CBSE Class 12 Business Studies Controlling Assignment

CBSE Class 12 Business Studies Controlling Assignment. Prepared by teachers of one of the best CBSE schools in Delhi. Based on CBSE and NCERT guidelines. The students should practice these assignments to gain perfection which will help him to get more marks in CBSE examination.

Meaning & Definition
Controlling means ensuring that activities in an organisation are performed as per the plans. Controlling also ensures that an organisation s resources are being used effectively and efficiently for the achievement of predetermined goals.
It can be defined as comparison of actual performance with the planned performance The controlling functions find out how far actual performance deviates from standards, analyses the causes of such deviations and attempts to take corrective actions based on the same.

Importance of Controlling :-
1. Controlling helps in achieving organisational goals :- The controlling function measures progress towards the organisational goals and brings to light/indicates corrective action.
2. Judging accuracy of standards : A good control system enables management to verify whether the standards set are accurate or not.
3. Making efficient use to resources - By the process of control, a manager seeks to reduce wastage of resources.
4. Improves employees motivations : A good control system ensures that employees know well in advance what they are expected to do & also the standard of performance. It thus motivates & help them to give better performance.
5. Facilitating Coordination in action : In controlling each department and employee is governed by predetermind standards which are well coordinated with one another.
6. Ensuring order and discipline :- Controlling creates an atmosphere of order and discipline in the organisation by keeping a close check on the activities of its employees.

Limitations of Controlling
1. Little Control on external factors : Generally no exterprise can control external factors such as government policies, technological changes, competitions etc.
2. Resistance from employee - Control is often resisted by employees. They see it as a restriction on their freedom.
3. Costly affair : Control is a costly affair as it involves a lot of expenditure time and efforts.
4. Difficulty in setting quantitative standards :- Control system loses some of its effectiveness, when standards cannot be defined in quantitative terms. In the absence of quantitative standards, comparison with standards becomes difficult.

Relationship between Planning and Controlling :
Planning and controlling are interrelated and infact reinforce each other in the sense that :-
1. Planning is pre-requisite for controlling. Plans provide the standard for controlling. Thus, with out planning, controlling is blind.
2. Planning is meaningless without controlling. It is fruitful when control is exercised.
3. Effectiveness of planning can be measured with the help of controlling.
4. Planning is looking ahead & controlling is looking back.
Thus planning & controlling cannot be separated. The two are supplementary functions which support each other for successful execution of both the functions.
Planning makes controlling effective where as controlling improves future planning.

Controlling Process :
1. Setting performance Standards :- Standards are the criteria against which actual performance would be measured. Thus standards serve as bencemarks.
2. Measurement of Actual performance : Performance should be measured in an objective and reliable manner. Which include personal observation, sample checking.
3. Comparing Actual performance with standard : This steps involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired performance.
4. Analysing Deviations - The deviations from the standards are assessed and analysed to identify the causes of deviations.
5. Taking Corrective Action :- The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within the acceptable limits. 

Traditional Techniques :-
Traditional techniques are those which have been used by the companies for a long time and are still being used.

Modern Techniques :-
Modern techniques of controlling are those which are of recent origin. These techniques provide refreshingly new thinking on the way in which various aspects of an organisation can be controlled.

Budgetary Control : It is a technique of management control in which all operation are planned in advance in the form of budget & actual result are compared with budgetary standard.

Types of Budget (i) Sales Budget, Production Budget etc.

Budgetary Control :
A budget reflects the policy for the specified period. The most common types of budgets used by an organisation are sales budget, production budget, cash budget etc.
Budgetary control is a technique of managerial control in which all operation are planned in advance in the form of budgets and actual results are compared with budgetary standards. This comparison reveals the necessary action to be taken so that organisational objectivies are accomplished.

Modern Techniques of Managerial Control :

(i) ROI Return an investment
ROI = Net Income/Sale x Sales/Total Investments

(ii) Ratio Analysis : Liquidity ratios; Solvency ratios; Profitability ratios; Turnover ratios.
PERT : Programme evaluation & review techniques.
CPM : Critical path method

MIS : Management Information System
(i) It is computer based information system that provides support & information for effective managerial decesion making.

(ii) It servis as an important control technique by providing data & information to the managers at the right time so that appropriate
corrective action may be taken in case of deviation from standards.

Important Questions for NCERT Class 12 Business Studies Controlling 

Question. Controlling is __________________-
(a) Backward looking function
(b) Forward Looking function
(c) both backward as well as forward looking function
(d) None of the above

Answer : C

Question. Controlling is known as backward looking function because.
(a) it relates to a future course of action
(b) it is like a post-mortem of the past activities to find out deviation
(c) it aimed at improving future performance
(d) all of the above

Answer : B

Question. Which of the following is not an importance of controlling function?
(a) it ensures order and discipline
(b) it restrict coordination in action
(c) it helps in judging accuracy of standard
(d) it improves employee motivation

Answer : B

Question. The controlling function is performed by
(a) Top level management
(b) Lower level management
(c) Middle level management
(d) All of the above

Answer : D

Question. Which of following is the function prerequisite for controlling?
a) Staffing
b) Organizing
c) Planning
d) Directing

Answer :  C

Question. Planning and Controlling are_____________________ to each other.
a) Separate
b) Unrelated
c) Interrelated
d) Opposite

Answer :  C

Question . ‘Controlling in the absence of planning is blind’ what does this statement indicate in respect of both?
(a) Only planning is essential
(b) Only controlling is essential
(c) Both are essential
(d) Both are unnecessary

Answer :  C

Question. When does the measuring of actual performance become meaningful?
(a) When the standards have been set
(b) When the standards have not been set
(c) When standards are more than the need
(d) When standards are less than the need

Answer :  A

Question . Controlling function brings back the management cycle to which function?
a) Directing
b) Planning
c) Organizing
d) Staffing

Answer :  B

Question. Hindrance in the supply of electricity is ________ cause of deviation.
(a) Human
(b) Uncertain conditions
(c) Various hindrances
(d) Defective standards

Answer :  C

Question. Which function of management is controlling?
(a) First
(b) Second
(c) Third
(d) Last

Answer :  D

Question. “Controlling is required at all the levels of management”. Which feature is highlighted in the above statement?
a) Dynamic
b) Contingent
c) Pervasive
d) Continuous

Answer :  C

Question. Standards are the bench mark to-
a) Measure future performance
b) Measure actual performance
c) Correct future performance
d) Correct actual performance

Answer :  B

Question. Standards means _
a)target
b)estimates
c)output
d)results

Answer :  A

Question. Management by exception _
a)significant deviation
b)all deviations
c)controlling
d)none

Answer :   A

Question. Which among the following is a feature of standard-
a) Rigid
b) General guidelines
c) Flexible
d) Static

Answer :  C

Question. Critical point control focuses on-
a) Significant deviations only
b) Key result areas
c) Each and every activity in an organization
d) Attempts to control everything

Answer :  B

Question. Management by exception refers to-
a) Controlling significant deviations
b) Focus on Key result areas
c) Check on each and every activity
d) Keep a control on everything

Answer :  A

Question. An efficient control system helps to
(a) accomplish organisational objectives
(b) boost employee morale
(c) udge accuracy of standards
(d) all of the above

Answer : D

Question. Which one of the following is a step of controlling?
(a) Assessing personnel required
(b) Taking corrective action
(c) Assessing environment
(d) Taking disciplinary action

Answer : B

Question. To make sure employees focus on work and follow the method of production as per plan the management of Jai lt(d) decided to install CCTV (close circuit television) in the factory for monitoring the activity of workers.
(a) Planning
(b) Controlling
(c) Staffing
(d) Directing

Answer : B

Question. what will be the corrective action for defective material ?
(a) change in quantity change in price
(b) change in quality
(c) specification for material used
(d) none of the above

Answer : C

Question. While scrutinizing the production records it is found that in a particular Batch, the rejection rate was 5% against the standard of 2%. The management found out that this was due to negligence of quality control staff. This action is part of which step in the controlling process.
(a) Measurement of actual performance
(b) comparing actual performance with standards
(c) analysing deviations
(d) taking corrective action

Answer : C

Question. Management by exception refers to:
(a) Controlling significant deviations
(b) Focus on key result areas
(c) Check on each and every activity
(d) Keep a control on everything

Answer : D

TRUE/FALSE

1. STANDARDS are set inqualitative terms only.  false

2. The effectiveness of budgeting depends on how accurately estimates have been made about future. true

3. Planning and controlling are inter dependent & interlinked  true

4. Standards means target against which the actual performance is measured. true

5. Management by exception saves time & efforts of managers.  true 

6. Critical point control focuses on all the areas. false

8. An ideal control system is the one that checks every bit of performance . false

10. Controlling is carried on till the organization is surviving .true

11. An accurate control system revises standards from time to time to match them with environmental changes . true

12. Management by exception doesnot differentiates between critical &simple problems .false

13. Controlling is keeping check that everything goes according to plans. True

14. Controlling does not highlight the deviations in the process. False

15. Controlling cannot be usedto improve the performance of the employees. False

16. Controlling guides the organization to keep everything on right track. True

 

Very Short answer type questions

Question. How controlling is an all pervasive function?
Answer : Controlling is not the task of top level managers only but managers working at all the levels i.e. top, middle and operational level perform controlling function. Its need is everywhere and hence it is an pervasive function.

Question. Mr. Ankit is the chief manager in a well known MNC, producing shoes. He called the production manager of his unit and told him to keep a constant watch on all the activities of his respective unit so that there is no possibility of adverse results. As long as the company runs its operation, employees at all levels will adopt it to achieve results.
(i) Identify the function of management referred above.
(ii) Describe its three features
Answer : (i) Controlling
(ii) a. Goal-oriented
b. Continuous process
c. Pervasive function

Question. What is meant by controlling?
Answer : Controlling refers to comparison of actual performance with the planned performance and taking corrective actions, in case of deviations between actual and planned performance.

Question. Explain how ‘Management by Exception’ helps in controlling process.
Answer : According to this principle, control will be effective only if the manager focuses his attention on more important exceptions. Here important exceptions mean the especially good or especially bad deviations. It means that the manager should take corrective action, in respect of those deviations, which are either too good or too bad. By taking care of important deviations both time and efforts are saved.

 

Short answer type questions

Question. Describe briefly the relationship between planning and controlling .
Answer : Planning and controlling are mutually interrelated and interdependent activities. Controlling takes place on the basis of standards of performance developed by planning. Once plan is implemented controlling is necessary to monitor the progress, measure it, identify and analyse deviations and take corrective action. Planning is an intellectual process Involving thinking articulation and analysis, controlling evaluates whether decisions have been translated into desired actions. Planning and controlling both are forward looking and backward looking functions.

Question. Explain critical point control and management by exception.
Answer : Critical point control helps in controlling process by focusing on key result areas which are critical to the success of an organisation .If anything goes wrong at the critical points then their organisations suffer. Management by exception is an important principle of management controlled based on the belief that “an attempt to control everything results in controlling nothing “.Thus only significant deviations Which cross the permissible limit/ acceptable range should be brought to the notice of the management .

Question. If anything goes wrong with the performance of key activities the entire organisation suffers the for the organisation should focus on them explain the statement with suitable example .
Answer : The statement refer to use of critical point control while analysing deviations. It emphasizes that the variations in the areas need to be attended more urgently as compared to deviations in certain in significant areas. Control should the focus on key result areas which are critical to the success of the organisation. For example in a manufacturing organisation and increase of 5% in the labour cost may be more troublesome than a 15% increase in postal charges.

Question. Define controlling .why is controlling a goal oriented function?
Answer : Controlling is the process of comparing the actual performance with the standard, finding out deviations if any and taking the necessary corrective action to prevent the recurrence of these deviations in future. controlling is said to be gold oriented because it measures progress towards the organisational goals and brings to light the deviations if any and indicates corrective action. Thus it guides the organisation and keeps it on the right track so that organisational goals are achieved

Question. How does controlling ensures order and discipline in the organisation?
Answer : 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.

 

Long Answer type Questions 

Question. State The steps in the process of controlling.
Answer : 1. Setting of performance standard
2. measurement of actual performance
3. comparing actual performance with standards
4. Analysing deviations
5. taking corrective action

Question. States any five points that highlight the importance of controlling function of management.
Answer :  1. Accomplishing organisational goals
2. Judging accuracy of standards
3. Making efficient use of resources
4. Ensuring order and discipline
5. Improving employee motivation
6. Facilitating coordination in action