Explore topic-wise InterviewSolutions in .

This statement is partially correct. 

i. Planning is forward looking in the sense that it looks at future and lays down the standards to be achieved in future. 

ii. Controlling is looking back in the sense that it looks at past and measures the actual performance relating to the past and compares actual performance with planned performance and taking corrective measures in case of deviation. 

iii. Planning is backward looking also in the sense as it is guided by past experiences and the corrective action initiated by control function aims to improve future performance. 

iv. Controlling is not only looking back but also forward looking like planning in the sense that it helps in the adoption of new plans (if existing plan cannot be implemented at all) and revision of the existing plans (if existing plan can be implemented only with modifications) on the basis of comparison of actual performance with the prescribed standards. 

v. Controlling provides valuable information derived from past experience for future planning. It ensures better utilization of resources in future by rectifying past mistakes. Thus, planning and controlling are both backward-looking as well as a forward-looking function. 

Correct option is (D) Both (A) and (B)

Correct option is (D) All of these

1. Controlling

2. Steps discussed here are:

“Recently the company .................. ten air-conditioners in a day.”

OR

“The target volume ................... 1000 units of air conditioners.”

i. Setting performance standards: These are the criteria against which the actual performance are measured.

ii. Measurement of actual performance: Actual performance is measured to compare it with the standard performance. “Even than the ......................... 800 units only.”

iii. Comparing actual performance with standards: At this step, actual performance is compared with the standards and deviations are found out, if any. “To find out the reason ......................... of each workers.”

iv. Analysing Deviations: At this stage, deviations are analysed to know their causes. “observed through C.C.T.V ......................... in gossiping.”

Controlling 

(1) Setting performance standards 

(2) Measurement of actual performance

(3) Comparison of actual performance with standards 

(4) Analysing deviations 

(5) Taking corrective action

When company starts following a good control on operations, it leads to derive benefits which are 

(i) Helps in achieving desired goals. 

(ii) Judging accuracy of operations.

(iii) Making efficient and effective use of resources. 

(iv) Improving employee morale. 

(v) Ensuring proper flow of orders and the whole system is in discipline. 

(vi) It facilitates the co-ordination and improve the performance of every individual.

Management by exception

Time Standards in quantitative terms.

Monetary standards in quantitative terms.

i. Production of inferior quality goods

ii. Exploitation of consumers.

Personal observation

1. Making Efficient Use of Resources: Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured that no employee deliberately delays his work performance. In the same way, wastage in all the physical resources is checked.

2. Improving Employee Motivation: Through the medium of controlling, an effort is made to motivate the employees. The implementation of controlling makes all the employees to work with complete dedication because they know that their work performance will be evaluated and if the progress report is satisfactory, they will have their identity in the organisation.

1. Accomplishing Organisational Goals: The controlling process is implemented to take care of the plans. 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. In this way, controlling is helpful in achieving the goals.

2. 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.

i. Accomplishing Organisational Goals: The controlling process is implemented to take care of the plans. 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. In this way, controlling is helpful in achieving the goals.

ii. Improving Employee Motivation: Through the medium of controlling, an effort is made to motivate the employees. The implementation of controlling makes all the employees to work with complete dedication because they know that their work performance will be evaluated and if the progress report is satisfactory, they will have their identity in the organisation.

By exercising control, a manager seeks to reduce wastages and spoilage of resources.

(a) Controlling.

(b) Steps discussed in the above paragraph are:

(i) Setting performance standards:

'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’.

                                 Or

'The target volume of the company in a day is assembling of 1,000 units of air-conditioners.'

Setting performance standards which are the criteria against which the actual performance would be measured.

(ii) Measurement of actual performance:

'Even then the assembly of air-conditioners per day is 800 units only.'

Measurement of actual performance with the standards in an objective and reliable manner.

(iii) Comparing actual performance with the standards:

'............ the company compared actual performance of each worker.'

Comparing actual performance with the standards to find out the deviation, if any.

(iv) Analyzing deviations:

'Observed through C.C.T.V. that some of the worker were busy in gossiping'.

 Analyzing deviations for their causes.

By correcting unfavourable deviations between actual performance and standard performance.

Information is gathered for the business processes.

Relationship between controlling and planning functions of management can be understood with the help of following points:

(a) Planning and controlling are inseparable twins of management. A system of control presupposes the existence of certain standards provided by planning. Once a plan becomes operational, controlling is necessary to monitor the progress, measure it, discover deviations and initiate corrective measures to ensure that events conform to the plans. Thus, planning without controlling is meaningless.

(b) Controlling is blind without planning. If the standards are not set in advance, managers have nothing to control. When there is no plan, there is no basis of controlling. Planning is clearly a prerequisite for controlling. Without planning there is no predetermined understanding of the desired performance. Planning seeks consistent, integrated and articulated programmes while controlling seeks to compels events to conform to plans. 

(c) Planning is basically an intellectual process involving thinking, articulation and analysis to discover and prescribe an appropriate course of action for achieving objectives. Controlling, on the other hand, checks whether decisions have been translated into desired action. Planning is thus, prescriptive whereas, controlling is evaluative.

(d) It is often said that planning is looking ahead while controlling is looking back. However the statement is only partially correct. Plans are prepared for future and are based on forecasts about future conditions. 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.

(e) Thus, planning and controlling are interrelated and, in fact, reinforce each other in the sense that:

(i) Planning based on facts makes controlling easier and effective.

(ii) Controlling improves future planning by providing information derived from the past experience.

The company should follow modern techniques to control the system. 

1. ROI (Return on Investment): It is a useful technique of controlling overall performance of a company. It indicates how resources are being used, facilitates balanced, uses effectively of capital employed, focuses on profits and relates them to capital Invested.

2. Responsibility’Accounting: Under this technique, the organisation is divided into centers that are responsible for the overall growth of the various departments. 

Responsibility cen-tres in the organization are these.

(a) Cost Centre: Under this, one can check the production and operational cost. 

(b) Revenue Centres: Sales or marketing departments come under this. This is responsible for generating revenue. 

(c) Profit Centre: Profit = Revenue – Cost. It ensures the actual profit derived from the business. 

(d) Investment Centre: This center ensures the optimum use of assets and it makes use of return on investment.

3. MIS (Management Information System): It is a control technique which provides information and support for effective managerial decision making. It provides accurate information to the managers, helps in planning, controlling, provides cost-effective information and many more.

The company should follow the modern techniques to control the system 

(i) ROI: (Return on Investment) It is a useful technique of controlling overall performance of a company. It indicates how effectively resources are being used, facilitates balanced use of capital employed, focuses on profits and relates them to capital invested. 

(ii) Responsibility Accounting: Under this technique, organisation is divided into centres which is responsible for overall growth of various departments. Responsibility centres in the organisation are 

(a) Cost Centre: Under this, one can check the production and operational cost. 

(b) Revenue Centre: Sales or marketing departments come under this, it is responsible for generating revenue. 

(c) Profit Centre: Profit = Revenue – Cost. It ensures the actual profit derived from the business. 

(d) Investment Centre: This centre ensures the optimum use of assets and it makes use of return on investment. 

(iii) MIS: (Management Information System)It is a control technique which provides information and support for effective managerial decision making. It provide accurate information to the managers, helps in planning, controlling, provides cost effective information and many more.

Under controlling, actual results are compared with the expected results and deviations are find out. Then corrective action is initiated to improve the performance. The corrective action is taken with reference to future on the basis of past experience. On this basis, it can be said that controlling looks forward.

i. 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.

ii. Improving Employee Motivation: Through the medium of controlling, an effort is made to motivate the employees. The implementation of controlling makes all the employees to work with complete dedication because they know that their work performance will be evaluated and if the progress report is satisfactory, they will have their identity in the organisation.

Controlling is called a process of looking back as under it actual results are compared with the standards decided in the past. After that, a corrective action is initiated. In other words, if the standards are not decided in the past, controlling is not at all possible. Hence, it is true that ‘controlling is backward looking’.

Controlling finds out the deviations from the standards set in the past in that sense controlling is a backward looking function.

Control is an indispensable function of management. Without control the best of plans can go away. A good control system helps an organisation in the following way 

(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 wastage and spoilage of resources. Each activity is performed in accordance with pre-determined standards and norms. This ensures that resources are used in the most efficient and effective manner. 

(iv) Improving Employee Motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It, thus motivates them and helps them to give better performancer. 

(v) Ensuring Order and Discipline: Controlling creates an atmosphere of order and discipline in the organisation. It helps to minimise dishonest behaviour on the part of the employees by keeping a close check on their activities. 

(vi) Facilitating Co-ordination in Action: Controlling provides direction Jo al! activities and efforts for achieving organisational goals. Each department and employee is governed by pre-determined standards which are well coordination with one another. This ensures that overall organisational objectives are accomplished. Although controlling is an important function of management. It suffers from the following limitations also 

(i) Difficulty in Setting Quantitative Standards: Control system loses some of its effectiveness when standards cannot be defined in quantitative terms. This makes measurement of performance and their comparison with standards a difficult task. Employee morale, job satisfaction and human behaviour are such areas where this problem might arise. 

(ii) Little Control on External Factors: Generally an enterprise cannot control external factors such as government policies, technological changes competition etc. 

(iii) Resistance from Employees: Control is offer resisted by employees. They see it as a restriction on their freedom. For instance, employees might object when they are kept under a strict watch with the help of Closed Circuit Televisions (CCTVs).

 (iv) Costly Affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small enterprise cannot afford to install an expensive control system. It cannot justify the expenses involved. Managers must ensure that the costs of installing and operating a control system should not exceed the benefits derived from it.

Control is an indispensable function of management. Without control, the best-of plans can go awry. 

A good control system helps an organization in the following ways.

1. Accomplishing organizational goals: The controlling function measures progress towards the organizational goals and brings to light the deviations if any and indicates corrective action. It thus guides the organization and keeps it on the right track so that organizational goals might be achieved.

2. 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 organization and in the environment and helps to review and revise the standards in light of such changes.

3. 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 in the most efficient and effective manner.

4. Improving employee motivation: A good control system ensures that employees know well in advance what they are expected to do and what are the standards of performance on the basis of which they will be appraised. It thus motivates them and helps them to give better performance.

5. Ensuring order and discipline: Controlling creates an atmosphere of order and discipline in the organization. It helps to minimize dishonest behavior on the part of the employees by keeping a close check on their activities.

6. Facilitating coordination in action: Controlling provides direction to all activities and efforts for achieving organizational goals. Each department implemented employee is governed by pre-determined standards which are well co-ordination with one another.

This ensures that overall organizational objectives are accomplished. Although controlling is an important function of management. 

It suffers from the following limitations also.

1. Difficulty in setting Quantitative Standards: Control system loses some of its effectiveness when standards cannot be defined in quantitative terms. This makes measurement of performance and their comparison with standards a difficult task. Employee morale, job satisfaction and human behavior are such areas where this problem might arise.

2. Little Control on External Factors: Generally an enterprise cannot control external factors such as government policies, technological changes competition etc.

3. Resistance from Employees: Control is often resisted by employees often. They see it as a restriction on their freedom. For instance, employees might object when they are kept under a strict watch with the help of Closed Circuit Televisions (CCTVs).

7. Costly Affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small enterprise cannot afford to install an expensive control system. It cannot justify the expenses involved. Managers must ensure that the costs of installing and operating a control system should not exceed the benefits derived from it.