the most effective and
efficient manner to achieve the predetermined goals.
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b. Pervasive: Controlling is a pervasive function. It is the primary function of all the managers. The managers at all levels-
top, middle and lower have to perform this activity.
ii. The importance of controlling is highlighted in the following points:
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a. Controlling helps to achieve the desired objectives. and measure the progress towards them. If there is any deviation, the
manager may take corrective actions. It keeps management on the right track.
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b. It helps to identify whether or not the standards set are accurate. It keeps a check on the changes taking place in the
organisation. It helps to revise the standards set in the context of these changes.
c. The usage of the resources can be controlled and its wastage and spoilage can be reduced. It helps in the optimum
utilisation of resources.
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d. It ensures that employees know what they are expected to do and what are the standards of performance on the basis of
which they will be appraised. It motivates them and helps to contribute positively to the organization.
67. Steps involved in the process of control are:
Step 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 the efforts of the entire organisation are directed. These
standards can be expressed both in quantitative and qualitative terms.
Step 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 the 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 a company’s performance.
c. Progress made in areas like marketing can be measured by considering the number of units, increase in market share etc

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 Step 3:- Comparing actual performance with standards: This step involves a comparison of actual performance with the
standard. Comparison between actual performance and standard will reveal the deviation between actual and desired results.
Deviation means the difference between actual performance and standard performance. If actual performance is matching with the
standards then the controlling function ends there only. But if there is mismatch or deviation between actual performance and the
standard then the manager tries to find out the reasons for deviation. It is easier to compare the actual performance with the
standard when standards are set in quantitative terms.
Step 4:- Analysing deviation: Analysing deviation means identifying the reasons of difference or deviations, which may be
defective material, defective machinery, defective physical conditions of work etc. It is important to determine the acceptable
range of deviations, say 5%. It means minor or very small deviations should be ignored, for example, 3 units less produced by
David.
Step 5:- Taking corrective action: Taking corrective action is the final step in the controlling process. If deviations are within the
acceptable limits, then no need to take corrective action. But if deviations go beyond the acceptable range, especially in the critical
areas, it requires immediate action so that it will not take place again. Corrective action might involve; Training to employees,
Additional workers and equipment, Overtime work, Modify the existing process and Technology up-gradation.
68. i. The concept of management which is highlighted in the above case is ‘limitations of controlling’. The term control has
different connotations depending upon the context of the use of the term. In manufacturing it refers to a Device or mechanism

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installed or instituted to guide or regulates the activities or operation of an apparatus, machine, person, or system; in law it
refers to controlling interest and in management as an authority to order and manage the workings and management of an

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entity.
ii. The different limitations of controlling highlighted in the above case are:

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a. Difficulty in Setting Qualitative Standards: It is important to note that the setting of standards is possible if the nature of
the work is quantitative but in respect of work which is qualitative in nature, the setting of standard is rather difficult and,
therefore, for their measurement the help of some indirect standards is taken.
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b. No Control over External Factors: It will not be true to say that a manager by completing the function of controlling will
be able to establish complete discipline in the organisation. A manager can control internal factors (like manpower,
material, machine, etc.) but it is impossible to control the external factors (like government policies, technical changes,
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competition, etc.) Therefore, a situation of absolute discipline cannot be established.
c. Resistance from Employees: The business environment undergoes a constant change. Latest techniques of controlling
have to be used in order to face this change. However, the employees oppose these techniques.
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d. Costly Affair: In order to implement the process of controlling a lot of money, time and efforts are required. Small
organisations cannot bear such expenditure. Therefore, they are useful for only big organisations and for the small
organisations they are simply a luxury. The managers should employ only those controlling techniques which yield profit
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more than their costs.

69. a. Analysing deviation and taking corrective action are being discussed in the above lines.
b. Since it may neither be economical nor easy to monitor each and every activity in the organization, therefore, every
organization identifies and states its specific key result areas (KRAs) or critical points that require tight control are likely to
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have a significant effect on the working of the business. Any deviations on these points are attended to urgently by the
management.
c. The two points that highlight the importance of the controlling function are listed below:
i. Accomplishing organizational goals: The controlling function helps in accomplishing organizational goals by constantly
monitoring the performance of the employees and bringing to light the deviations, if any, and taking appropriate corrective
action.
ii. Making efficient use of resources: The controlling function enables the managers to work as per predetermined
standards. This helps to avoid any ambiguity in business operations and reduce wastage and spoilage of resources in the
organization.
70. a. Controlling is the function of management being performed by the quality assurance team of 'Taste Buds Ltd.' Controlling is
the process of ensuring that events conform to plans.
b. The statement "records and analyses the deviations and takes the necessary corrective actions" refer to the following steps
involved in the process of controlling:
i. Comparing the actual performance with the standards: The actual performance is compared with the standards and
deviations, if any, are recorded.
ii. Analyzing deviations: Once the deviations are identified, it is important to analyze them through:

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 1. Critical point control: All the deviations may not be significant. Moreover, it may not be either economical nor easy to
monitor each and every activity in the organization. Therefore, every organization identifies and states its specific key
result areas (KRAs) or critical points that require tight control as they are likely to have a significant effect on the
working of the business.
2. Management by exception: Management by exception is the principle of management control which is based on the
belief that if you try to control everything, you may end up controlling nothing. Therefore, only significant deviations
that go beyond the permissible limits should be brought to the notice of the management.
iii. Taking corrective action: The last step in controlling process involves taking corrective action whenever the deviation
occurs beyond the permissible limits so that they do not reoccur in the future. However, the standards may be revised if it
is not possible to check deviations through corrective action.
71. According to Philip Kotler, "Control is the process of taking steps to bring actual results and desired results closer together."
The relationship between planning and controlling functions of management is given below:
i. Planning is Meaningless without Controlling: It is true as the controlling ensures that everything is going on as laid down in
the plans.
ii. Controlling is Blind without Planning: It is true as controlling takes place on the basis of a standard developed by planning.
iii. Planning is Prescriptive whereas, Controlling is Evaluative: Planning Prescribes an appropriate course of action for

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achieving objectives whereas controlling evaluates whether decisions have been translated into desired results.
iv. Planning and Controlling both are Forward-Looking: On the one hand, plans are always formulated for the future and on

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the other hand, controlling also takes corrective action for the future.
v. Planning and Controlling both are Looking Back: On the one hand, planning is formulated on the basis of past experience

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and on the other hand, controlling is like a postmortem of past activities.
72. The importance of controlling :
i. Accomplishing organisational goals The controlling function measures the performance against the pre-determined and
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corrects deviations. This helps in ensuring that the organisation is moving on the right track to achieve the organisational
goals. 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.
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In other words, by controlling. the manager ensures that resources are obtained and used economically and efficiently for the
achievement of organisational objectives.
ii. Judging accuracy of standards While performing the function of controlling, a manager compares the actual work
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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.
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iii. 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 pre-determined standards and norms. This ensures that resources are used m the most
effective and efficient manner.
iv. It improves employees' morale The implementation of controlling makes all the employees work with complete dedication
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because they are aware that their performance will be evaluated and they will have a chance to build their reputation in the
organisation. The employees who show good performance are rewarded by giving them promotions. cash prizes. etc.
v. It helps in better performance Planning and controlling are closely inter-related as the real test of planning is controlling
Control reveals deficiencies and deviations, suggests corrective actions for prevention of deviations and deficiencies through
modified planning.
vi. Facilitates coordination Control keeps all activities and efforts within their fixed boundaries and makes them move towards
the set goals. Thus, control facilities coordination It provides unity of direction. 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.
73. The name of this function of management is '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.
i. Establishing goals and standards:: The task of fixing goals and standards takes place while planning but it plays a big role
in controlling also. This is because the main aim of controlling is to direct a business’s actions towards its goals. If the
members of an organization know their goals clearly, they will invest their entire focus in achieving them. It is very important
for managers to communicate their organization’s goals, standards and objectives as clearly as possible. There must never be
ambiguities amongst employees in this regard. If everybody works towards common goals, it becomes easier for an

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 organization to flourish. The goals that managers have to set and work towards may be either tangible/specific or
intangible/abstract. Tangible goals are those which are easy to quantify in numerical terms. On the other hand, intangible goals
are those which are not quantifiable numerically. For example, a company may aim to win some prestigious award for its
corporate social responsibility activities.
ii. Measuring actual performance against goals and standards:: Once managers know what their goals are, they should next
measure their actual performance and compare. This step basically helps them in knowing whether their plans are working as
intended.: After implementing a plan, managers have to constantly monitor and evaluate them. They must always be ready to
take corrective measures if things are not working properly. In order to do this, they should keep comparing their actual
performance with their ultimate goals. Apart from taking corrective action, this step of process control also helps managers in
predicting future problems. This way they can take measures immediately and save their business from losses. In order to
compare their actual performance, managers first have to measure it. They can do so by measuring results in monetary terms,
seeking customer feedback, appointing financial experts, etc. This can often become difficult if managers want to measure
intangible standards like industrial relations, market reputation, etc.
iii. Taking corrective action:: In case there are discrepancies between actual performances and goals, managers need to take
corrective actions immediately. Timely corrective actions can reduce losses as well as prevent them for arising in the future
again. Sometimes, business organizations formulate default corrective actions in the form of policies. This, however, can be
difficult to do when it comes to complicated problems. In such cases, managers need to first quantify the defect and prepare a

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course of action to remedy it. Sometimes, they may have to take extraordinary measures for unpredictable problems.

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iv. Following up on corrective action: Just taking corrective measures is not enough; managers must also take them to their
logical conclusion. Even this step requires thorough evaluations and comparisons. Managers should stick to the problem until
they solve it. If they refer it to a subordinate, they must stay around and see to it that he completes the task. They may even

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mentor him personally so that he may be able to solve such problems by himself later.
74. Planning and controlling are inseparable twins of management. Planning and controlling functions always co-exist or have to exist
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together as one function depends on the other. The relationship between planning and control can be divided into the following
two parts:
i. Interdependence between Planning and Controlling
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ii. Difference between Planning and Controlling.
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
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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.
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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.
Ed

Planning and controlling are integral parts of an organization as both are important for smooth running of an enterprise.
Planning and controlling reinforce each other. Each drives the other function of management.
Therefore, planning involves looking ahead and is called a forward looking function. On the contrary, controlling is like a
postmortem of past activities to find out deviations from the standards. In that sense, controlling is a backward-looking function.
However, it should be understood that planning is guided by past experiences and the corrective action initiated by control
function aims to improve future performance. Thus, planning and controlling are both backward-looking as well as a forward-
looking function.
75. a. Controlling is the function of management which helps in finding out that the actual performance of a worker is less than the
set target. 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.
The steps involved in the controlling function of management which help in finding out that the actual performance of a
worker is less than the set target are outlined below:
i. 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.

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 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.
Standards may be tangible (clear, concrete, specific, and generally measurable) – numerical standards, monetary, physical,
and time standards; and intangible (relating to human characteristics) – desirable attitudes, high morale, ethics, and
cooperation.
ii. Measure Actual Performance:
Most organizations prepare formal reports of performance measurements both quantitative and qualitative (where
quantification is not possible) that the managers review regularly. These measurements should be related to the standards
set in the first step of the control process.
iii. 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

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most appropriate and practical to keep insignificant deviations away. Timetable for the comparison depends upon many

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factors including importance and complexity attached with importance and complexity.
iv. Take Corrective Action and Reinforcement of Successes:
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

corrective action.
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their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step—

The corrective action may be to maintain status quo (reinforcing successes), correcting the deviation, or changing
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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).
b. In order to complete the process of controlling and to ensure the performance as per time and motion studies the manager has
to further take the following two steps:
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i. Analyzing deviations through critical point control and management by exception approach: In the given situation,
there is a deviation in output in the range of 25-50 units per worker. The manager should analyse the reasons for the same.
The possible reasons for the same are:
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The workers are not well versed with the production process.
The working environment is not conducive to efficient working.
The raw materials and other equipment are not available on time.
ii. Taking corrective action: The deviations require immediate management attention so that they do not reoccur in future.
Ed

Therefore, the manager should take appropriate corrective action after analyzing the situation like providing training to
workers, improving the work environment, and ensuring timely availability of the raw materials and other equipment.

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