NCERT Class 12 Business Studies Controlling

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The example of Sterling Courier brings out clearly how an adverse business situation may intelligently corrective action before any major damage is done to the business. Controlling function of management comes to the rescue of a manager here. It not only helps in keeping a track on the progress of activities but also ensures that activities conform to the standards set in advance so that organisational goals are achieved. Meaning of 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 otherwords, controlling means ensuring that activities in an organisation are performed as per the plans.

Controlling also ensures that an organisation’sresources are being used effectively and efficiently for the achievement of predetermined goals. Controlling is, thus, a goal-oriented function. Controlling function of a manager is a pervasive function. It is a primary function of every manager. Managers at all levels of management- top, middle and lower-need to perform controlling functions to keep a  control over activities in their areas.Moreover, controlling is as much required in an educational institution,  military, hospital, and a club as in any business organisation

Controlling should not be misunderstood as the last function of management. It is a function that brings back the management cycle back to the planning function. 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 on the same. This process helps in formulation of future plans in the light of the problems that were identified and, thus, helps in better planning in the future periods.

Thus, controlling only completes one cycle of management process and improves planning in the next cycle. Importance of Controlling Control is an indispensable function of management. Without control the best of plans can go awry. A good control system helps an organisation in the following ways:

(i) Accomplishing organisational goals: The controlling function measures progress towards 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 might be achieved.

(ii) Judging accuracy of standards: A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organisation and in the environment and helps to review and revise the standards in light  of such changes

(iii) Making efficient use of resources: By exercising control, a manager seeks to reduce wastageand spoilage of resources. Each activity is performed in accordance with predetermined standards and norms. This ensures that resources are used in the most effective and efficient manner.

Multiple Choice

For the following, choose the right answer.

1. An efficient control system helps to

    (a) Accomplishes organisational objectives

    (b) Boosts employee morale

    (c) Judges accuracy of standards

    (d) All of the above

2. Controlling function of an organisation is

    (a) Forward looking

    (b) Backward looking

    (c) Forward as well as backward looking

    (d) None of the above

3. Management audit is a technique to keep a check on the performance of

   (a) Company

   (b) Management of the company

   (c) Shareholders

   (d) Customers

4. Budgetary control requires the preparation of

   (a) Training schedule

   (b) Budgets

   (c) Network diagram

   (d) Responsibility centers

5. Which of the following is not applicable to restorability a courting

   (a) Investment center

   (b) Andocentric center

   (c) Profit center

   (d) Cost center

Short Answer Type

1. Explain the meaning of controlling.

2. ‘Planning is looking ahead and controlling is looking back.’ Comment.

3. ‘An effort to control everything may end up in controlling nothing.’ Explain.

4. Write a short note on budgetary control as a technique of managerial control.

5. Explain how management audit serves as an effective technique of controlling.

Long Answer Type

1. Explain the various steps involved in the process of control.

2. Explain the techniques of managerial control.

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

4. Discuss the relationship between planning and controlling.

Application Type

Following are some behaviours that you and others might engage in on the job. For each item, choose the behaviour that management must keep a check to ensure an efficient control system.

1. Biased performance appraisals

2. Using company’s supplies for personal use

3. Asking a person to violate company’s rules

4. Calling office to take a day off when one is sick

5. Overlooking boss’s error to prove loyalty

6. Claiming credit for someone else’s work

7. Reporting a violation on noticing it

8. Falsifying quality reports

9. Taking longer than necessary to do the job

10. Setting standards in consultation with workers

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