Controlling
1. Explain how controlling helps in
(i) accomplishing organisational goals.
(ii) judging accuracy of standards.
View AnswerAns. i) Accomplishing Organisational Goals The controlling function measures the accomplishment against the standards and corrects deviations. This helps in ensuring that organisation is moving on the right track to achieve organisational goals.
(ii) Judging Accuracy of Standards A sound controlling system helps the management to verify whether the standards set are accurate and relevant or not. It keeps a careful check on the changes, which are taking place in the organisation.
2. Vikas was the chief operation officer of ‘Yalet Ltd’. a company providing advanced software solutions of Indian Defence Services. They had been carrying on business successfully for the last twelve years and earning enough profits. But from the last one year, they realised that though the business is getting big orders which are being fulfilled in time, even then the revenues kept on decreasing. Vikas was not able to find out where the problem was. He started keeping a close check on the progress of activities as he could sense that something was wrong. He wanted to take some action before any major damage could be done to the business. Vikas appointed a cyber-security expert who monitored the company’s processes and found out that the computer operator was deleting the entries from the computers and pocketing the revenues. He was caught and handed over to the police. This created an atmosphere of order and discipline in the organisation and helped in minimising dishonest behaviour on the part of the employees.
(i) Identify the function of management highlighted in the above paragraph.
(ii) Explain any three other ways in which this function of management may help the organisation.
View AnswerAns. (i) The function of management highlighted here is controlling.
(ii) Controlling help the organisation in following ways
(a) 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.
(b) 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.
(c) 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 utilisation of resources.
3. ‘AS Ltd’ is a large company engaged in assembly of air-conditioners. Recently, the company had conducted the ‘time’ and ‘motion’ study and 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. The company is providing attractive allowances to reduce labour turnover and absenteeism. All the workers are happy. Even then the assembly of air-conditioners per day is 800 units only.
To find out the reason, the company compared actual performance of each worker and observed through CCTV that some of the workers were busy in gossiping.
(i) Identify the function of management discussed above.
(ii) State those steps in the process of the function identified which are discussed in the above paragraph.
View AnswerAns. (i) Controlling function
(ii) Steps in the process of control discussed above are as follows
Step 1 Setting Performance Standards Through ‘time’ and ‘motion’ study, an average worker can assemble 10 air-conditioners in a day. On this basis, target volume of 1,000 units per day is set.
Step 2 Measurement of Actual Performance Assembly per day is 800 units.
Step 3 Comparison of Actual Performance with Standards The company compared actual performance of each worker.
Step 4 Analysing Deviations Observed through CCTV that some of the workers were busy in gossiping.
4. Give the meaning of ‘controlling’. Explain the steps in the process of controlling.
View AnswerAns. Controlling refers to the process of measurement of performance according to standards, measuring deviations and taking corrective action to achieve pre-determined goals. In order to seek results, manager must exercise effective control over the workers. Following are the steps in the controlling process
(i) Setting Performance Standards: The first step in the process is the establishment of standards of performance. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks or yardsticks towards which an organisation strives to work.
(ii) Measurement of Actual Performance: Once the standards are fixed, the next step is to measure the actual performance. Generally, it is conducted by the managers to analyse the overall efficiency level of the employees. While measuring the performance, objective and reliable methods should be used, such as sample checking, preparing reports, personal observation, etc.
(iii) Comparing Actual Performance with Standards: This step involves comparison of actual performance with the standard. Such comparison helps in revealing the deviations between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.
(iv) Analysing Deviations: Under this step, deviations in key areas of business need to be attended on urgent basis as compared to deviations in certain insignificant areas. There is a need to determine the acceptable range of deviations in all operational areas. Following points should be kept in mind, while analysing deviations
(a) Critical Point Control: According to this principle, control system should first focus on Key Result Areas (KRAs) which are critical to the success of the organisation. Therefore, if anything goes wrong at the critical points or key areas, immediate action should be taken.
(b) Management/Control by Exception: It suggests that, if manager tries to control everything, he may end up in controlling nothing. Thus, he should first handle the significant deviations, which require his priority.
(v) Taking Corrective Action: This is the final step in which manager takes corrective measures to bring back everything on track in the organisation. After the deviations and their causes are analysed, the task is to remove the hurdles from the actual work plan. The purpose of this step is to bring the actual performance up to the level of expectations by taking corrective measures.