GSEB Class 12 Organization of Commerce and Management Solutions Chapter 7 Controlling

1. Select the correct alternative and write answer to the following questions:

 

Question 1. Which function of the management process sees that the work is performed according to planning?
(A) Organizing
(B) Training
(C) Directing
(D) Controlling
Answer: (D) Controlling
In simple words: Controlling is the management function that checks if work is being done as planned and takes corrective action if needed.

Exam Tip: Remember that controlling acts as a feedback mechanism, ensuring plans are implemented effectively.

 

Question 2. Controlling is not a __________ process.
(A) Continuous
(B) Internal
(C) Rigid
(D) Dynamic
Answer: (C) Rigid
In simple words: Controlling is not stiff or inflexible; it changes based on what happens and how things develop.

Exam Tip: Understand that effective controlling must adapt to changing circumstances, making it dynamic rather than rigid.

 

Question 3. __________ is the process of maintaining balance between efforts and results and between resources and objectives.
(A) Directing
(B) Staffing
(C) Co-ordinating
(D) Controlling
Answer: (D) Controlling
In simple words: Controlling helps keep efforts, results, resources, and goals aligned and balanced.

Exam Tip: Focus on the concept of 'balance' and 'alignment' as key aspects of controlling's definition.

 

Question 4. Controlling takes place at __________ level.
(A) Every
(B) Top
(C) Middle
(D) Bottom
Answer: (A) Every
In simple words: Controlling is done at all levels of management, from top executives to supervisors.

Exam Tip: Emphasize that controlling is a pervasive function, meaning it's carried out throughout the organization, not just at one level.

 

Question 5. Which is not the function of controlling?
(A) Progress of activities
(B) Comparison with set standards
(C) Determining objectives
(D) Getting information about deviations
Answer: (C) Determining objectives
In simple words: Setting goals is part of planning, not controlling. Controlling focuses on achieving those goals.

Exam Tip: Clearly differentiate between planning (setting objectives) and controlling (ensuring objectives are met).

 

Question 6. Which function of management is known as the father of controlling?
(A) Organizing
(B) Staffing
(C) Directing
(D) Planning
Answer: (D) Planning
In simple words: Planning is called the father of controlling because you can't control something if you haven't planned it first.

Exam Tip: Highlight the direct cause-and-effect relationship: without planning, there's nothing to control.

 

Question 7. __________ is the last function of management.
(A) Planning
(B) Organizing
(C) Staffing
(D) Controlling
Answer: (D) Controlling
In simple words: Controlling comes at the end of the management cycle, after all other functions have taken place.

Exam Tip: Remember the management cycle: Planning, Organizing, Staffing, Directing, Controlling – with controlling as the final step leading back to new planning.

 

Question 8. __________ is the first stage of the controlling process.
(A) Measuring performance
(B) Comparing actual performance against set standards
(C) Corrective action
(D) Setting standards
Answer: (D) Setting standards
In simple words: The first step in controlling is to decide what needs to be achieved or how things should be.

Exam Tip: List the steps of the controlling process in order to ensure you remember the first crucial stage.

 

Question 9. After knowing the deviations, what type of measures does the management take?
(A) Gives training
(B) Removes the staff
(C) Corrective action
(D) Appoint experts
Answer: (C) Corrective action
In simple words: Once problems or differences are found, management takes steps to fix them.

Exam Tip: Understand that the ultimate goal of identifying deviations is to implement actions that bring performance back on track.

 

Question 10. What should be done when the organization obtains better results than set standards?
(A) Improve and set lower standards
(B) Improve and set higher standards
(C) No change in set standards
(D) To remove standards
Answer: (B) Improve and set higher standards
In simple words: If results are better than expected, the organization should aim even higher for future goals.

Exam Tip: Recognize that controlling isn't just about fixing underperformance but also about capitalizing on success by raising future targets.

2. Answer the following questions in one sentence each:

 

Question 1. With which functions of management is planning closely related?
Answer: Planning is closely related to the controlling function of management.
In simple words: Planning is very closely connected to controlling.

Exam Tip: Mention the direct link between planning and controlling as two sides of the same coin.

 

Question 2. At which level of management function does controlling take place?
Answer: Controlling takes place at all levels of management.
In simple words: Controlling happens at every single level of management.

Exam Tip: Stress that controlling is a universal function, essential for all managers regardless of their hierarchy.

 

Question 3. Before which fuention must all functions of management be performed?
Answer: All functions of management must be performed before controlling.
In simple words: All other management tasks must be done before controlling.

Exam Tip: Explain that controlling is a concluding function, evaluating the output of planning, organizing, staffing, and directing.

 

Question 4. Why is it necessary to measure performance?
Answer: Measuring performance is necessary to know whether the processes are performing as per the set standards and control limits.
In simple words: We measure performance to see if work is meeting the set goals and rules.

Exam Tip: Highlight that measuring performance provides the crucial data needed for comparison in the controlling process.

 

Question 5. What is deviation?
Answer: The difference between actual figures as compared to the planned figures is called deviation. Statistically, it is called variance.
In simple words: Deviation is the gap between what was planned and what actually happened.

Exam Tip: Clearly define deviation as the gap or difference between expected and actual outcomes.

 

Question 6. Which external factors jeopardize the very existence of a business?
Answer: External factors such as government policy, competition, changes in market scenario, inflation, shortage of raw material, preferences of people, and changes in fashion can jeopardize the very existence of a business.
In simple words: Things like new government rules, rivals, market changes, rising costs, lack of materials, public tastes, and fashion can threaten a business.

Exam Tip: Provide a diverse list of external factors, including economic, political, social, and competitive elements, to show a comprehensive understanding.

3. Answer the following questions in short:

 

Question 1. Give the meaning of controlling.
Answer:
Controlling means deciding the activities to be carried out, evaluating them, and, if required, taking corrective measures to ensure they conform to the plan developed by the organization. It is the last step in the management process, though it begins as soon as activities are assigned in the planning stage. According to Peter F. Drucker, controlling aims to maintain a balance between efforts and results, and between resources and objectives.
Controlling involves:
Checking the progress of managerial tasks.
Comparing them with the standards set by the organization.
Identifying deviations between organizational standards and actual work.
Removing such deviations by taking corrective actions.
In simple words: Controlling means checking if work matches the plan, then fixing any problems to achieve goals. It balances efforts, results, resources, and objectives.

Exam Tip: Include Peter F. Drucker's definition and break down the core functions of controlling: checking, comparing, identifying, and correcting.

 

Question 2. 'Controlling is a continuous process' - Explain.
Answer:
Controlling is an ongoing process that never ends. It is incorrect to believe that once control is exercised, activities will always follow the plan. Deviations from the set plan can occur at any level and at any time, requiring the organization to constantly supervise and control activities. In the controlling function, quality control and cost control are crucial activities that need continuous monitoring.
In simple words: Controlling never stops because problems can always come up at any time or level. It needs constant checks to keep things on track.

Exam Tip: Emphasize that controlling is cyclical and adaptive, constantly monitoring and adjusting, rather than a one-time event.

 

Question 3. How is controlling an internal process?
Answer:
Controlling is an internal process for the organization. The control system plays an integral role in all important internal activities such as production, sales, purchase, financial matters, financial accounts, and employee working methods. Since these activities are part of the business, they can be controlled. External factors like changes in government policy, economic depression, inflation, and public psychology cannot be controlled by the organization, making controlling an internal focus.
In simple words: Controlling is an internal process because it deals with things inside the company like production, sales, and employee work. Outside factors like government rules or inflation cannot be controlled by the business.

Exam Tip: Clearly distinguish between internal factors (controllable) and external factors (uncontrollable) to explain why controlling is an internal process.

 

Question 4. 'Controlling is a dynamic process' - Explain.
Answer:
Controlling is a dynamic process because, although what and how to control is initially decided during planning, the control parameters can change continuously based on situations. If the organization identifies deviations, it makes quick decisions to adjust its control methods and normalize processes. This shows that despite being a planned function, controlling is flexible and adapts to changes.
In simple words: Controlling is dynamic because even though it's planned, the way it's done can change often to handle new situations and fix problems quickly.

Exam Tip: Connect the idea of "dynamic" with flexibility, adaptation, and quick decision-making in response to changing conditions.

 

Question 5. 'Planning is the father of controlling' - Explain.
Answer:
Planning is considered the father of controlling because controlling exists only due to planning. Controlling checks activities decided during the planning phase. Without planning, there would be no standards or objectives to control against. Therefore, controlling cannot function without planning.
In simple words: Planning is called the father of controlling because you need a plan first before you can check if things are going according to that plan. Without planning, there's nothing to control.

Exam Tip: Emphasize that planning provides the blueprint or framework against which controlling measures actual performance.

4. Answer the following questions in brief:

 

Question 1. Explain the relation between planning and controlling.
Answer:
Planning is a systematic and intellectual method to achieve objectives, clarifying what activities are needed and what resources will be used. Controlling, on the other hand, monitors if business activities are carried out according to the plan, standards, and instructions. If deviations are found, corrective actions are taken. Therefore, planning and controlling are interrelated; whenever there is planning, there is controlling, and vice versa. They are interdependent.
In simple words: Planning sets the goals and how to reach them. Controlling then checks if those goals are being met and fixes problems. They are linked because you can't control without a plan, and planning needs controlling to make sure it works.

Exam Tip: Explain both functions separately before highlighting their strong interdependence and cyclical relationship in management.

 

Question 2. 'Planning and controlling are two sides of the same coin' - Explain.
Answer:
Planning and controlling are crucial and interdependent functions of management. The success of planning relies heavily on controlling. Controlling identifies deviations, takes corrective action, and keeps business activities aligned with the decided direction. Conversely, controlling only becomes relevant when something has been planned. If there is no plan, there is no need for control. Thus, planning and controlling are inseparable, like two sides of the same coin.
In simple words: Planning and controlling are like two parts of one whole. Planning sets the path, and controlling makes sure we stay on that path. Without one, the other can't really work.

Exam Tip: Use the "two sides of the same coin" analogy effectively, illustrating how each function supports and completes the other.

 

Question 3. 'Controlling is not a negative function.' - Justify the statement.
Answer:
A common perception is that controlling involves constant monitoring, limiting individual freedom and creating fear. This view originated from older management systems with strict supervision. However, the real objective of controlling is not to instill fear but to encourage innovation and quality production. Systematic controlling reduces mistakes, improves quality, and boosts productivity. It also helps employees learn from errors and enhance their efficiency. Therefore, controlling is a positive and constructive function, not negative.
In simple words: Controlling isn't about being strict or scaring people. It actually helps reduce mistakes, improves work quality, encourages new ideas, and helps employees get better at their jobs. So, it's a helpful and positive tool.

Exam Tip: Counter the negative perception of controlling by emphasizing its constructive aspects like improvement, learning, and fostering innovation.

 

Question 4. Is controlling an end activity of management? Why?
Answer:
Yes, controlling is an end activity of management. In the management process, planning decides objectives, organizing implements them, and directing provides guidance. After these functions are performed, the actual role of controlling begins. It evaluates whether the outcomes align with the initial plans and takes corrective actions if necessary. Thus, all other managerial functions must be completed before control is exercised, making it the final activity in the management cycle.
In simple words: Yes, controlling is the last step in management. It starts only after planning, organizing, and directing are done, because it checks if everything worked out as planned.

Exam Tip: Explain the sequential nature of management functions, positioning controlling as the concluding function that closes the loop.

5. Answer the following questions in detail:

 

Question 1. Explain the characteristics of controlling giving its meaning.
Answer:
Meaning of Controlling:
In simple terms, controlling means deciding the activities to be carried out, evaluating them, and taking corrective measures when needed to ensure they align with the organization's plan. It is the final step in the management process. However, the function of controlling begins as soon as activities are assigned during the planning stage. Peter F. Drucker defined controlling as maintaining a balance between efforts and results, and between resources and objectives.

Characteristics of controlling:
1. Controlling is related to planning:
Planning and controlling are interdependent. Planning sets the stage by creating the plan, while controlling ensures that activities are performed according to this plan. They are often called twins because without planning, there is no basis for controlling.
2. Functions at every level of management:
Controlling is performed at all levels, not just one department. Managers at each level control their subordinates. Even at the lowest level, supervisors systematically control their workers.
3. Continuous process:
Controlling is an ongoing process that never ends. Deviations from plans can happen at any time and level, so constant supervision and control are needed. Key activities like quality and cost control require continuous monitoring.
4. It is an end activity of management:
In the management process, planning sets objectives, organizing implements them, and directing guides. Controlling begins after these functions are completed. It is crucial that all other managerial functions are performed before control is exercised, making it the final activity.
5. Related to future:
Controlling, though often done daily, aims to minimize future deviations and errors so that products or services meet planned standards. It helps managers learn from past mistakes and prevent them from recurring, reducing errors, waste, and losses in the future.
6. It is a constructive activity:
The goal of control is not to impose fear but to ensure workers perform as planned and are guided to overcome mistakes. It's a positive activity that promotes innovation, quality production, reduces errors, and improves productivity and efficiency.
7. Internal process:
Controlling is an internal process, playing a vital role in all key organizational activities like production, sales, finance, and employee methods. These internal activities are controllable. External factors such as government policy, economic changes, or public psychology are beyond the organization's control.
8. Dynamic process:
Although planning pre-decides what and how to control, the control parameters can change with situations. If deviations are found, quick decisions are made to adjust control methods and normalize processes. This shows controlling is a planned yet flexible function.
9. Controlling is a person-oriented or subjective activity:
Controlling focuses on improving the activities of workers, by the workers, and for the workers. Therefore, the "person" is central to the controlling process.
10. Controlling can be formal or informal:
While controlling is a formal function with systematic procedures for what, how, and who controls, its format might need on-site changes during actual processes. This can lead to the controlling process becoming informal at times, adapting to immediate needs.
In simple words: Controlling means checking if work matches plans and fixing problems. Its main features are: it's linked to planning, happens at all levels, is continuous, is the final step, looks to the future, is constructive, focuses on internal processes, is dynamic, centered on people, and can be formal or informal.

Exam Tip: When explaining characteristics, provide a clear, concise sentence for each point, ensuring it directly relates to the definition of controlling.

 

Question 2. Explain the importance of controlling.
Answer:
The importance of controlling is highlighted by the following points:
1. Helps in achieving objectives:
Controlling helps identify errors in the enterprise and facilitates corrective measures. This makes it easier to achieve organizational objectives.
2. Control on activities:
Controlling supervises various functional areas and activities, including organization, production, sales, employees, financial aspects, and quality.
3. Makes planning effective:
Planning sets the path, and controlling identifies deviations and helps improve them. This ensures plans are not just made but also successfully executed.
4. Co-ordination between various activities:
Controlling plays a role in coordinating the diverse activities within a business enterprise.
5. Evaluation of activities:
Under controlling, activities are compared against pre-determined standards and then evaluated to assess their performance.
6. Removes deviations:
Controlling aims to correct deviations by examining their causes and taking necessary measures to reduce them, bringing performance back on track.
7. Necessary for delegation of authority:
Controlling is important for effective delegation. Once authority is delegated, supervisors or authorized personnel use controlling to oversee and manage the activity.
8. Find out errors:
Controlling involves supervising and evaluating subordinates' activities, helping to identify and remove errors, difficulties, defects, and deviations, preventing their recurrence.
9. Long-term planning:
Controlling aids in long-term planning by gathering information that can be used to make long-term assumptions and forecasts for the business.
10. Helps in directing:
Controlling simplifies directing by supervising personnel, providing guidance, and giving direction to overcome difficulties, ensuring activities are performed as planned.
11. Barometer of efficiency:
Efficient control in a business enhances overall management efficiency. Therefore, controlling is often called the 'barometer of efficiency' for management.
In simple words: Controlling is important because it helps achieve goals, keeps activities in check, makes planning work better, coordinates different tasks, evaluates what's done, fixes problems, helps when giving tasks to others, finds and corrects mistakes, aids in long-term planning, guides workers, and acts as a measure of how good management is.

Exam Tip: Structure your answer by listing the importance points with clear headings and a brief explanation for each, demonstrating a comprehensive understanding of controlling's benefits.

 

Question 3. Explain in detail the various stages of the controlling process.
Answer:
Controlling is a universal and continuous process, and while each business has unique procedures, some generalized stages are:

Stages of Control Process
(1) Setting Standards \( \rightarrow \) (2) Gathering Information \( \rightarrow \) (3) Measuring Performance \( \rightarrow \) (4) Comparing Actual Performance with Set Standards \( \rightarrow \) (5) Corrective Measures

1. Setting standards:
This is the first stage, where standards are established to measure the efficiency of processes and people. These standards allow the organization to compare if activities are proceeding as planned. Without clear standards, it is impossible to determine what to control or how. Standards can be qualitative or quantitative, covering areas like cost price, income, capital, profit targets, and production targets, and can be set for the long or short term. Top management defines these standards and informs employees and subordinates, who then strive to meet them.
2. Gathering information:
In this stage, data about business processes is collected. Methods include personal observation, data collection directly from processes, and oral and written reports.
3. Measuring performance:
After gathering information, the performance parameters are measured. The goal is to obtain data on various organizational processes, which can then be compared with the set standards. Measurement can be qualitative, quantitative, or both.
4. Comparison of work done with set standard:
The measured information is then compared against the standards established under the control function. This comparison helps the organization determine whether the set standards have been achieved.
5. Corrective measures:
This is the final stage. When activities are compared against standards and deviations are found, necessary corrective measures are taken. Three types of measures can be taken:
(a) No change in the condition: If deviations are minor and acceptable, no corrective action is needed.
(b) Change the condition to remove deviation: If significant deviations from actual performance are found, they are examined, and necessary corrective measures are implemented.
(c) Change the condition and establish fresh (new) standards: If established standards are consistently not met, it indicates they might be too high. In such cases, new standards are set with necessary changes. Conversely, if results consistently exceed standards, higher standards should be set to encourage continuous improvement.
In simple words: The controlling process has five main steps. First, set clear goals or standards. Second, collect information about how things are going. Third, measure the actual work done. Fourth, compare the actual work with the set goals. Fifth, if there are differences, take steps to fix them, or even set new goals if needed.

Exam Tip: Clearly list and describe each stage of the controlling process in a logical sequence, explaining the purpose and typical actions involved in each step. Ensure you discuss all three types of corrective measures.

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