Short Notes & Important Questions: Controlling | Business Studies (BST) Class 12 - Commerce PDF Download

Understanding the Concept of Controlling in Management

• Definition: Controlling is a key management function that ensures activities align with the organization's objectives and plans.
• Purpose: It involves monitoring and regulating activities to optimize resource utilization and achieve goals.
• Levels of Management: Necessary at all management levels: top, middle, and lower.
• Applicability: Vital across various sectors, including education, military, healthcare, and business.
• Continuous Process: Contrary to the belief that it is the final function, controlling is a continuous loop that informs future planning.
• Evaluation Process: Involves assessing performance against standards, identifying deviations, and implementing corrective actions.
• Feedback Mechanism: Helps refine future planning by addressing identified shortcomings.

Control in Management 

Benefits of Effective Control:

• Achieving Organizational Goals: Monitors progress and indicates necessary corrective actions.
• Assessing Standards: Evaluates if standards are realistic and achievable, allowing adjustments as needed.
• Resource Efficiency: Reduces waste and prevents misuse, maximizing productivity.
• Employee Motivation: Clear performance goals encourage employees to enhance their outcomes.
• Discipline and Accountability: Promotes a responsible work environment and discourages dishonesty.
• Coordination: Facilitates teamwork across departments towards common goals.

Limitations of Controlling

• Difficulty in Setting Quantitative Standards: Challenges arise when performance standards lack clear numerical definitions, making measurement difficult.
• External Factors: Limited control over external influences like government policies and competition.
• Employee Resistance: Employees may oppose control measures, viewing them as restrictions on their freedom.
• Cost: Implementing control systems can be expensive, and smaller businesses may struggle with the costs versus benefits.

Relationship between Planning and Controlling

• Interconnected Functions: Planning provides direction while controlling and monitoring execution, ensuring alignment with objectives.
• Future vs. Past: Planning is future-focused, while controlling reviews past performance to identify discrepancies.
• Complementary Roles: Together, they enhance organizational performance and effectiveness.

Controlling Process

Steps in Controlling:

• Setting Performance Standards: Benchmarks can be quantitative (costs, revenue) or qualitative (employee motivation).
• Measuring Actual Performance: Use objective techniques such as observation or reports; measurements should align with standards.
• Comparing Performance with Standards: Identifies deviations to assess performance against expectations.

Analysing Deviations:

• Critical Point Control: Focus on key result areas that significantly impact success.
• Management by Exception: Addresses only significant deviations for efficient management focus.

Taking Corrective Action:

• When Needed: Corrective actions are necessary when performance falls outside acceptable limits.
• Examples of Corrective Actions:
  1. Training employees to meet production goals.
  2. Providing additional resources for underperforming projects.
  3. Adjusting standards if issues persist despite management efforts.

Very Short Answer Questions

Q1: What is the primary focus of controlling in management?

Q2: How does controlling benefit employee motivation?

Q3: What is one limitation of a control system related to standards?

Q4: What does the term 'Management by Exception' refer to?

Q5: In which sectors is management oversight vital?

Short Answer Questions

Q1: Explain how controlling helps in achieving organizational goals.

Q2: What role does controlling play in resource utilization?

Q3: Describe a challenge faced when setting quantitative standards.

Q4: How can resistance from employees impact controlling measures?

Q5: What is the relationship between planning and controlling?

Long Answer Questions

Q1: Discuss the steps involved in the controlling process and their significance.

Q2: Analyze the importance of corrective actions in the controlling process and provide examples of when they might be necessary.

Q3: Explain how controlling can lead to continuous improvement within an organization.

Q4: Evaluate the impact of external factors on the effectiveness of a control system in management.

Q5: Discuss how effective planning and controlling complement each other to enhance organizational performance.