Gujarat Board GSEB Textbook Solutions Class 12 Organization of Commerce and Management Chapter 7 Controlling Textbook Exercise Important Questions and Answers, Notes Pdf.

Gujarat Board Textbook Solutions Class 12 Organization of Commerce and Management Chapter 7 Controlling

GSEB Class 12 Organization of Commerce and Management Controlling Text Book Questions and Answers

1. Select the correct alternative and write answer to the following questions :

Question 1.
Which function of the management process sees that the work is performed according to planning?
(A) Organizing
(B) Training
(C) Directing
(D) Controlling
Answer:
(D) Controlling

Question 2.
Controlling is not a process.
(A) Continuous
(B) Internal
(C) Rigid
(D) Dynamic
Answer:
(C) Rigid

Question 3.
_________ is the process of maintaining balance between efforts and results and between resources and objectives.
(A) Directing
(B) Staffing
(C) Co-ordinating
(D) Controlling
Answer:
(D) Controlling

Question 4.
Controlling takes place at level.
(A) Every
(B) Top
(C) Middle
(D) Bottom
Answer:
(A) Every

Question 5.
Which is not the function of controlling?
(A) Progress of activities
(B) Comparison with set standards
(C) Determining objectives
(D) Getting information about deviations
Answer:
(C) Determining objectives

Question 6.
Which function of management is known as the father of controlling?
(A) Organizing
(B) Staffing
(C) Directing
(D) Planning
Answer:
(D) Planning

Question 7.
_________ is the last function of management.
(A) Planning
(B) Organizing
(C) Staffing
(D) Controlling
Answer:
(D) Controlling

Question 8.
_________ is the first stage of the controlling process.
(A) Measuring performance
(B) Comparing actual performance against set standards
(C) Corrective action
(D) Setting standards
Answer:
(D) Setting standards

Question 9.
After knowing the deviations, what type of measures does the management take?
(A) Gives training
(B) Removes the staff
(C) Corrective action
(D) Appoint experts
Answer:
(C) Corrective action

Question 10.
What should be done when the organization obtains better results than set standards?
(A) Improve and set lower standards
(B) Improve and set higher standards
(C) No change in set standards
(D) To remove standards
Answer:
(B) Improve and set higher standards

2. Answer the following questions in one sentence each :

Question 1.
With which functions of management is planning closely related?
Answer:
Controlling

Question 2.
At which level of management function does controlling take place?
Answer:
At all levels of management

Question 3.
Before which fuention must all functions of management be performed?
Answer:
All the functions of management must be functions of management be performed before controlling.

Question 4.
Why is it necessary to measure performance?
Answer:
By measuring performance we can know whether the processes are performing as per the set standards and control limit or not.

Question 5.
What is deviation?
Answer:
The difference between actual figures as compared to the planned figures is called deviation. (Statistically, it is called variance.)

Question 6.
Which external factors jeopardize the very existence of a business?
Answer:
External factors such as government policy, competition, changes in market scenario, inflation, shortage of raw material, preference of people, change in fashion, etc.

3. Answer the following questions in short :

Question 1.
Give the meaning of controlling.
Answer:

• In layman language, controlling means deciding the activities to be carried out, evaluate, the same and if required, take corrective measures so that they are done in conformity with plan developed by the organization.
• Controlling is the last step of management process.
• Although controlling is considered as the last step, function of controlling starts as soon as the activities are assigned right in the first stage i.e. the stage of planning.
• According to Peter F. Drucker, “Controlling is to maintain a balance between efforts and results and between resources and objectives.”

Controlling takes care of:

• Checking the progress of managerial tasks
• Comparing them with the standards set by the organization
• Identify deviations between the organizational standards and the actual work going on in the organization
• Remove such deviations by taking corrective actions

Question 2.
‘Controlling is a continuous process’ – Explain.
Answer:
Continuous process:

• Controlling is an ongoing process. It never ends.
• It is wrong to believe that once control is exercised on the activities of the enterprise, work will always be done according to the plan.
• Deviations from the set plan can occur at any level and at any time. Hence the organization constantly needs to supervise and control the activities done at various levels.
• In the controlling function, quality control and cost control are important activities that need to be constantly controlled.

Question 3.
How is controlling an internal process?
Answer:
Internal process:

• Controlling is an internal process for the organization.
• Control system plays an integral role in all the important activities of the organization such as production, sales, purchase, financial matters, financial accounts and working method of employees, etc.
• Since all these activities are part of business, they can be controlled. On the other hand, change in government policy, depression, inflation, changes in the psychology of people, etc. are external factors and hence cannot be controlled.

Question 4.
‘Controlling is a dynamic process’ – Explain.
Answer:
Dynamic process:

• Although what to control and how to control is pre-decided in the planning and controlling functions, it is quite likely that the parameters of control may change continuously depending upon situations.
• If the organization identifies deviations in its processes, it takes quick decision in its control methods to normalize these processes. Hence, it is said that although controlling is a planned function, it is a dynamic process.

Question 5.
‘Planning is the father of controlling’ – Explain.
Answer:
Planning is the father of controlling:

• Controlling exists because of planning. Controlling keeps a check on activities decided in planning.
• In short, controlling does not exist without planning.
• Hence, it can be said that planning is the father of controlling.

4. Answer the following questions in brief :

Question 1.
Explain the relation between planning and controlling.
Answer:

• Planning is a systematic and intellectual method to achieve objectives. Planning clarifies the reason as to why specific activities will be needed to be done in the future.
• Planning also outlines when and in how much time will the decided activities be completed and for that what resources will be needed so that goals can be achieved.
• On the other hand, control is a process to monitor whether business activities are carried out according to the plan, set standards and given instructions. If deviations are found, then corrective actions are taken.
• Whenever there is planning there is controlling and conversely whenever there is controlling planning pre-exists.Thus planning and controlling are interrelated.

Question 2.
‘Planning and controlling are two sides of the same coin’ – Explain.
Answer:
Planning and controlling are two sides of the same coin:

• Planning and controlling are two very important and interdependent functions of the management process. The success of planning depends on Controlling.
• The function of controlling identifies deviations, takes necessary corrective action and hence keeps the business activities on the decided direction.
• Looking from other perspective, the role of controlling comes only when something is planned. So, if there is no planning, there is no controlling.
• Thus, planning and controlling are two sides of the same coin.

Question 3.
‘Controlling is not a negative function.’ – Justify the statement.
Answer:

• A general perception towards controlling is that under it a person is always monitored and hence his freedom is lost.
• This perception has been developed from older management system where in the business owners used to keep a very strict supervision on their organizations.
• Such supervision created a fear of making mistakes and a negative environment.
• The real objective of controlling is not to spread fear but to encourage innovation and quality production. Systematic controlling leads to lesser mistakes, higher quality and production and improved productivity.
• This also creates opportunity for employees to improve upon their mistakes and personal efficiency.
• Thus, controlling is not a negative but a positive function.

Question 4.
Is controlling an end activity of management? Why?
Answer:
It is an end activity of management:

• In the management process, the planning function decides organizational objectives, organizing function implements them and directing gives direction. After these functions, the actual role of controlling begins.
• Thus, it is very important that all managerial functions are performed before control is exercised. As a result, control is the end activity of management.

5. Answer the following questions in detail :

Question 1.
Explain the characteristics of controlling giving its meaning.
Answer:
Meaning:

• In layman language, controlling means deciding the activities to be carried out, evaluate, the same and if required, take corrective measures so that they are done in conformity with plan developed by the organization.
• Controlling is the last step of management process.
• Although controlling is considered as the last step, function of controlling starts as soon as the activities are assigned right in the first stage i.e. the stage of planning.
• According to Peter F. Drucker, “Controlling is to maintain a balance between efforts and results and between resources and objectives.”

Characteristics of controlling:
1. Controlling is related to planning:

• Planning and controlling are the two sides of the same coin.
• Planning function makes the plan whereas controlling ensures that activities are carried out according to the plan.
• It is said that planning and controlling are like twins. If there is no planning, there is no scope of controlling.

2. Functions at every level of management:

• Controlling is performed at every level of management. It is not confined to one department or section.
• Managers of each level control their subordinates at their respective levels.
• Controlling is done quite systematically even at the lowest level of workers by their supervisors.

3. Continuous process:

• Controlling is an ongoing process. It never ends.
• It is wrong to believe that once control is exercised on the activities of the enterprise, work will always be done according to the plan.
• Deviations from the set plan can occur at any level and at any time. Hence the organization constantly needs to supervise and control the activities done at various levels.
• In the controlling function, quality control and cost control are important activities that need to be constantly controlled.

4. It is an end activity of management:

• In the management process, the planning function decides organizational objectives, organizing function implements them and directing gives direction. After these functions, the actual role of controlling begins.
• Thus, it is very important that all managerial functions are performed before control is exercised. As a result, control is the end activity of management.

5. Related to future:

• Although controlling is done at every stage on day-to-day basis, its core objective is to minimize deviations and errors in processes so that end product or service comes out as planned. In this sense, it can be said that control is related to future.
• Controlling also helps the manager to examine past activities and analyse them so that he can learn from past mistakes and prevent them in future.
• The objective of control is to see that errors, wastage and losses which occurred in the past are not repeated or if repeated their frequency decreases.

6. It is a constructive activity:

• A general perception towards controlling is that under it a person is always monitored and hence his freedom is lost however, this belief in incorrect.
• In fact, the real objective of control is to see that workers work as per the plan and that they are guided properly to overcome mistakes and deviations.
• Thus, controlling is not a negative, but a positive as well as constructive activity.

7. Internal process:

• Controlling is an internal process for the organization.
• Control system plays an integral role in all the important activities of the organization such as production, sales, purchase, financial matters, financial accounts and working method of employees, etc.
• Since all these activities are part of business, they can be controlled. On the other hand, change in government policy, depression, inflation, changes in the psychology of people, etc. are external factors and hence cannot be controlled.

8. Dynamic process:

• Although what to control and how to control is pre-decided in the planning and controlling functions, it is quite likely that the parameters of control may change continuously depending upon situations.
• If the organization identifies deviations in its processes, it takes quick decision in its control methods to normalize these processes. Hence, it is said that although controlling is a planned function, it is a dynamic process.

9. Controlling is a person-oriented or subjective activity:

• Controlling is done for the improvement of the activities of workers, by the workers and for the workers. Thus, ‘person’ is at the center of controlling.
• Hence, it is said that control is majorly person-oriented i.e. is subjective.

10. Controlling can be formal or informal:

• Controlling is an extremely important function.
• In an organization, what to control, how to control and who will control what is defined very systematically and scientifically.
• During the actual processes, it is quite likely that the format of control might need on-site change. So, many a times, the format of controlling becomes informal and the changes are brought stepping aside from the format.

Question 2.
Explain the importance of controlling.
Answer:
Importance of controlling:

• A controlled organization steers to the right direction. An organization without proper implementation of control is like a chariot without charioteer.
• Controlling is necessary for the achievement of managerial objectives.The main objective of controlling is to check the errors or short comings of the past and stop their recurrence.

Following points bring out the importance of controlling:
1. Helps in achieving objectives:
Controlling helps to identify errors in the enterprise and take corrective measures. As a result it becomes easy to achieve objectives of the enterprise.

2. Control on activities:
Controlling controls functional areas and activities like organization, production, sales, employees, financial and quality aspects, etc.

3. Makes planning effective:

• It is said that planning lays the path and controlling helps to find the deviations and improve them.
• In this regard, it is said that controlling helps in achieving objectives and making the plan successful as well as effective.

4. Co-ordination between various activities:
Controlling helps in coordinating various activities of the business enterprise.

5. Evaluation of activities:
Under coordination, the activities are compared with pre-determined standards and then evaluated.

6. Removes deviations:
Controlling aims at correcting deviations. It examines the causes of deviation and then takes corrective measures so that deviations can be reduced.

7. Necessary for delegation of authority:

• Controlling is important for delegating authority.
• Once the authority is delegated, the supervisor or authorized personnel supervises and controls the activity.

8. Find out errors:

• Controlling supervises and evaluates the activities of subordinates.
• Controlling also helps to find out errors, difficulties, defects and deviations and remove them so that they are not repeated in future.

9. Long term planning:

• Controlling helps to make long term plans.
• Control can be used to make long term assumptions and forecasts for the business on the basis of the information gathered during controlling activities.

10. Helps in directing:
Controlling simplifies directing. It supervises the personnel, gives guidance and direction in their difficulties so that activities are performed as planned.

11. Barometer of efficiency:
In business enterprises if control is exercised efficiently, management becomes more efficient. So controlling is called the barometer of efficiency of management.

Question 3.
Explain in detail the various stages of the controlling process.
Answer:
Stages of controlling process:

• Controlling is a universal and continuous process.
• Each business enterprise has its own procedures of conducting activities.
• Hence, the process of controlling does not remain same for each organization.

As a result, it is difficult to define specific step-wise stages of controlling. However, some stages are generalized and discussed below.

1. Setting standards:

• The first stage of controlling is to set standards. Standards measure efficiency of the processes and people.
• By setting standards, the organization can compare if the activities are taking place according to the set standards.
• Unless standards are set, it is not possible to decide what to control and how to control.
• These standards can be both qualitative and quantitative.
• The standards could be set for cost price, income, capital, profit targets, production targets, cost targets, etc.
• Standards may be set for long term or short term.
• Standards are decided at the top level management. Employees and subordinates are informed about the same.
• The employees then plan their work according to the given targets and they constantly strive to maintain these standards.

2. Gathering information:

• In this stage, information (in the form of data) is gathered about business processes.
• Methods of gathering information include personal observation, data collection from the processes and oral and written reports.

3. Measuring performance:

• After gathering information about the performance of the business performance, the set parameters are measured.
• The objective of measuring is to obtain data from the various processes of the organization so that it can be later compared with the set standards.
• Measurement can be either qualitative or quantitative or both.

4. Comparison of work done with set standard:

• The information measured is then compared with the standards set under the control function.
• Comparison helps the organization to decide whether the set standards have been achieved or not.

5. Corrective measures:

• Corrective measure is the last stage of the controlling process.
• In the fourth stage, the activities are compared against set standards to find out deviations. If deviations are present, necessary corrective measures can be taken.

Any of the following three corrective measures can be taken:
(a) No change in the condition:
If the deviations are minimal and acceptable, then there is no need to take corrective action. This means there is no change in the condition (process).

(b) Change the condition to remove deviation:
If deviation from actual performance is more when compared to set standards, such deviations are to be examined and necessary corrective measure is to be taken.

(c) Change the condition and establish fresh (new) standards:

• If the established standards are not attained continuously, it clearly means that the standards are too high to meet.
• In such a situation, fresh or new standards are to be set by making required changes.
• Similarly, if deviations occur on the positive side i.e. if the results from the processes exceed the standards and expectations then the organization needs to set higher standards.
• By making such changes, the organization will take its processes to a higher level of performance.