Case Studies – (Chapter 7) Directing

Q. 1. Ayesha Ltd. assured their employees that in spite of recession no worker will be
retrenched from
the job.
(i) Name and explain the type of incentive offered to the employees. (ii) Explain one more
incentive of the same category.
Ans. (i) Job security
(ii) Explain one more incentive of the same category.
a) Employee’s recognition.
b) Organizational climate.
Q. 2. Blue Birds Ltd. Offers to its employees issue of shares at a price which is less than the
market price.
(i) Name and explain the type of incentive offered to the employees.
(ii) Explain one more incentive of the same category.
Ans. (i) Co-partnership/Stock option.
(ii) Other incentives: (a) Pay and allowance, (b) Bonus.
Q. 3. ABC Ltd. Is not able to achieve its objective on analyzing, they found that employees were
not given their best, so he decided to announce an incentive plain, which offers various
incentives to employee workers at different level for achieving their target.
(i) Which element of directing is used by manager?
(ii) Suggest incentive suitable for:
1. Employees operating at lower level.
2. Employees operating at higher level.

Ans. (i) Motivation is missing.

(ii) (a) Lower level: offer monetary incentives.
(b) Higher level: non-monetary incentive.

Q. 5. Is directing required at planning stage? Name the element of directing function under
which:
(i) The superiors oversee the activities of their subordinates.
(ii) The superiors assure the subordinates that their needs will be taken care of.
(iii) The superior attempts to influence the behavior of people at work towards the realization of
specified goals.
(iv) The superior share information with the subordinates in order to reach common
understanding.
Ans. No, directing is not required at planning stage since it is an executive function. It initiates
action in the organization while other functions of management (planning, organizing, staffing
and controlling)
just prepare a setting for action.
(i)Supervision (ii) Motivation (iii) Leadership (iv) Communication.
Q. 6. Amit and Mikki are working in the same organization but in different departments. One day
at lunch time Mikki informed Amit that due to computerization some people are going to be
retrenched from the organization.

Name which type of communication is this. State any two limitations of this type of
communication.
Ans. Informal Communication
Limitations:
1. The grapevine/informal communication spread rapidly and sometimes get distorted. It is very
difficult to detect the source of such communication.
2. It also leads to generate rumors. People’s behavior is affected by rumors and informal
discussion and sometimes may hamper work environment.
Q. 7. You are working at the middle level of management. Your superior, top management
personnel sent a message for you which you received and well understood. Is the
communication process complete? Give reason.
Ans.No, the communication process is not complete unless and until feedback is given to the
superior. Feedback includes all those actions of the receiver indicating that he has received and
understood the message of sender. So, I must respond to communication to improve its
effectiveness, e. g., by giving a reply to letter, giving reactions to the message, etc.
Q. 8. Rakesh is working under his superior Neeraj. He always communicates useful ideas and
suggestions to his superior regarding reduction of cost, improvement in the product, etc. Neeraj
implements his suggestions and has always found favourable results, but he never appreciates
Rakesh for his suggestions. Now Rakesh decided not to communicate any suggestion or idea to
Neeraj. Identify the factor which acts as a communication barrier.
Ans. Lack of proper incentives (Personal Barriers to Communication)
Q.9. Ankur is working as a production manager in an organization. His subordinate Saurabh
discussed with hi a method o production which will reduce the cost of production. But due to
some domestic problems and Ankur’s mind being pre-occupied he is not in a position to
understand the message. Saurabh got disappointed by this. Identify the factor which acts as a
communication barrier.
Ans. Lack of attention (Psychological/Emotional Barriers to Communication)
Q.10. Rajat a Sales Manager achieved his sales target one month in advance. This
achievement as displayed on the notice board and the CEO of the Company awarded a
certificate for the best performance to him. Name the incentive provided to Rajat.
Ans. The incentive provided to Rajat is – ‘Recognition’.
Q. 11. A behavior study was done on total of 100 employees of an organization. Group A (of 50
employees) were appreciated by the manager for their work and initiative for new idea. All these
employees were given option of flexible working hours and were paid wages at a higher piece
rate. On the other hand, Group B (of remaining 50 employees) was criticized for their poor
performance. Their increments were stopped and they were paid wages at a lower piece rate.
(a) Identify and explain the feature of motivation highlighted in the above case. (b) What type of
leadership is followed by the manager? Justify your answer.
Ans.
 1. Motivation can be either positive or negative. Positive motivation provides positive rewards
like increase in pay, promotion, recognition, etc. Negative motivation uses negative means like
punishment, stopping increments, threatening, etc.
2. Autocratic leadership style.
The leader’s following is based on the assumption that reward or punishment both can be given
depending upon the result.

Q. 13. Prachi is working in an MNC. She has been given an option to buy the shares of the
company at an amount less than the market price because of her performance as an incentive.
Identify which incentive is being given to her.
Ans. Co-partnership/Stock option.
Q. 14. Ms. Singhal, Production Manager and Mr. Sarthak, Marketing manager of an electronics
company are not on talking terms with each other. Because of that they do not transfer complete
information to each other.
(a) Identify the element of directing which becomes ineffective due to the behavior of the
managers. (b) Also, explain the factor which led to their behavior.
Ans. (a) Communication
Distrust (Psychological barrier)
Distrust between sender and receiver causes failure of communication. If they do not believe
each other, they cannot understand each other’s message in its original sense.
Q. 15. Huma is working in a company on a permanent basis. As per job agreement she had to
work for 8 hours a day and was free to work overtime. Huma worked overtime, due to which she
fell ill and had to take leave from her work. No one showed concern and enquired about her
health. She realized that she was fulfilling only some of her needs while some other needs still
remained to be fulfilled.
(i) By quoting the lines from the above para, identify the needs of Huma which she is able to
fulfill.
(ii) Also explain two other needs of Huma followed by the above needs, which still remained to
be satisfied.
Ans.
(i) ‘Huma is working in a company on a permanent basis’.
According to above line Huma is able to fulfill her following needs:
(a) Physiological needs (b) Safety or Security needs
(ii) Needs of Huma which still remained to be satisfied are:
a) Affiliation Need: It refers to the need for affection, since to belongingness, acceptance and
friendship.
b) Esteem Need: It refers to the need for self-respect, autonomy, status, recognition and
attention.
Q. 16. 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 beaviour is good towards the employees. His
attitude is always positive. So he announced various incentive schemes for the employees like;
 Installing award or certificate for best performance.
Rewarding an employee for giving valuable suggestion.
Congratulating the employees for good performance.
1. Identify the functions of management highlighted in the above paragraph.
2. State the ‘incentive’ under which the employees are motivated.

Ans.
1. Directing and Controlling
2. Employee recognition programme (non-monetary incentive)
3. Value: Sensitivity of environment & Good behavior towards employees.

Q. 17. NOTICE
A meeting of all supervisors is scheduled on 20th August, 2016
This notice was placed on the notice board in the reception area of XYZ Ltd. But it did not
mention clear specification regarding the time of meeting. Which barrier of communication is
referred to here? Explain any two other forms of barriers to effective communication under the
same category.
Ans. Badly expressed message (Semantic barriers) – Use of wrong words, omission of needed
words, inadequate vocabulary, etc.
(a) Symbols with different meanings: A work may have several meanings. For example,
consider these three sentences where the work ‘value’ is used:

What is the value of this ring?

I value our friendship.
What is the value of learning compute skills?
Wrong perception by the receiver leads to communication problems.
(b) Faulty translations: Sometimes, the communications originally drafted in one language (say,
English) need to be translated to the language understandable to workers (say, Hindi). If the
translator is not proficient with both the languages, communication becomes ineffective.
Q. 18. Mr. Sandeep is the marketing manager of a company manufacturing designer clothes.
One day, in the morning while leaving home he had a quarrel with a person in his neighborhood
on some issue. That person is a criminal who could abuse his family members. Mr. Sandeep, on
that day, is very worried and angry too on the behavior of the neighbor person. On that day, a
meeting was held by a team of marketing and design experts to ensure that whatever is
produced is according to market demand and tastes and fashion of the customers. But Mr.
Sandeep could not pay attention to the discussion between them.
(a) Identify the type of barriers to communication mentioned in the above para. Justify your
answer. (b) Explain any two such barriers to communication.
Ans.
(a) Psychological barriers.
These are related to the state of mind of both sender and receiver of communication. For
example, a worried person cannot communicate properly and an angry receiver cannot
understand the real meaning of message.
‘Mr. Sandeep is very worried and angry on that day. So he could not pay attention to the
discussion in the meeting.’
(b)Psychological barriers to communication:
Q. 19. Mrs. Rajlaxmi is working as the Human Resource Consultant in a firm manufacturing
cosmetic, which is facing a problem of high employee turnover. The CED of the company has
invited suggestions from her for retaining the talented employees & reducing the employee
turnover. Mrs. Rajlaxmi recommends that the good employees be rewarded in a way that it
creates a feeling of ownership among the employees and at the same time makes they
contribute towards the growth of the organization.
(a) Identify the incentive and explain its type, which has been suggested by Mrs. Rajlaxmi to the
CEO of the company.
(b) Also explain any two other incentives of the same type.
Ans.
a) Financial incentive.
Co-Partnership/Stock Option
i. Lack of attention: the pre-occupied mind of receiver and the resulting non-listening of
message acts as a major psychological barrier.
ii. Premature evaluation: Sometimes people form a judgment before the sender completes his
message, which causes failure of communication.

b) Other financial incentives:

1. Pay and allowances: For every employee, salary is the basic financial incentive. It includes
basic pay,
dearness allowance and other allowance. Pay hike and increments improve performance level
of
employees.
2. Profit sharing: Employees are given a share in the profits of the organization. This motives
them to
improve their performance and contributes to increase in profits of the organization.
Q. 20. Mr. Bhuvan is the marketing manager of the company manufacturing designer clothes.
One day in the morning while leaving home, he had a quarrel with the person in the
neighborhood. That person abused his family and threatens to harm the family. Mr. Bhuvan got
very upset and worried. On the same day a meeting was organized in the office to finalize the
design according to market demand and taste the fashion of the customers. Mr. Bhuvan could
not pay attention to the discussion as he was thinking about the quarrel only.
(a) Identify the type of barrier to communication mention in the above para. (b) State any other
two barriers of same category.
Ans.
a) Psychological barrier Lack of attention.
b) (i) Premature evaluation
(ii) Loss by poor retention.
Q. 21. Rajiv is working as Personal Manager in a company. The specialty of the company is that
financial position of all the employees is good. The employees working here are honest punctual
and hardworking. The CEO of the company asked him to suggest a method of motivation. The
CEO asked him to suggest a method which is happily accepted by all the employees.
Rajiv spoke to many employees in this connection. Some employees suggested give more
importance to individual autonomy, another suggested good performance should be appreciated
another group suggested to award, certificate, trophies to recognize the good performance. Mr.
Rajiv mixed all and suggested a method of motivation to CEO. The CEO happily accepted that
and it was immediately implemented. Within few days the company’s growth rate appeared to
have become fast.
1. Identify the functions of management indicate in the above paragraph.
2. Which motivation methods were suggested by different group of employees?
3. Which motivation method combines all the above stated and was suggested by personal
manager?
Ans.
1. Directing.
2. (i) Recognition
(ii) Autonomy
3. Organizational climate. (i) Ethical behavior
(ii) Motivating employees
(iii) Taking Suggestions from employing.
Q. 22. Pramod was a supervisor at an ‘Annapurna Aata’ factory. The factory was producing 200
quintals of Aata every day. His job was to make sure that the work goes on smoothly and there
was no interruption in production. He was a good leader who would give orders only after
consulting his subordinates and work out the policies with the acceptance of the group.
Identify and describe the leadership style being adopted by Pramod.
Ans. Democratic style of leadership.
A democratic leader favors decision making by the group. This improves the attitude of the
employees towards their jobs and the organization thereby increasing their morale.
Using this style is of mutual benefit – it allows them (subordinates) to become part of the team
and helps leaders (seniors) to make better

Q. 23. Neeraj, a sales representative of ‘Omida Ltd’ has changed seven jobs in the last one
year. He is a hard working person but is not able to finalize deals with the customer due to his
inadequate vocabulary and omission of needed words. Sometimes he uses wrong words
because of which intended meaning is not conveyed. All this created a mis-understanding
between him and his clients. (a) Identify the communication barrier discussed above.
(b) State the category of this communication barrier.
(c) Explain any other communication barrier of the same category.
Ans.
a) Badly expressed message
b) Semantic barrier, which arises from problems and obstructions in the process of encoding
and decoding
of message into words or impressions.
c) Technical jargon; Specialists use technical language or jargon while explaining to the
workings, e.g.,
tariff, quotas, etc. Therefore, they may not understand the actual meaning of many such words.
Q. 24. Smita had been working as an assistant manager with ‘Johnson Enterprises’ for the last
ten years. She was very popular amongst her colleagues because of her commitment and
dedication towards the work. When the manager senior to her retired, all her colleagues thought
that now Smita would be promoted. But to everyone’s surprise the vacant post was filled by an
outsider, Mrs. Rita. Smita felt demoralized and her performance started declining. She would
abstain herself often and could not meet her targets.
Mrs. Rita was a good leader, who would not only instruct her subordinates but would also guide
and inspire them, she noticed Smita’s behaviour and felt that her performance could be
improved. She started involving Smita in decision making-issues related to the organization and
made her a part of high level joint-management committed. Smita was now punctual in office
and her performance started improving.
1. Identify the function of management being performed by Rita.
2. Name the element of the above function of management which helped Rita to improve
Smita’s
behavior.
3. State any three features of the element identified in (ii) above.
Ans.
1. Directing
2. Motivation
3. Features of motivation:
a) Motivation is an internal feeling: The urge, desires, aspirations or needs of people, which are
internal, influence human behavior.
b) Motivation produces goal-directed behavior: For example, if the employee is interested in
promotion, it helps to produce a behavior to improve performance.
c) Motivation can be either positive or negative: Positive motivation provides positive rewards
like increase in pay, promotion, recognition, etc. Negative motivation uses negative means like
punishment, stopping increments, threatening, etc.
Q. 25. Rahim was working in an enterprise on daily wages basis. It was difficult for him to fulfill
the basic needs of his family. His daughter fell ill. He had no money for his daughter’s treatment.
To meet the expenses of her treatment, he participated in a cycle race and won the prize money.
The cycle company offered him a permanent pensionable job which he happily accepted.

(i) By quoting the lines from the above para identify the needs of Rahim that are satisfied by
the offer of Cycle Company.
(ii) Also, explain two other needs of Rahim followed by above that are still to be satisfied.
Ans.

(i) Needs of Rahim that are satisfied by the offer of cycle company are Physiological and
safety/security needs.
‘The cycle company offered him a permanent pensionable job’.
(ii) The other needs followed by the above stated needs that are still to be satisfied are:
a) Affiliation/Belongingness needs: These needs refer to the need for affection, sense of
belonging, acceptance and friendship.
b) Esteem needs: These needs refer to the need for self-respect, autonomy status, recognition,
etc.
Q. 26.Y Ltd. Is a bank functioning in India? It is planning to diversify into insurance business.
Lately, the government of India has allowed the private sector to gain entry in the insurance
business. Previously, it was the prerogative of LIC and GIC to do insurance business. But now
with liberalization of the economy and to make the field competitive other companies have been
given licenses to start insurance business under the regulation of ‘Insurance regulatory and
development Authority’.
Y Ltd. Plans to recruit high quality employees and agents and exercise effective direction to
capture a substantial part of life and non-life insurance business.

1). What financial and non-financial incentives can the company use for employees and agents
separately
to motivate them?
2). How can the company ensure that higher order needs i.e., esteem and self actualization as
specified by
Maslow are met?
3)How can the company follow formal communication system?
4)How can informal communication help to supplement formal communication?
Ans.

1)To the employees, the company can give pay and allowances, bonus, retirement benefits,
perquisites (e.g., car allowance), recognisation, promotion, job security etc. to motivate them for
higher performance. To the agents, the company can give the following incentives:
a) Profit sharing
b) Stock option (i.e., giving company’s share at a price less than market price)
c) Productivity linked salary (i.e., higher salary for getting more insurance business)
d) Participation in decision – making.
2)By giving recognition, autonomy status, etc. and providing growth and self-fulfillment
opportunities, the company ensures that higher order needs-esteem and self actualization
needs are met.
3)The company can follow formal communication system by ensuring that all communication
flows through official channels designed in the organization chart (i.e., through Scalar chain).
4)Information communication network (i.e., grapevine) can be used by the company to transmit
information to know him reactions of the employees and agents to the company’s decisions and
policies. Grapevine channels can carry insurance market information rapidly.
Q. 27. Prateek is working in a multinational company in Noida. He was running a temperature
for the last many days. When his blood was tested, he was found to be positive for malaria. He
was admitted in a hospital and a blood transfusion was advised by the doctors as his condition
was very serious. One of his colleagues sent a text message to his superior, Mr. B. Chatterjee.
Mr. B. Chatterjee immediately sent a text message to the employees of the organization
requesting them to donate blood for Prateek. When the General Manager came t o know about
it, he ordered for fumigation in the company premises and cleaning the surroundings.
1. From the above paragraph, quote lines that indicate formal and informal communication.
2. State any two features of informal communication.

Ans.
1. (i)Informal communication:“One of his colleagues sent a text message to his superior, Mr. B.
Chatterjee. Mr. B. Chatterjee immediately sent a text message to the employees of the
organization requesting them to donate blood for Prateek.”
(ii) Formal communication: “When the general manager came to know about it, he ordered for
fumigation in the company premises and cleaning surroundings.”
2. The features of informal communication are as follows:
a) The grapevine/informal communication spread very fast and sometimes get distorted.
b) It is very difficult to detect the source of such communication.

Q. 28. Roshan is the chief of ‘Khidmat’ restaurant located in the city of Bangaluru. The place is
known for its exquisite Mughlai cuisine especially mutton briyani and kababs. All the food is
prepared under Roshan’s purview. The various activities in the kitchen are initiated in
accordance to his instructions. He is very clear and specific in issuing instructions to his
subordinates in order to ensure smooth working of the department. He personally oversees the
method followed by the chefs for preparation of each dish. He misses no opportunity to praise
his subordinates for their good work. All his team members feel very happy and satisfied under
his direction. He provides constant guidance to them in order to improve upon its taste and
presentation and also encourages them to innovate and be more creative in their work.
In the above context:
1. Identify the various elements of directing mentioned in the above paragraph by quoting lines
from the paragraph.
2. Describe briefly any two points to highlight the importance of directing as a function of
management.
Ans.
1. The various elements of directing mentioned in the above paragraph are as follows:
a) Communication: ‘He is very clear and specific in issuing instructions to his subordinates in
order to
ensure smooth working of the department.”
b) Supervision: “He personally oversees the method followed by the chefs for preparation of
each dish.”
c) Leadership: “He provides constant guidance to them in order to improve upon its taste and
presentation
and also encourages them to innovate and be more creative in their work.”
d) Motivation: “He misses no opportunity to praise his subordinates for their good work.”
2. The importance of directing as a function of management is described below:
a) Initiates action: Directing helps to initiate action by people in the organization towards
attainment of desired objectives. It is the first execution function of management.
b) Integrates employees’ efforts: Directing seeks to integrate the individual efforts of employees
in the organization towards the realization of the organizational goals.
c) Helps to realize their potential: Directing provides effective guidance, motivation and
leadership to the employees so as to enable them to realize their potential and capabilities. (any
two)
Q. 29. Neeraj has been working as a sewing machine operator in an export house for the past
ten years. His basic work is to seam the parts of a garment together, and attach buttons, hooks,
zippers, and accessories to produce clothing. Considering the fact that Neeraj is an experienced
operator, he is well versed with the fundamentals of industrial production and possesses good
communication skills. The plant superintendent in the factory recommends Neeraj’s name to the
production manager for the post of supervisor which will fall vacant after a month on the
retirement of the present
supervisor. Consequently, Neeraj is assigned the post of supervisor and his salary is
increased accordingly. Moreover, as per the policy of the export house, he is offered free
medical aid and education to his two children.
In the context of the above case:
1. Identify the type of source of recruitment used by the export house to fill up the post of
supervisor. Give any two advantages of using this source.
2. Identify the types of financial incentives offered to Neeraj by quoting lines from the paragraph.
Ans.
1. The internal source of recruitment has been used by the export house to fill up the post of
supervisor through promotion. The two advantages of using internal source of recruitment are
stated below.
a) Employees are motivated to improve their performance: When employees are promoted
internally from within an organization, it has a positive impact on their commitment and loyalty
and they tend remain satisfied with their jobs. Also, it may lead to a chain of promotion at lower
levels in the organization. As a result, it motivates the employees to improve their performance
through learning and practice.
b) Internal recruitment simplifies the process of selection and placement: The candidates can be
appraised more perfectly and economically as that are already working in the organization. As
the candidates are already known to the organization, it is considered to be a more reliable
method of recruitment.
2. The types of financial incentives offered to Neeraj are as follows:
a) Pay and allowances: “his salary is increased accordingly.”
b) Perquisites: “as per the policy of the export house, he is offered free medical aid and
education to
his two children.”
Q. 30. Sunidhi has started a designer studio in the basement of her residence after completing
her masters in fashion designing. She has appointed ten employees to take care of the various
aspects of the work. She interacts regularly with each employee to tell exactly what is expected
of him/.her and what he/she needs to do to be regarded as a good performer. At the same time
she allows a free work environment wherein the employees openly chit chat with each other in
order to fulfill their social and emotional needs. Sometimes, these interactions also lead to
spreading rumors which are not authentic.
In the context of the above case:
1. Name and explain the two types of communication being referred to in the above paragraph.
2. How effective communication does increases managerial efficiency?
Ans.
1. The two types of communication being referred to in the above paragraph are formal
communication and informal communication.
a) Formal communication: The communication that flows through official channels designed in
the organization structure is called formal communication. This communication may take place
between a subordinate and superior or among same team employees or managers. Usually a
written record of such communications is maintained, recorded and filed in the office. Formal
communication may be further classified as – Vertical and Horizontal.
b) Informal communication: Informal communication is the type of communication that takes
place without following the formal lines of communication. It is generally referred to as the
‘grapevine’ because it spreads throughout the organization with its branches going out in all
directions in utter disregard to the levels of authority. The informal communication arises out of
needs of employees to exchange their views, which cannot be done through formal channels.
2. Effective communication increases managerial efficiency by lubricating the working of the
entire organization through quick and effective performance of managerial functions. It enables
the management to express the goals and targets, issue instructions, allocate jobs and
responsibilities and look after the performance of subordinates.

Q. 31. Gagan has joined as a Managing Director of True Help Ltd., a company engaged in the
business of providing road side assistance to the vehicle owners. He was previously working in
an automobile company. As a part of the joining incentive, the company has allotted him 400
shares of the company. In context of the above case:
1. Identify the type of source of recruitment used by True Help Ltd. to fill up the post of
Managing Director.
2. Identify the type of financial incentive offered to Gagan. Also, state any one other method that
can be used to offer financial incentives to the employees.
Ans.
1. External source of recruitment has been used by True Help Ltd. to fill up the post of Managing
Director.
2. Co-partnership/ Stock option is the type of financial incentive offered to Gagan.
The other method that can be used to offer financial incentives to the employees is Bonus.
Bonus is an incentive offered over and above the wages/ salary to the employees.
Q. 32. Mr. Naresh is working as a Production Manager in Vohra Ltd. His subordinates are mostly
engineers and qualified technicians.
As a manager, he is very strict, does not listen to any suggestions or feedbacks given by his
subordinates. He expects them to following his instructions without any questions and does not
allow them to give suggestions.
1. What leadership style does the manager follow?
2. Is such a leadership style beneficial for the company? Explain.

Ans.
1. Autocratic leadership
2. This leadership style is effective in getting productivity in many situations like in a factory
where the
supervisor is responsible for production on time and has to ensure labour productivity. Quick
decision-
making is also facilitated.

Case Studies - (Chapter - 8) Controlling

Q. 1. Babita Ltd. is engaged in manufacturing machine components. The target production is
250 units per day per worker. 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 200-210
units per worker.
1. Name the function of management and identify the step 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 (a) and to ensure the performance as per
set targets, explain what further steps a manager has to take.
Ans.
1. The management function is controlling.
“Comparing actual performance with standards” is the step involved in the process of
controlling which helped in finding out that the actual production of a worker is less than the set
target.
2. A manager has to take the following two further steps to complete the process of controlling:
a) Analyzing deviations
b) Taking corrective action
Q. 2. Rajeev and Sanjeev are managers in the same organization having different units. While
discussing about the function of management, Rajeev says “Planning is looking ahead whereas
controlling is looking back.” But Sanjeev says, “Planning is looking back whereas controlling is
looked ahead.” Both are giving reasons in favour of their statements. Explain the possible
reasons given by both and justify who is correct.
Ans. Rajeev who says, “Planning is looking ahead whereas controlling is looking back” must be
giving the following reason:
Sanjeev who says, “Planning is looking back where as controlling is looking ahead” must be
giving the following reasons.
Conclusion: Planning and controlling are both backward looking and forward looking functions.
Hence, both of them are partially correct.
Q. 3. ‘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 is well defined in advance, along with the appropriate levels of managements 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.

Ans.
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.’

Q. 4. 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 materials used, he assures that the
fabric meets the requirements by conducting a series of tests for the fabrics like shrinkage test,
testing
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, the 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.
Ans.
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 planning
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 of development to an organization are as follows:
a) 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.
b) It increases the employees’ productivity both in terms of quantity and quality, leading to higher
profits.
c) Training increases the morale of the employees and reduces absenteeism and employee
turnover.
Q. 5. Atul and Ajay are good friends. They decide to set up a digital printing press together as
both of them are compute wizards. They plan to offer various types of printed products including
labels, manuals, marketing material, memo pads, business order forms, T-shirts, mugs etc.
They set standards for every aspect of their work in order to create an efficient working
environment. As per the standards, an average person types between 38 and 40 words per
minute. Keeping this in mind, they engage two typists Bitto and Raju and assign them work
accordingly. Within two days, they realize the output in terms of typing work done by Raju is too
less as compared to the desired output. On inspecting, Atul finds out that Raju’s typing speed is
between 18 and 20 words per minute only. But Raju exhibits great skills in designing work and is
a good human being. Hence, Atul and Ajay decide to retain him for doing creative work and
appoint a new typist.
In context of the above case:
1. Identify and explain the function of management being discussed here.
2. List the steps involved in the function of management as identified in part (a).Also, quote the
lines
from the paragraph relating to each step.
Ans.
1. Controlling is the function of management being discussed here.
2. The steps involved in the process of controlling which are discussed in the above paragraph
are:
a) Setting standards of performance:
b) Measurement of actual performance:
c) Comparison of actual performance with the standards:
d) Analyzing deviations:
e) Taking corrective action:
Q. 6. D & D Ltd. is a large manufacturing unit. Recently, the company has conducted the ‘time’
and ‘motion’ studies and concluded that on an average a worker could produce 120 units per
day. However, it has been noticed that average daily production of a worker is in the range of
80-90 units.
Which function of management is needed to ensure that the actual performance is in
accordance with the performance as per ‘time’ and ‘motion ‘studies?
Q. 7. ‘A.S. Ltd.’ is a large company engaged in assembly 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 assembly of
air-conditioners per day is i800 units only. To find out the reason the company compared actual
performance of each worker and observed through C.C.T.V. that some of the workers were busy
is gossiping.
1. Identify the function of management discussed above.
2. State those steps in the process of the function identified which are discussed in the above
paragraph.
Ans.
1. Controlling
2. Steps discussed in the above paragraph are:
a) Setting performance standards
b) Measurement of actual performance
c) Comparing actual performance with the standards
d) Analyzing deviations for their causes.
Q. 8. A company ‘M’ Ltd. is manufacturing mobile phones both for domestic Indian market as
well as for export. It has enjoyed a substantial market share and also had a loyal customer
following. But latterly it has been experiencing problems because its targets have not been met
with regard to sales and customer satisfaction. Also mobile market in India has grown
tremendously and new player have come with better technology and pricing. This is causing
problems for the company. It is planning to revamp its controlling system and take other steps
necessary to rectify the problems it is facing.
1. Identify the benefits the company will derive from a good control system.
2. How can the company relate its planning with control in this line of business to ensure that its
plan is
actually implemented and targets attained?
3. Give the steps in the control process that the company should follow to remove the problems
it is
facing.
Ans.
1. Explain the importance of controlling.
2. Company can relate its planning with control in this line of business by following measure by
implementing an effective controlling system and following a controlling process. 3. Explain
steps in the process of controlling system.
Q. 9. Alpha Ltd. was manufacturing Auto spare parts. To improve the efficiency of employees
the company provided training to their employees by inviting an expert who demonstrated the
whole process of manufacturing. The expert quoted that all deviations cannot be controlled, so
manager must know which deviation in key areas must be attended urgently as compared to
deviation in non- key area. He also suggested that human beings are bound to brake mistakes
as manager should not take strict action on every minute mistake of workers, rather he can fix a
range of deviation and take action if deviation is above the specified large.
1. Identify the functions of management referred above.

2. Name the two ways of analyzing deviation mentioned above.

3. Name the method of training used by the company.
Ans.
1. Staffing and controlling
2. (i) critical Point Control
(ii) Management by exception
1. Apprenticeship method of training
Q. 10. 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 “fewer amounts much time” which can ensure the high quality and high fresh level
of the food. For instance, if your 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 t he supplier
must b e under 40 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 organizational goals
and
ensure efficient use of resources?
Ans.
1. Analyzing 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
organization, there for every organization identifies and states its specific key result area (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:
a) Accomplishing organizational goals:
b) Making efficiently use of resources:

Q. 11)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. Mr. Nath’s behavior is good towards the employees. His attitude is always
positive. So he announced various incentive schemes for the employees like.
- installing award or certificate for best performance.
- Rewarding an employee for giving valuable suggestions.
- Congratulating the employees for good performance.
(a) Identify the functions of management highlighted in the above paragraph.
(b) State the ‘incentive’ under which the employees are motivated.

Ans.
a) Controlling and Directing
b) Employee recognition programme (non-monetary)
Q. 13. Joseph Bros. was a firm manufacturing jute lamp shades. It uses left over jute pieces
from various jute factories to manufacture economical lamp shades which are supplied to
various hotels in nearby towns: it employs men and women from nearby villages as workers for
creating good lamp shade designs.
Joseph Bros. is not able to meet its targets. Namish, the supervisor of the company, was told to
analyze the reasons for the poor performance. Namish found following problems and suggested
certain solution s in the working of the business. M the number of workers employed was less
than what was required for the work. As a result, the existing workers were overburdened. The
firm decided to search for new workers and it asked the present employees to introduce
candidates or recommend their friends and relatives to the firm. This enabled the firm in “putting
people to jobs” and assured attainment of objectives according to plans.
1. Identify the functions of management being performed by the firm in the above situation.
2. Name the concept and its source used by the firm to attract more workers for the firm.

Ans.
1. Staffing and Controlling
2. Recruitment, External Source of Recruitment (Recommendations of employees)

Q. 14. 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
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 relaxation should be given to encourage
women, persons from backward and rural areas and persons with special abilities to assume
responsible positions in the organization. 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 para.

Ans.
1. Staffing and controlling 2. Steps:
Step in Staffing
a) Estimating manpower requirements: b) Recruitment:
Steps in controlling:
a) Comparison of actual performance with the standards:
b) Analyzing deviations:
c) Taking corrective
Q. 15. Airtech Ltd. is manufacturing mobile phones both for domestic Indian market as well as
for export. It has enjoyed a substantial market share and also had a loyal customer following.
But lately it has been experiencing problems because its targets have not been met with regard
to sales and customer satisfaction. Also, mobile market in India has grown tremendously and
new players have come with better technology and pricing. This is causing problems for the
company. It is planning to revamp its controlling system and take other steps necessary to
rectify the problems it is facing. It also decides to offer its basis models of mobile phones at 50%
discount to the poor people.
1. State any two benefits the company with derives from a good control system.
2. How can the company relate its planning with control in this line of business to ensure that its
plan is
actually implemented and targets attained.
3. Give the steps that the company should follow to remove the problems it is facing.
4. Identify any one value which the company wants to communicate to the society.
Ans.
1. Two benefits which the company will derive from a good control system are:
a) Accomplishing organizational goals of increasing market share and customer satisfaction.
b) Making efficient use of resources by controlling wastage and spoilage of resources; and
ensuring
that each activity is performed according to the predetermined standards.
2. Controlling will improve future planning by providing information to the company derived from
past experience that its targets were not met with regard to sales and customer satisfaction.
3. The company should undertake technological up gradation of machinery, and modify the
existing process so that cost is reduced and the company can set lower price for its mobile
phones to bet its competitors.
4. Value:
Concern about poor people
Social responsibility

Q. 16. You are the manager of Bharti Chemicals Ltd. it is reported to you that postal expenses
have increased by 10% over standard rates and cost of raw materials has increased by 2%.
Which of the two deviations will be more critical to you?
Ans. Increase in cost of raw materials by 2% is more critical. (Critical Point Control)
Q. 17. Surbhi Ltd. produces safety pins on a mass scale. The company’s policy is that at most
25 of the daily production could be defective. Over a three months period, it has been observed
that 8% - 10% of the production is defective. The cause of deviation found is defective
machinery. What corrective action should be taken by the management? (1 mark)
Ans. Repair the existing machine or replace the machine if it cannot be repaired.
Q. 18. K & K Co. Ltd. is engaged in manufacturing machine components. The target production
is 200 units daily. The company had been successfully attaining this target until two months ago.
Over the last few 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 desired targets.
Ans. Answer Yourself