HOTS Questions: Controlling | Business Studies (BST) Class 12 - Commerce PDF Download

Q1: ‘If planning is done carefully and accordingly other functions of management are going in right direction then there is no need of the controlling function of management.’ Do you agree with the statement ? Justify your answer.
Ans: Importance of Controlling :
8.4 Importance of Controlling
Controlling is an indispensable function of management. Just as road signals are essential to ensure accident-free and smooth traffic, managerial controlling is necessary for the smooth running of business.
“Control is the soul of business management.” A good control system helps an organization in the following ways :

• Controlling helps in achieving organizational goals : The first steps in management is setting organizational goals and establishing a procedure to achieve them. The objective may be in terms of a target profit, target sales or target production. However, actual performance may or may not necessarily be according to plan. If deviation are detected early, remedial action can be taken and the desired target is ultimately achieved. This will only happen if there is a control mechanism which detects and corrects deviations between actual and desired results.
• Controlling helps in judging accuracy of standards : An efficient control system enables management to verify whether the standards set are accurate and objective by keeping a careful check on the changes taking place in the organization and in the environment.
• Controlling helps in 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. This ensures effective and efficient utilization of resources.
• Controlling helps in improving employees 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 their performance will be evaluated. It, thus, motivates them and helps them to give better performance.
• Controlling ensures order and discipline : Controlling creates an atmosphere of order and discipline in the organization. It helps to minimize dishonest behaviour on the part of employees by keeping a close check on their activities.
• Controlling facilitates coordination in action : Controlling provides direction to all activities and efforts for achieving organizational goals. Each department and employee is governed by predetermined standards which are well coordinated with one another. This helps is accomplishing the overall organizational objectives

 
Q2: How are planning and controlling interdependent and inter-linked ?
Ans: The given statement is wrong. Controlling is an indispensable function of management. Rest is same to answer 3 in above.

Q3: Taking corrective action is the last step in the process of management (a) Name the function (b) Explain the steps involved in this process.
Ans: Planning and controlling are interrelated and interdependent as follows :
(i) Planning is the basis for controlling Planning is the basis for controlling too. In the absence of plans it is not possible to measure and assess performance. For example, if the output is 500 units, the manager can know whether it is adequate or not only when there is a standard output set up by the planners. Thus, planning provides the base for comparison of actual performance with the budget performance.
(ii) Controlling helps in planning : Without effective controlling, activities can not be properly planned. Planning is guided by past experiences and corrective measures suggested by controlling.
(iii) Effective controlling helps in formulation of future plans Controlling helps in revising plans to reap maximum benefits at minimum cost. Controlling ensures improvement in future performance.
(iv) Finding out deviations and cause there of effectiveness of planning can be measured with the help of controlling. Planning is based on fore cast about future conditions. Controlling sets standards and finds out deviations from standards. After that corrective actions are to be taken by controlling function.