CBSE Class 12 Business Studies Controlling VBQs

Question. Budgetary control requires the preparation of
(a) Training schedule
(b) Budgets
(c) Network diagram
(d) Responsibility centres

Answer : B

Question. Which of the following is associated with the marketing standard?
(a) sales expenses
(b) Capital expense
(c) Quantity
(d) Dispute rate

Answer : C

Question. Controlling is needed at which level of management?
(a) Top level
(b) Middle level
(c) Lower level
(d) All level

Answer : B

Question. Controlling is related to:
(a) Results
(b) Individuals
(c) Things
(d) Managers

Answer : D

Question. Which standard is associated with production?
(a) Quality
(b) Quantity
(c) Quality and Quantity
(d) Labour

Answer : A

Question. Controlling function of an organization is
(a) Forward looking
(b) Backward looking
(c) Forward as well as backward looking
(d) None of the above

Answer : C

Question. What type of nature the control has?
(a) Positive approach
(b) Negative approach
(c) Both of the above
(d) None of these

Answer : D

Question. Cost at Rs. 100 per unit is an example of which standard?
(a) Quantitative
(b) Qualitative
(c) Both
(d) None of these

Answer : C

Question. An efficient control system helps to:
(a) Accomplishes organizational objectives
(b) Boosts employee morale
(c) Judges accuracy of standards
(d) All of the above

Answer : D

Question. Which of the following qualities the standard should have?
(a) Achievable
(b) Measurable
(c) Flexible
(d) All of these

Answer : A

Question. Strike is which type of cause of deviation?
(a) Uncertain conditions
(b) Human cause
(c) Various hindrances
(d) Defective standards

Answer : C

Question. First step in controlling process is:
(a) Taking corrective action
(b) Analysing the deviations
(c) Determining standards
(d) Measurement of actual performance.

Answer : A

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

Answer : B

Question. ‘Planning in the absence of controlling is meaningless’. 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 : D

Question. Mr.Sinha runs a logistic company. The Tour In charges of each trip in the company are expected to submit a report to the Event Manager on the completion of every trip. Identify the step in the controlling process being described in the above lines.
(a) Setting of standards
(b) Measurement of actual performance
(c) Taking corrective action
(d) Analysing the deviation

Answer : B

Question. Which one of the following is not the step in the process of controlling?
(a) Establishing reporting relationship
(b) Measurement of actual performance
(c) Setting performance standards
(d) Taking corrective action

Answer : A

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 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. Ramesh is a senior manager in a software consultancy firm. He regularly prepares performance reports of his subordinates as part of appraisal. The step of controlling process is :
(a) Measuring of performance
(b) Compare performance against standard
(c) Analyzing deviation 
(d) Taking corrective action. 

Answer : A

Question. In a marketing firm, the Financial Manager pays more attention towards an increase of 3% in the marketing cost as compared to a 15% increase in the courier expenses. Identify the concept being used by the manager.
(a) Management by exception
(b) Critical point control
(c) Corrective action
(d) None of the above

Answer : B

Question. Prakash has set up a small business unit for the manufacturing of detergent. In order to market the detergent in the local residential areas, he has appointed a team of ten salesmen. Each salesman is expected to sell at least 200 units of the detergent within a week’s time. Identify the point of importance of controlling being highlighted in the above case.
(a) Controlling helps in judging accuracy of standards.
(b) It ensures efficient use of resources.
(c) It helps in improving employee motivation.
(d) It facilitates co-ordination in action.

Answer : C

Question. To make sure employees focus on work and follow the method of production as per plan the management of Jai ltd. 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. Which one of the following is not an importance of controlling?
(a) Better coordination
(b) Better use of resources
(c) Better planning
(d) Better grievance handling

Answer : D

Question. With the help of controlling function the management can know not only about the deficiency in the performance but it also helps management to know whether standards or plans are set correctly or not. The importance of management discussed above is:
(a) Ensure order and discipline
(b) Facilitate coordination in action
(c) Judging accuracy of standard
(d) Making efficient use of resources. 

Answer : C

Fill up the blank(s)/Complete the Sentence

Question. The first step in the controlling process is __________________.
Answer : Setting performance standards.

Question. _____________ serve as bench marks towards which an organisation strives to work.
Answer : Standards

Question. Measurement of performance of an employee may require preparation of _________________ by his superior.
Answer : Performance report

Question. A manager should try to set standards in precise quantitative terms as ___________________.
Answer : This would make their comparison with actual performance much easier

Question. ____________ identifies critical problems which need timely action of management to keep the organisation in right track.
Answer : Critical point control

Question. Standards should be flexible enough so that _____________________.
Answer : these may be modified to be realistic in the changed business environment.

Question. In the controlling process, once performance standards are set the next step is ________________.
Answer : Measurement of actual performance

Question. Efficiency of production may be measured by ____________________.
Answer : Counting the number of pieces produced and number of defective pieces in a batch.

Question. ____________ is an important principle/technique of management control based on the belief that an attempt to control everything results in controlling nothing.
Answer : Management by exception or control by exception.

Question. Revenue to be earned is an example of _____________ (quantitative/qualitative) standards.
Answer : Quantitative

Question. Comparison of actual performance with standards becomes easier when standards are set in ___________ terms. (quantitative/ qualitative)
Answer : Quantitative

Question. ________________ saves the time and efforts of managers as they deal with only significant deviations.
Answer : Management by exception

Question. Deviation in key areas of business need to be attended as compared to deviations in certain insignificant areas this is known is ________________.
Answer : Critical Point control

Question. Time taken by a customer to collect the order placed by him in a fast food chain having self-service is an example of ____________ (quantitative/qualitative) standards.
Answer : Qualitative

Question. The third step in the controlling process involves comparison of actual performance with standard. Such comparison will reveal ___________________.
Answer : the deviation between actual and desired results

Question. In organisation, ______________ are set as the critical points. If anything goes wrong at the critical points, the entire organisation suffer.
Answer : key result areas (KRAs)

Question. The final step in the controlling process is _________________.
Answer : Taking corrective action

Question. As far as possible, performance should be measured in the same units in which standards are set as _________________.
Answer : This would make their comparison easier.

Question. In the controlling process, it is important to determine the acceptable range of deviations because ___________.
Answer : some deviation in performance can be expected in all activities. This 
is known management by exception/control by exception.

Question. The term used to indicate the difference between standard performance and actual performance is called ______________.
Answer : Deviation

Very short answer Questions :

Question. Give meaning of the term ‘deviation’ as used in the control function of management?
Answer. Deviation refers to the difference between actual performance and standard work.

Question. In which situation the need of taking corrective action arises?
Answer. In case of negative deviation.

Question. In controlling process standards were set according to the efficiency of the average employee which value has been kept in mind while setting the standards?
Answer. (i) Increase in the morale of the employees.
(ii) Improving the quality of production.

Question. Which two steps in the process of control are concerned with compelling events to conform to plan?
Answer. (i) Setting performance standards and
(ii) Taking corrective action.

Question. Name the two situations in which corrective action is not required.
Answer. (i) Zero deviation
(ii) positive deviation.

Question. State any one advantage of ‘critical-point control' and ‘management by exception’.
Answer. By taking care of important deviations both time and efforts are saved.

Question. What should be the ‘focus point’ for a manager while controlling as controlling at each and every step is not possible?
Answer. Focus point for a manager While Controlling should be the‘ key result areas’.

Question. Which two standards will you suggest for production department?
Answer. (i) Quality
(ii ) Quantity.

Question. Why is it said that ‘planning is meaningless without controlling?
Answer. Because in the absence of controlling nobody will take it seriously to work according to the plans and hence, the plans will fail.

Question. In a company, employees achieved quantitative standard but could not attain qualitative standards which values have been ignored here?
Answer. i) Production of inferior quality goods.
ii) Exploitation of consumers.

Question. “Comparing the actual performance with the laid standards, finding out the deviations and taking corrective action is an important function of a function of management”. Name the function and explain the process.
Answer : Name of the function is controlling and explain the process of controlling.

Question. There are two managers rahim and pankaj. Rahim is saying that ‘controlling is forward looking’ whereas according to pankaj ‘controlling is looking back’ . Who is correct? Explain why.
Answer : Both managers rahim and pankaj are correct and explain controlling as forward looking and looking back.

Question. “Controlling is a systematic process involving a series of steps.
Answer : “Explain the process/steps of controlling.

Question. Which function of management ensures that actual activities confirm to planed activities?
         Or
name the function which reviews the operations in a business unit.
Answer : Controlling

Question. “In ideal control system is the one that checks every bit of performance”. Do you agree with this statement? Give reasons to support your answer.
Answer : No, i do not agree with this statement. Because a manager should focus on key points only and should not waste his energy in checking every bit.

Question. Employees know 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, which in turn help them to give better performance. Which importance of controlling is highlighted here?
Answer : Improves employees motivation. 

Question. Name the concept which suggests that only significant deviations which go beyond the permissible limit should brought to the notice of management
Answer : Management by exception.

Question. Which function of management ensures work accomplishment according to plQ? Name and explain the importance of the function.
Answer : Controlling is the function of management which ensures work accomplishment according to plans? And explain the importance of the controlling.

Question. Controlling provides direction to all activities and efforts for achieving organizational goals. Which importance of controlling is referred here? Also explain two more of its importance.
Answer : Facilitating coordination in action. Explain two more importance of controlling.

Question. Which technique of control is concerned with the contribution of actual and planed expenditure.
Answer : Budgetary control

Short answer Question :

Question. Love and kush are two friends. both are MBA (final year) students. One day, their professor called them to class stage for a surprise Test. He told that one of them will establish relationship between any two functions of management then the other one, will establish reverse relationship between the same two functions. Both will have to give justification for the relationship explained by them. It was a test carrying 50 marks. But the students were Intelligent and skillful. Love was the first to speak.
Love said that in his opinion of the functions of management selected by him one is always looking ahead (future) and the other is looking back (past).
No sooner did love express his opinion, than Kush identified the function selected by (love). In his reply, Kush said that the one function stated by love to have been looking ahead was in his opinion, looking back and the other one stated by him (love) to have been looking back was looking ahead.
(a) Identify the functions of the management discussed in the above paragraph.
(b) Justify the contrary relations of management functions as viewed by love and Kush.
Answer. (a) Planning and controlling.
(c) Plans are prepared for future and involve looking ahead. On the contrary, controlling is like a postmortem of past activities to find out deviations from the standards. In that sense controlling is a backward looking function. However, it should be understood that planning is guided by past experiences and the corrective action initiated by control function.

Question. Abc ltd. Is manufacturing auto spare parts on large scale. The company policy is that 3% of the daily production could be defective. answer last two months it is observed that about 10-12% of production is defective. Which function of management is reinsured to correct the above case? State the procedure to be followed to correct the things.
Answer : The management function reinsured to correct the above case is controlling. The procedure to be followed is:
1) Find out the causes of deviation of defective percentage from 3 to 12.
2) Take corrective measure to control the things.

Question. “There is close and reciprocal relationship between planning and controlling”. Explain the statement through an example.
Answer : Yes, “there is close and reciprocal relationship between planning and controlling”. Without planning, there is no basis for controlling activities and without controlling planned activities cannot be implemented properly and there cannot be improvement in future plans.

Question. Michel john is a sole proprietor in Nikhobar. He has started trade after getting M.B.A. degree. he is fully familiar of management. He starts his business with the planning function of management. He desires that all his activities should conform to planning. To this effect, he has adopted a system that keeps a constant watch on the business Consequently, there is zero possibility of adverse results. It can, therefore, be said that this method is directly related to the results. Mr. John also believes that this method applies not only to any one level of management but to all the levels as well.
a) Identify the function of management referred to in the aforesaid paragraph.
b) Describe any two importance's of the functions of management as identified under point (a) above.
Answer. (a) Controlling
(b) Two importance of controlling are as under:
(i) Controlling helps in achieving goals: Controlling helps to achieve the goals of the organization by actual work performance with the standards.
(ii) Controlling increases efficiency: Controlling increases efficiency through optimum utilization of all the resources, such as Man, Machine, Material and money.

Question. Explain the principal of ‘critical-point control’ and ‘principal of management by exception’?
Answer.(i) principal of critical-point control: it refers to that concept of management which holds instead of all activities the management should focus its attention on only important activities.
(i) Principal of management by exception: it refer to that principal of organizational control which holds that only significant deviations (i.e., exceptions) should be brought to the top management attentions.

Question. Explain two causes of deviations and corrective action to be taken?
Answer.Cause of deviations-
(i) Human causes: The efficiency of the employees is the chief cause among the human cause.
(ii) Uncertain events: It includes strikes lockouts, shortage of raw material, entry of many competitors in the market, etc.
Corrective Action
(i) Corrective action should be taken only after a careful inquiry into the causes of deviations.
(ii) If the wrong standards had been determined, they should be modified.

Question. Explain any three feature of controlling?
Answer. (i) Controlling is a fundamental management function:
(ii) Pervasive function:
(iii) Controlling is a continuous activity:

Question. After setting the performance standards the next step in the controlling process is the ‘measurement of actual performance’. Explain this step in the process of controlling?
Answer. The second step in the process of controlling is the measurement of actual performance. The measurement of actual performance is done on the basis of predetermined standards. The measurement of actual performance tells the manager whether the work has been done according to the plan or not.
Performance should be measured in an objective and reliable manner which includes personal observation, sample checking. Performance should be measured in same terms in which standards have been established, this will facilitate comparison.

Question. “Prakash limited” is accompany manufacturing electrical goods Smt. Ruby is its managing director. By virtue of her wise directions, the company has achieved great heights. A management institute one day invited her for a lecture. There she got an opportunity to dialogue with the students of management studies. She narrated to them the story of her success. She told them two main things, First: the employee should know that their work is being evaluated and progress report prepared. Second, optimum use of physical resources should be made possible.
a) Identify the above said function of the management.
b) On the basis of the aforesaid paragraph write two point regarding the importance of the function of management as identified in point (a) above.
Answer. (a) Controlling
(b) Two importance of controlling are as under:
(i) Controlling helps in achieving goals: Controlling helps to achieve the goals of the organization by actual work performance with the standards.
(ii) Controlling increases efficiency: Controlling increases efficiency through optimum utilization of all the resources, such as Man, Machine, Material and money.

Question. Which two steps in the process of controlling are concerned with compelling events to confirm to plan? Explain.
Answer : (i) Comparison of actual performance with standards : When actual performance is measured, its results are compared with standards. By this comparison, deviation between actual performance and standard performance is derived.
(ii) Taking corrective actions: After the analysis of deviations, corrective action is taken. What type of corrective action will be taken depends on the factors causing the deviations.

Question. How is critical point control applied in controlling process?
Answer : Every organization identifies its Key Result Areas/ Critical Points which have significant effect on the working of business. Any deviation on these points should be attended urgently by Management.
EXAMPLE: If the expenditure on refreshment goes up by 10% it can be ignored but if cost of raw material goes up by 5% it requires managerial action.

Question. How does dose controlling help in ―Judging accuracy of standards‖ and ―Ensuring order and discipline?
Answer : Judging Accuracy of Standards. Controlling enables management to verify whether standards set are accurate and objective.
Ensuring Order and Discipline. Controlling ensures maintenance of order and discipline by putting checks on undesirable activities of the employees.

Question. White Enterprises was a renowned name for manufacturing quality washing machines since 1965. When the profit of the last year declined Mr. Anand, the owner of White Enterprise, asked the General Manager to prepare a profitability report of the company including Gross Profit Ratio, Net Profit Ratio etc, besides using other techniques to assess the company‘s performance. Identify the step taken by Mr Anand which is related to one of the functions of management.
Answer : Controlling and steps in controlling.

Question. Asian Ltd is a large company engaged in assembly of air-conditioner. Recently the company had conducted the various scientific management studies and concluded that on an average a worker can assemble eight air- conditioners in a day. The target value of a company in a day is assembling of 800 units. The company is providing attractive allowances to reduce labour turnover and absenteeism. All the workers are happy. Even then the assembly of air –conditioner per day is 650 units only. To find out the reason the company compared 50 actual performance of each worker and observed through C.C.T.V. that some of the worker was busy in gossiping.
a. Identify the function of management discussed above.
b. State those steps in the process of the function identified which are discussed in the above paragraph.
Answer : The process/function of management discussed above is Controlling. The steps of
Controlling are:
1. Setting Performance Standards: As a first step, standards are set for the performance. Standards are the criteria on the basis of which effectiveness of a performance is considered as desirable.
2. Measuring Actual Performance: When various actions are undertaken, these produce actual performance. This performance is measured in the form in which standards have been set.
3. Comparing Actual Performance with Standards: When actual performance is measured, its results are compared with standards. By this comparison, deviation between actual performance and standard performance is derived.
4. Analysing Deviations: If deviations are found, these are analysed. For analysing deviations, two concepts-critical point control and management byexception-are used to save time. If deviations are beyond the acceptable range, factors responsible for these are identified.
5. Taking Corrective Action: After the analysis of deviations, corrective action is taken. What type of corrective action will be taken depends on the factors causing the deviations.

Long Answer Questions :

Question. Explain the various steps in the process of controlling?
Answer. Steps in the process of controlling
[1] Setting Performance Standards: Standards serve as criteria against which actual performance would be measured. It can be both in terms of quantitative and qualitative.
[2] Measurement of Actual Performance: Performance should be measured in an objective and reliable manner.
[3] Comparison of Actual Performance with Standards: in this steps actual performance are compared with standard such comparis on reveals deviations.
[4] Analyzing deviations: This step compels events to conform to plans. Deviations are the errors or weakness which may occur in the process of achievement of goals and the manager has to rectify them. The acceptable range of deviations must be determined.
[5] Taking Corrective Action: It is necessary to identify the exact deviation to take corrective action. This step compels events to conform to plans.

Question. Mr. Jai Prakash Gupta is the general manager of “ Bhagwati Udyog pvt. Ltd.” With a view to running his business in a careful manner, he divided all the activities into seven departments. These Departm-ents were: purchase, Marketing, production, personnel, finance, Accounting and Correspondence. Later on, he realized that accounting and correspondence department can be merged into finance department. Thus, all business activities were divided into five departments. Mr. Gupta is now thinking on the lines as to which are the department, out of these five that will have significant role in the success of the business, After complete analysis, he concluded that marketing, production and finance were the department on which success of the business depended, It meant that even of some shortcoming occurred in the departments of purchase and personnel, it would not affect much the success of the business, Thereafter, Mr. Gupta determined deviation tolerance limits of these three main departments. It meant that if deviation of these departments remains within this tolerance limit, then it will be looked after by the concerned manager. However, in case the deviation is beyond this limit that same will be brought to the notice of General Manager.
(a) Identify two function of the management referred in the above paragraph (b) Describe the relevant concepts of identified functions.
Answer. (a) Organizing and controlling
(b) (i) Concept related to organizing-Under it, second step of organizing process i.e., departmentalization is involved.
(ii) Concept related to Controlling-Following two concepts are related to controlling
(a) Critical point control- it is the concept of management which holds instead of all activities the management should focus its attention on only important activities.
Management by Exception- it refer to that principal of organizational control which holds that only significant deviations (i.e., exceptions) should be brought to the notice of management.

Question. Explain the relationship between planning and controlling?
Answer. Relationship between Planning and Controlling:-
Planning and Controlling, both are major and interdependent functions of management. On one hand, planning provides the base for controlling, on the other hand controlling Ensures that plans are successfully converted in to reality. The relationship between planning and controlling can be analyzed in two parts: -
1) Interdependence
2) Difference
Interdependence: -
One of the famous management experts had said that, “Planning is meaningless without controlling and controlling is blind without planning.” Planning provide the base for controlling. It means that planning sets the objectives, decide the future course of action for the firm. It provides the basic framework for all other activities of management including controlling.
In the same way controlling process cannot be performed, until and unless we have planned something in advance. If the standards are not determined, there is no justification left for controlling.
Difference:-
Planning and Controlling both are opposite looking functions because plans are always made for future, whereas controlling is a backward looking function in which at the completion of process, manager tries to find whether it has been done according to plan or not. Planning is the first function of management. All the other function follows it, whereas controlling is the last function, which follows all the other functions of management.