CBSE Sample Papers

CBSE Class 12 Case Studies In

Business Studies – Controlling
August 20, 2018 by Bhagya Leave a Comment

CBSE Class 12 Case Studies In Business

Studies – Controlling
CONTROLLING
Controlling: Definition
Controlling means ensuring that activities in an organisation are performed as per the
plans.

Importance of Controlling

 It helps in accomplishing organisational goals by constantly monitoring the performance of

the employees and bringing to light the deviations, if any, and taking appropriate
corrective action.
 It helps the business managers to judge the objectivity and accuracy of the standards.
 It seeks to make efficient use of resources.
 It seeks to motivate the employees and helps them in giving a better performance.
 It creates an atmosphere of order and discipline in the organisation.
 It facilitates coordination in action by providing direction to all activities within and among
departments.

Features of Controlling

 It is a goal-oriented function.
 It is a pervasive function as it is used in the organisations of varying types and sizes.
 It is considered to be a forward looking function as it helps to improve the planning by
providing valuable feedback for reviewing and revising the standards.
 It is considered to be a backward looking function as it is like the post mortem of the past
activities to ascertain the deviations if any.
 It is not the last function of management as it brings the management cycle back to the
planning function.
Steps Involved in the Controlling Process

 Setting performance standards in clear, specific and measurable terms.

 Measurement of actual performance as far as possible in the same units in which
standards are set.
 Comparing actual performance with standards to identify deviations if any.
 Analysing deviations through critical point control and management by exception
approaches to identify the causes for their occurrence.
 Taking corrective action whenever the deviation occurs beyond the permissible limits so
that it does not reoccur in future.

Relationship between Planning and Controlling

 Planning without controlling is useless and controlling without planning is blind.

 Planning provides the basis of controlling by setting the standards in advance. In the
absence of these standards, managers will not know what all activities have to be
controlled.
 Planning is prescriptive in nature whereas, controlling is evaluative.
 Thus, planning and controlling are interrelated and interdependent. As planning is based
on facts, it makes controlling easier and effective whereas controlling helps to improve
future planning by providing valuable information derived from the past experiences.
MIND MAP

LATEST CBSE QUESTIONS

Question 1.
Hina Sweets is a renowned name for quality sweets since 1935. Harsh the owner of
Hina Sweets was worried as the sales had declined during the last three months. When
he enquired from the Sales Manager, the Sales Manager reported that there were some
complaints about the quality of sweets. Therefore Harsh ordered for sample checking of
sweets.
Identify the step taken by Harsh that is related to one of the functions of management.
(CBSE, Delhi 2017)
Answer:
Measurement of actual performance is the step in controlling process being described.

Question 2.
State the steps in the process of controlling. (CBSE, Delhi 2017)
Answer:
The various steps involved in the controlling process are described below:

1. Setting performance standards: The first step in the controlling process involves setting
standards in clear, specific and measurable terms. Standards can be set in both
quantitative as well as qualitative terms. It is important that standards should be flexible
enough to be modified with the changes taking place in the internal and external business
environment.
2. Measurement of actual performance:The next step relates to the measurement of
actual performance. Performance should be measured in an objective and reliable
manner. As far as possible, performance should be measured in the same units in which
standards are set as this would make their comparison easier. Depending upon the
nature of work various techniques for measurement of performance like personal
observation, sample checking, performance reports, etc. may be used.
3. Comparison of actual performance with standards: This step involves comparison of
actual performance with the standard. Such comparison will reveal the deviation and
noting deviations if any. If the actual performance is more than planned performance
deviations are said to be positive or vice-versa.
4. Analysing deviations: Once the deviations are identified it is important to analyse them
through:
 Critical point control: All the deviations may not be significant. Moreover, it may
not be either economical nor easy to monitor each and every activity in the
organisation. Therefore, every organisation identifies and states its specific key
result areas (KRAs) or critical points which require tight control are likely to have a
significant effect on the working of the business. Any deviations on these points are
attended to urgently by the management. Like if the expenditure on refreshment of
workers goes up by 10% it can be ignored but if the production cost goes up by 5%
it may call for managerial action.
 Management by exception:Management by exception is the principle of
management control which is based on the belief that if you try to control
everything, you may end up controlling nothing. Therefore, only significant
deviations which go beyond the permissible limits should be brought to the notice of
the management. Like the output defects upto 2% may be considered acceptable
but if goes up by 5% it may call for managerial action.
5. Taking corrective action: This is the final step involved in the controlling process. When
the deviations are within acceptable limits no corrective action is required. However, when
the deviations go beyond the acceptable range, especially in the important areas, it
demands immediate managerial attention so that deviations do not occur again and
standards are accomplished. Corrective action might involve training of employees,
buying new machinery, increasing supervision and so on.

Question 3.
Describe briefly the relationship between controlling and planning. (CBSE, Delhi 2017)
Answer:
The relationship between controlling and planning is described below:
Planning and controlling are inseparable twins of management. Planning provides the
basis for controlling. The desired standards are set in the process of planning in clear,
specific and terms. In the process of controlling the actual performance is measured
and compared with these standards and the deviations if any are identified and
appropriate corrective action is taken. However, in the absence of any standards it
would not be possible to gauge the actual performance. Thus, planning without
controlling is meaningless and controlling without planning is blind.
Planning is prescriptive where as controlling is evaluative. Planning is an intellectual
activity which is concerned with thinking, articulating and analyzing various alternative
course of actions and prescribing the best possible alternative in order to achieve the
desired goals efficiently and effectively. Controlling on the other hand is concerned with
ensuring that events conform to plans. Thus, it involves monitoring and measuring the
extent to which the desired goals have been realized.
Planning is looking ahead and controlling is looking back. Planning is futuristic in nature
as it involves chalking out the future curse of action. It bridges the gap between where
we are and where we want to go. Thus, it is deemed to be a forward looking function of
management. Controlling on the other hand involves postmortem of the past activities to
find out deviations from the standards. Therefore, controlling is said to be a backward
looking function of management. However, on closer introspection we realize that the
feedback provided through the process of planning in terms of revising the standards
helps to improve future performances. Hence, like planning controlling is also forward
looking function.

Planning precedes controlling and controlling succeeds planning. Thus, planning and
controlling are interrelated and reinforce each other because:

 Planning is based on facts and makes controlling process easier and adds to the
effectiveness.
 Controlling also adds to the effectiveness of planning process by providing valuable
feedback based on past experiences.

Question 4.
State any five points that highlight the importance of ‘controlling’ function of
management.
(CBSE, Delhi 2017)
Answer:
The importance of controlling function of management is described below:
 1. Accomplishing organisational goals:The controlling function facilitates constant
monitoring of the actual performance in comparison to the predetermined standards and
brings to light the deviations, if any, and indicates corrective action. All these activities
ensure that organisational goals are realised efficiently and effectively.
2. Judging accuracy of standards: A good control system enables management to verify
whether the standards set are accurate and objective. Moreover, helps to review and
revise the standards in light of changes taking place in the organisation or business
environment in general.
3. Making efficient use of resources: By implementing a good control system a manager
seeks to reduce wastage and spoilage of resources. This is because each activity is
performed in accordance with predetermined standards and norms rather than hit and trial
method.
4. Improving employee motivation: An effective control system seeks to provide
motivation to the employees as they are made aware 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. This approach helps them to give better performance.
5. Ensuring order and discipline: A constant check on the behaviour and work of the
employees leads to creation of an atmosphere of order and discipline in the organisation.

Question 5.
How does controlling help in “Judging accuracy of standards” and “Ensuring order
and discipline”? (CBSE, Sample Paper, 2017)
Answer:
Controlling helps in “Judging accuracy of standards” and “Ensuring order and discipline”
as explained below:

 Judging accuracy of standards: An efficient control system enables management to

determine weather the standards set are accurate and objective. This is because it helps
to helps to review and revise the standards in light the changes taking place in the
organisation and in the environment.
 Ensuring order and discipline:Controlling helps to minimise dishonest behaviour on the
part of the employees by keeping a close check on their activities. Thus, it creates an
atmosphere of order and discipline in the organisation.

Question 6.
‘If anything goes wrong with the performance of key activities, the entire organisation
suffers. Therefore, the organisation should focus on them.’ Explain the statement with a
suitable example.
(CBSE, Sample Paper 2015-16)
Answer:
The given statement refers to the importance of ‘Critical Point Control’ in order to ensure
effective performance of key activities in an organisation.
Critical Point Control: It may not be either economical nor easy to monitor each and
every activity in the organisation. Therefore, every organisation identifies and states its
specific Key Result Areas (KRAs) or critical points which require tight control and are
likely to have a significant effect on the working of the business. Any deviations on
these points are attended to urgently by the management. For example, if in an
organisation, the expenditure on stationery goes up by 10%, it can be ignored but if the
production cost goes up by 5%, it may call for managerial action.

Question 7.
Mr. Nath, a recently appointed production manager of Suntech Ltd., has decided to
produce jute bags instead of plastic bags as these are banned by the government. He
set a target of producing 1000 jute bags a day. It was reported that the employees were
not able to achieve the target. After analysis, he found that employees were
demotivated and not putting in their best for achieving the target. Mr. Nath’s behaviour
is good towards the employees. His attitude is always positive. So, he announced
various incentive schemes for the employees like:

1. Installing awards or certificates for best performance

2. Rewarding an employee for giving valuable suggestions
3. Congratulating the employees for good performance
 Identify the functions of management highlighted in the above paragraph.
 State the incentive under which the employee are motivated.
 State any two values which the production manager wants to communicate to
society by his work and behaviour.
(CBSE, Sample Paper 2015)

Answer:

1. The functions of management highlighted in the above paragraph are Controlling and
Directing.
2. The employees are motivated under Employee recognition programmes which is a non-
financial incentive. Employee recognition programmes helps to fulfill the need of due
consideration and appreciation of the people working in an organisation. It boosts their
self-esteem and motivates them to work with greater zeal and enthusiasm.
3. The two values that the manager wants to communicate to the society through his work
and behaviour are:
 Respect for employees
 Concern for environment

Question 8.
A company was manufacturing LED bulbs which were in great demand. It was found
that the target of producing 300 bulbs a day was not met by the employees. On
analysis, it was found that the workers were not at fault. Due to electricity failure and
shortage of workers, the company was not able to achieve the set targets and
alternative arrangements were needed.
To meet the increased demand, the company assessed that approximately 88
additional workers were required out of which 8 would work as heads of different
departments and 10 would work as subordinates under each head. The required
qualifications and job specifications were also enlisted. It was also decided that
necessary relaxations should be given to encourage women, people from backward and
rural areas and people with special abilities to assume responsible positions in the
organisations. All efforts were made to match the ability of the applicants with the nature
of work.

1. Identify the functions of management discussed above.

2. State the two steps in the process of each function discussed in the above paragraph.
3. List any two values which the company wants to communicate to the society.
(CBSE, Delhi 2015)

Answer:

1. The functions of management discussed above are Staffing and Controlling.

2. The two steps involved in staffing function are as follows:
 Estimating manpower requirements: The manpower requirements of an
organisation are estimated through workload analysis and workforce analysis. The
workload analysis helps to determine the number and type of human resource
required in the organisation to meet its present and future needs. Whereas
workforce analysis seeks to determine the number and type of human resource
available within the organisation.
 Recruitment: The process of recruitment involves searching for the prospective
candidates and stimulating them to apply for jobs in the organisation. There are two
sources of recruitment namely, internal and external.
The two steps involved in controlling function are as follows:
 Comparing actual performance with standards to identify deviations if any.
“It was found that the target of producing 300 bulbs a day was not met by the
employees.”
 Analysing deviations through critical point control and management by exception
approach to identify the causes for their occurrence.
“On analysis, it was found that the workers were not at fault. Due to electricity
failure and shortage of workers, the company was not able to achieve the set
targets and alternative arrangements were needed.”
 Taking corrective action, if required “To meet the increased demand, the company
assessed that approximately … as subordinate under each head.”
3. The two values that the company wants to communicate to the society are:
 Women empowerment
 Kindness.

Question 9.
‘AS Ltd.’ is a large company engaged in assembling of air-conditioners. 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. The target volume of the
company in a day is assembling of 1,000 units of air-conditioners. The company is
providing attractive allowances to reduce labour turnover and absenteeism. All the
workers are happy. Even then the assembling of air-conditioners per day is 800 units
only. To find out the reason, the company compared actual performance of each worker
and observed through CCTV that some of the workers were busy in gossiping.

1. Identify the function of management discussed above.

 2. State the steps in the process of the function identified which are discussed in the above
paragraph. (CBSE, 2015)

Answer:

1. The function of management discussed above is Controlling.

2. The steps involved in the process of controlling which are discussed in the above
paragraph are:
 Setting standards of performance: “concluded that on an average, a worker can
assemble ten air-conditioners in a day.” “The target volume of the company in a day
is assembling of 1,000 units of air-conditioners.”
 Measurement of actual performance: ” Even then the assembling of air-
conditioners per day is 800 units only.”
 Comparison of actual performance with the standards:The company compared
actual performance of the workers with the planned performance and noted
deviation of 200 units.
 Analysing deviations: “To find out the reason, the company compared the actual
performance of each worker and observed through CCTV that some of the workers
were busy in gossiping.”

Question 10.
PQR Ltd. is engaged in manufacturing machine components. The target production is
200 units per day. The company had been successfully attaining this target until two
months ago. Over the last two months, it has been observed that daily production varies
between 150-170 units.

1. Identify the management function to rectify the above situation.

2. Briefly state the procedure to be followed so that the actual production may come up to
the target production. (CBSE, Delhi 2010)

Answer:

1. The controlling function of management is needed to rectify the above situation.

2. The procedure to be followed so that the actual production may come up with the target
production is as follows:
 Providing training to workers if the workers are not well versed with the production
process.
 Improving the work environment if it is not conducive to efficient working.
 Ensuring timely availability of the raw materials and other equipments if they are not
made available on time.
 Replacing the machinery if it is defective or has become obsolete.

Question 11.
Rajeev and Sanjeev are managers in the same organisation heading different units.
While discussing about the functions of management, Rajeev says that ‘Planning is
looking ahead whereas controlling is looking back.’ But Sanjeev says, ‘You are wrong
because planning is looking back whereas controlling is looking ahead.’ Both are giving
reasons in favour of their statements. Explain the possible reasons given by both and
justify who is correct. (CBSE, 2009)
Answer:
Both Rajeev and Sanjeev are correct in their statements as explained below:

 Planning is considered as a forward looking function by Rajeev as plans are made for
future.
 Planning may be considered as a backward looking function by Sanjeev because the
quality of planning can be improved with the help of valuable information provided by
controlling in terms of results achieved.
 Controlling is considered as a backward looking function by Rajeev as it is like the post
mortem of the past activities to ascertain the deviations if any.
 Controlling is considered as a forward looking function by Sanjeev as it helps to improve
the future performance by providing guidance for taking corrective action so that
deviations do not reoccur in future.

Question 12.
Kapil & Co. is a large manufacturing unit. Recently the company had conducted time
and motion studies and concluded that on an average, a worker could produce 300
units per day. However, it has been noticed that the average daily production per worker
is in the range of 200-225 units.

1. Name the function of management and identify the steps in the process of this function
which helped in finding out that the actual production of a worker is less than the set
target.
2. To complete the process of the function identified in (1) and to ensure the performance as
per time and motion studies, explain what further steps a manager has to take? (CBSE,
2010)

Answer:

1. Controlling is the function of management which helped in finding out that the actual
performance of a worker is less than the set target.
The steps involved in the controlling function of management which helped in finding out
that the actual performance of a worker is less than the set target are outlined below:
 Setting performance standards in clear, specific and measurable terms.
“Recently the company had conducted time and motion studies and concluded that
on an average, a worker could produce 300 units per day.”
 Measurement of actual performance as far as possible in the same units in which
standards are set.
“It has been noticed that the average daily production per worker is in the range of
200-225 units”.
 Comparing actual performance with standards to identify deviations if any.
In the given case there is a deviation in output in the range of 25-50 units per
worker.
2. In order to complete the process of controlling and to ensure the performance as per time
and motion studies the manager has to further take the following two steps:
  Analyzing deviations through critical point control and management by
exception approach: In the given situation, there is a deviation in output in the
range of 25-50 units per worker. The manager should analyse the reasons for the
same. The possible reasons for the same are:
 The workers are not well versed with the production process.
 The working environment is not conducive to efficient working.
 The raw materials and other equipment are not available on time.
 Taking corrective action: The deviations require immediate management
attention so that they do not reoccur in future. Therefore, the manager should take
appropriate corrective action after analyzing the situation like providing training to
workers, improving the work environment, and ensuring timely availability of the raw
materials and other equipment.

Question 13.
K&K Co. Ltd. is engaged in manufacturing of machine components. The target of
production is 200 units daily. The company had been successfully attaining this target
until two months ago. Over the last two months it has been observed that daily
production varies between 150-170 units. Identify the possible causes for the decline in
production and the steps to be taken to achieve the desire targets. (CBSE, 2008)
Answer:
The possible causes for decline in production are listed below:

 The workers are not well versed with the production process.
 The working environment is not conducive to efficient working.
 The raw materials and other equipment are not available on time.
 The machinery is defective or has become obsolete.

The deviations require immediate management attention so that- they do not reoccur in
future. Therefore, the manager should take appropriate corrective action after analyzing
the situation like providing training to workers, improving the work environment,
ensuring timely availability of the raw materials and other equipment or replacing the
machinery.

ADDITIONAL QUESTIONS

Question 1.
‘Taste Buds Ltd.’ is a company known for manufacturing good quality confectionery
products. The automated system of production ensures uniformity in production and
quality maintenance. The quality assurance team conducts stringent checks at all
stages, records and analyses the deviations and takes the necessary corrective actions
right from the procurement of raw material to its processing, production and packaging.
The company has a well-equipped in¬house quality inspection cell where confectionery
products are tested on various parameters of quality by the team of experienced quality
staff.
In context of the above case:
 1. Identify and explain the function of management being performed by the quality
assurance team of ‘Taste Buds Ltd.’
2. Explain the statement, “records and analyses the deviations and takes the necessary
corrective actions”.

Answer:

1. Controlling is the function of management being performed by the quality assurance team
of ‘Taste Buds Ltd.’
Controlling is the process of ensuring that events conform to plans.
2. The statement “records and analyses the deviations and takes the necessary corrective
actions” refers to the following steps involved in the process of controlling:
 Comparing the actual performance with the standards: The actual performance is
compared with the standards and deviations, if any, are recorded.
 Analysing deviations: Once the deviations are identified, it is important to analyse
them through:
 Critical point control: All the deviations may not be significant. Moreover, it
may not be either economical nor easy to monitor each and every activity in
the organisation. Therefore, every organisation identifies and states its
specific key result areas (KRAs) or critical points which require tight control
as they are likely to have a significant effect on the working of the business.
Any deviations on these points are attended to urgently by the management.
Like in the above case, if the expenditure on refreshment of workers goes up
by 10% it can be ignored but if the production cost goes up by 5% it may call
for managerial action.
 Management by exception:Management by exception is the principle of
manage¬ment control which is based on the belief that if you try to control
everything, you may end up controlling nothing. Therefore, only significant
deviations which go beyond the permissible limits should be brought to the
notice of the management. Like in the above case, the output defects upto
2% may be considered acceptable but if it goes up by 5%, it may cal for
managerial action.
3. Taking corrective action: The last step in controlling process involves taking corrective
action whenever the deviation occurs beyond the permissible limits so that they do not
reoccur in future. However, the standards may be revised if it is not possible to check
deviations through corrective action.

Question 2.
Anubhav has set up an export house after completing his masters in fashion designing.
As the quality of the garment depends on the quality of raw material used, he assures
that the fabric meets the requirements by conducting a series of tests for the fabrics like
shrinkage test, testing colour fastness to washing, colour fastness to light, colour
fastness to perspiration etc through laboratory tests. Later on, at the production areas,
fabric inspection is also conducted by stopping the production process. The tests help to
detect the deviations and also take corrective action. Moreover, he ensures that
complete training about production work was given to every worker at the time of joining
his export house.
In context of the above case:
 1. Identify the function of management being performed by Anubhav by conducting tests to
assure for the quality of the garments manufactured in his export house.
2. Briefly explain the term ‘deviations.’
3. Give any three advantages of giving training to the employees.

Answer:

1. Controlling is the function of management being performed by Anubhav by conducting

tests to assure for the quality of the garments manufactured in his export house.
2. The term ‘deviations’ refers to the difference between the actual performance and
planned performance. If the actual performance is more than the planned performance, it
may be said to be positive in nature or vice-versa.
3. The benefits of training and development to an organisation are as follows:
1. Training imparts systematic learning to the employees thereby helping to avoid
wastage of efforts and money and is considered better than the hit and trial method.
2. It increases the employees’ productivity both in terms of quantity and quality,
leading to higher profits.
3. Training increases the morale of the employees and reduces absenteeism and
employee turnover.

Question 3.
Raghav started a take away eating joint in a nearby market. His business was doing
well. He ensured that the food was properly cooked, a standard taste was maintained,
packing of food was done effectively and the orders were executed on time. But
unfortunately he met with an accident and was advised three months bed rest. In his
absence, his cousin Rohit took charge of his business. When he resumed his work after
three months, he realised that his clientele had dropped. The people were not happy
with the services as the quality of food had deteriorated and the delivery time for orders
had increased considerably. All this was happening because most of his previous staff
had left as Rohit used to adopt a very strict and authoritative approach towards them.
In context of the above case:

1. List any two aspects about his business that Raghav was controlling in order to make it
successful.
2. Explain briefly any two points to highlight the importance of the controlling function.
3. Name and explain the style of leadership adopted by Rohit.

Answer:

1. The two aspects about his business that Raghav was controlling in order to make it
successful are listed below:
 A standard taste was maintained.
 The orders were executed on time.
2. The two points that highlight the importance of the controlling function are listed below:
 Judging accuracy of standards:The controlling function helps the business
managers
to judge the objectivity and accuracy of the current standards. It also assists in
 reviewing and revising the standards keeping in view the forthcoming changes in
both the internal and external environment of the business.
 Improving employee motivation:The controlling function seeks to motivate the
employees and helps them to give better performance. This is because it makes
them aware well in advance about what they are expected to do and what the
standards of performance are on the basis of which they will be judged.
3. Rohit had adopted an autocratic style of leadership. An autocratic leader expects strict
compliance from his subordinates with regard to the orders and instructions given by him.
Therefore, it involves only one-way communication.

Question 4.
‘Saurashtra’ is a company involved in the export of indigenous food products like
chutneys and pickles. It has tied up with the small farmers in various states for sourcing
of fruits and vegetables. In this way it helps the small farmers to sell their produce at
reasonable rates. The company follows a practice where only significant deviations from
a budget or plan are brought to the attention of management. The degree of deviations
allowed in different categories in the budget are well defined in advance, along with the
appropriate levels of management who will respond to the deviations in question. For
example, a deviation of Rs. 20,000 or more in purchase costs will be reported to the
concerned department manager.
In context of the above case:

1. Identify the principle of management control adopted by the company. State the belief
underlying this principle.
2. List any two values that the company wants to communicate to the society.

Answer:

1. Management by exception is the principle of management control adopted by the

company. It is based on the belief that ‘if you try to control everything, you may end up
controlling nothing’.
2. The two values that the company wants to communicate to the society are:
 Rural development
 Sense of responsibility

Question 5.
Shruti has established a small scale factory after completing a course in textile
designing. She has tied up with the big home furnishing retail outlets in the city for
supplying to them good quality designer home furnishing products like bed covers,
cushions etc. She believes that controlling without planning is blind. So, every time she
gets an order, she sets the standards in terms of the number of personnel required, the
estimated requirements in man-hours per product, the requirements of direct materials
for the projected production and the amount of normal overhead expenses required at
the projected work-load. She also keeps a close watch on the activities so as to ensure
that they conform to plans. Whenever the order size is too large, she hires extra
workers by placing a notice on the notice-board of the factory specifying the details of
the jobs available.
In context of the above case:

1. Identify the functions of management being performed by Shruti.

2. Do you think Shruti is right in her thinking that, “controlling without planning is blind.”
Explain by bringing out the relationship between planning and controlling.
3. Name the source of recruitment adopted by Shruti. Also, mention its type.

Answer:

1. The functions of management being performed by Shruti are Controlling and Staffing.
2. Yes, Shruti is right in thinking that, ” controlling without planning is blind.”
Planning provides the basis of controlling by setting the standards in advance. In the
absence of these standards, managers will not know what all activities have to be
controlled. Planning is prescriptive in nature whereas controlling is evaluative. Thus,
planning and controlling are interrelated and interdependent as planning is based on facts
and makes controlling easier and effective whereas controlling helps to improve future
planning by providing valuable information derived from the past experiences.
3. The source of recruitment adopted by Shruti is Direct Recruitment. It is an external source
of recruitment.

Question 6.
Vishesh works as an interior designer. He gets a contract to redesign a play school. He
employs three painters on the site assuming that an average painter will be able to paint
10 desks in a day. At the end of the first day of their work, Vishesh finds that the painter
A, painter B and painter C have painted 12, 14 and 15 desks respectively. On
comparing the actual performance with the planned performance, he realises that the
standard set by him is too low. Consequently, he decides to review and revise the
standard and raise it.
In context of the above case:

1. Identify the function of management being performed by Vishesh.

2. “Planning and controlling are both backward looking as well as forward looking functions.”
Explain the statement with reference to the above paragraph.

Answer:

1. Controlling is the function of management being performed by Vishesh.

2. It is appropriate to say that, “Planning and controlling are both backward looking as well
as forward looking functions” as evident from the above case.
Planning is considered as a forward looking function as plans are made for future.
“assuming that an average painter will be able to paint 10 desks in a day.”
Planning may be considered as a backward looking function because the quality of
planning can be improved with the help of valuable information provided by controlling in
terms of results achieved.
“On comparing the actual performance with the planned performance, he realises that the
standard set by him is too low.”
 Controlling is considered as a backward looking function as it is like the post mortem of
the past activities to ascertain the deviations if any.
“At the end of the first day of their work, Vishesh finds that the painter A, painter B and
painter C have painted 12, 14 and 15 desks respectively.”
Controlling is considered as a forward looking function as it helps to improve the future
performance by providing guidance for taking corrective action so that deviations do not
reoccur in future.
“Consequently, he decides to review and revise the standard and raise it.

Question 7.
A critical point control (CPC) approach is followed by McDonald in the cooking and
handling process so that any food safety threat can be prevented, eliminated, or
reduced to an acceptable level. Hence, continuous monitoring of activities are
undertaken to ensure that the process is right at each critical point control. The main
principle followed for cooking at McDonald is “less amount many time” which can
ensure the high quality and high fresh level of the food. For instance, if four hamburgers
have to be made, a worker cannot cook all the four hamburgers at one time. The time
figured out for making one hamburger is one hundred and forty-five seconds. Moreover,
nearly all foods in the McDonald have the specific holding time, the holding time for
hamburgers is ten minutes and for french fries is seven minutes. If it is not sold within
that time it is thrown away. Also, the temperature of the milk sent by the supplier must
be under 4° C, otherwise, it will be returned.
In context of the above case:

1. Name the steps involved in the controlling process which is being discussed in the above
lines.
2. What do you understand by ‘critical point control’? Explain.
3. How does the controlling function of management help in accomplishing organisational
.goals and ensure efficient use of resources?

Answer:

1. Analysing deviation and taking corrective action are being discussed in the above lines.
2. Since it may neither be economical nor easy to monitor each and every activity in the
organisation, therefore, every organisation identifies ar\d states its specific key result
areas (KRAs) or critical points which require tight control are likely to have a significant
effect on the working of the business. Any deviations on these points are attended to
urgently by the management.
3. The two points that highlight the importance of the controlling function are listed below:
 Accomplishing organisational goals: The controlling function helps in
accomplishing organisational goals by constantly monitoring the performance of the
employees and bringing to light the deviations, if any, and taking appropriate
corrective action.
 Making efficient use of resources: The controlling function enables the managers
to work as per predetermined standards. This helps to avoid any ambiguity in
business operations and reduce wastage and spoilage of resources in the
organisation.
 Case Studies in Business Studies Business Studies Case StudiesBusiness
StudiesCommerce

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