Short Answer Questions | Business Studies (BST) Class 12 - Commerce PDF Download

Q1: “Controlling is blind without Planning’ Comment.
Ans: “Controlling is blind without Planning”- Under the system of control actual performance is compared with budgetd standards to judge the effectiveness of performance. These standards are provided by planning. In the absence of standards there will be no justification left for control. Therefore it is correct to say that controlling is blind without planning.

Q2: “Controlling is the last function of management”. Comment.
Ans: “Controlling is the last function of management” Comment controlling should not be mis-understood as the last function of management. The controlling functions measures actual performance against standards, finds out the deviations analyses the causes of such deviations and takes corrective actions. This process helps in formulation of future plans in the light of the past problems. Thus controlling only completes one cycle of management process and improves in the next cycle.

Q3: ‘If you try to control everything, you may end up controlling nothing”. Explain.
Ans: According to the principle of ‘control by Exception” if you try to control everything, you may end up controlling nothing. Minor deviations from standards are insignificant for success. They can be ignored.
Therefore only significant deviations, which go beyond the permissible limits, should be reported to the management so that management may take corrective action to deal with the situations.

Q4: “Planning is looking ahead and controlling is looking back”. Comment.
Ans: It is often said that — planning is looking ahead while controlling is looking back” However, this statement is only partially correct — Planning is deciding in the present what to do in the future, thus it is looking ahead and it is toward looking function.
Controlling is like a past-mortem of the post activities to find out the deviations from the planned standard. Thus is a backward looking function. However future planning is guided by the past experience and corrective action initiated by controlling functions. Thus planning and controlling are both backward looking as well as forward looking function.

Q5: What is ‘critical point control’ ?
Ans: A since it is neither easy nor economical to check each and every activity in an organistion, the control should focus on key result areas (KRAs). These KRAs are very essential activities for the success of organisation and act as critical point. If anything goes wrong to these critical point, the entire organisation suffers.
For Example— Increase in material cost by 10% is more harmful than 20% increase in stationery expenses. So management should focus the controlling these KRA or critical point.
This concept of also known as Management by exception.

Q6: “Controlling doesn’t require any process”. Comment.
Ans: The given statement – “Control does not require any process” is not correct.
Process of management control involves the following steps.
Setting performance Standard : Standards are required to judge whether the actual performance is proceeding in the right way. Standards must be in numerical or measurable terms.
Measurement of Actual performance : Actual performance is evaluated and expressed in terms of planned standards.
Comparing Actual performance with standards : Actual performance is compared with the planned performance and deviations if any found out.
Analysing the deviations : In order to know the causes of deviations, and in order to take corrective actions, deviations are analysed.
Taking corrective Actions : If the deviations exceed the acceptable limits they should be immediately brought to the notice of management for taking corrective measures. Thus it is clear that controlling requires systematic process

Q7: “An ideal control technique is one that check every bit of performance” comment.
Ans: The given statement-"A ideal technique is one that checks every bit of performance” is wrong. An ideal control technique should focus on ‘key result areas (KRAs)— It is neither economical nor easy to keep a check on each and every activity in an organisation. There may be several activities to be controlled. In practice it is not possible for management to control each and every activity due to limited time & resources.
Therefore controlling should focus on KRAs which are critical to the success of an organization. The KRAs are set as the critical point. If anything goes wrong at the critical point, the entire organization suffers. So controlling should focus on these very important activities or KRAs.