08.

CONTROLLING
Weightage as per CBSE curriculum 2020-21 Max. Marks 01 03 04 06 Total
No of questions 02 01 05
There is ONE internal choice question for 03 marks, from this chapter only
CONTROLLING
Controlling gans énsuring the activities in an-organizatin, are performed as per plans, Controlling is a
|process of comparison of actual performance with the planned performane. there is any difference or
deviations finding out the reasons fort and(takingcorrective actions to remove those deviations

IMPORTANCE OF CONTROLLING A
01 Accomplishing |The controlling function measures progress towards the organizational goals
organizational goals and brings to light/indicates corrective action.
Judging Accuracy |A good control system enables management to verify whether the standards
02 of The Standards set are accurate or not by careful check on the changes taking
place in the organizational environment.
03 Making Efficient Use By the process of control, amanager seeks to reduce wastage of resources.
of Resources
Improving Employees An effective control system communicates the goals/standards in advance
04 Motivation
to the employees. A good controlling system thus motivates the employees.
Ensure Order and |Controlling creates an atmosphere of order and discipline in the
05 Discipline |organization by keeping aclose check on the activities of its employees.
Facilitate
06 in Action. Co-Ordination good controlling system maintains equilibrium in means and end. It
A
makes sure that proper direction is taken.

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 LIMITATIONS OF CONTROLLING,
Difficulty in Control system Toses its effectiveness when standards óf performance cannot be
setting defined id quantitative terms. ThiS makes Comparison with standards adiffiCult task.
01
lquantitative e.gareas like human behaviour, employee morale, job satisfaction cannot be
standards |measured quantitatively.
02
Little control on An enterprise cannot control external factors like government policies, technological
lexternal factors changes, and competition. etc.
03 Resistance from Control is resisted by the employees asthey feel that their freedom is restricted. e.a
employees lemployees may resist and go against the use of cameras to observe them minutely.
Control involves a lot of expenditure, time and effort. Asmall enterprise cannot afford
04 Costly affair to install an expensive control system. Managers must ensure that the cost of insta
lling and operating a control system should not exceed the benefits derived from it.

RELATION BETWEEN PLANNING AND CONTROLLING

Planning Planning and controlling are inseparable twinspf managemnt. Asystem of control
01
without |presupposes the existence of standards provided by planning. Once a plan becomes
controlling is |operational, controllingis necessary to monitor the progress, measure it, discover
|meaningless |deviations and initiate corrective measures to ensure that events conform to the plans.
Controlling is |LT the standards are not set in advance, managers have nothing to control. When there
02 blind without s no plan, there is no basis of controlling. Planning seeks consistent, integräted while
Iplanning |controlling seeks to compels eventsto conform to plans
Planning is Planning involving thinking, articulation and analysis todiscover and prescribe an
03 |basically an appropriate course of action for achieving objectives. Controlling checks whether
lintellectual decisions have been translated into desired action.
Jprocess
|planning is |However the statement is only partially correct.(Plans are prepared for future and are
|looking ahead based on forecast about future conditions. JTherefore, planning involves looking ahead.
04 \while Controlling is like a postmortem of past áctivities to find out deviations from the
controlling is standards. So, controlling is a backward-looking function. Thus, planning and controlling
looking back lare both Backward-Looking as well as a Forward-Looking Function.
|planning andcontrolling are interrelated and reinforce each other in the sense that
planning and Planning based on facts makes controlling easier and effective.
05 controlling are
interrelated Controllingimproves future planning by providing information derived from the
past experience.

PROCESS OF CONTROLLING
Setting Up of It means parameter against which the actual performance will be measured.
01 Standards/ Standards should be clearly defined and expressed in numeric terms so that all
Targets can understand them.
02 Measuring of Actual
Actual performance is measured by evaluating the work done by employees.
Performance While measuring the performance quantitative &qualitative aspect kept in mind.
Compare The manager compares the actual performance with planned performance. The
03 Performance differences between two is known as deviation. It could be positive when actual
Against Standards performance is more than planned performance and negative vis-à-vis.
All deviations need not to be brought to the notice of the management. A range of
deviations has to be established and cases beyond the range are reported to the
management. To analyze the deviations Critical point control and
Management by Exception are used.
CRITICAL POINT cONTROL (CPC): It means keep focus on some KEY RESULT
|AREA (KRA)- which are critical to success of the organization. if there is deviation
in these areas then it must be attended urgently. For example, if cost of
04 Analyzing production increased by RS. 2 and cost of postage by Rs 10. Cost of production
Deviations |has more impact on organization than cost of postage. Thus, for an organization
KRA will be cost of production.
MANAGEMENT BY EXCEPTION (MBE): If a manager tries to control everything
he will end up controlling nothing. The deviations beyond the specific range in
|KRA should be handled by manger and managers should not waste time in
|controlling everything. For example, if increase in cost of production is
acceptable up to Rs. 5 then management will not take the action in above case.
Otherwise, it will take action to control the cost.
Taking After knowing the reasons for deviations, the management takes all necessary
05 Corrective
steps to resolve the deviations so that planned performance and actual
|Action/Measures performance are matched.
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