We have given these Business Studies Class 12 Important Questions Chapter 8 Controlling to solve different types of questions in the exam. Go through these Planning Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.

Important Questions of Controlling Class 12 Business Studies Chapter 8

Question 1.
Give the meaning of ‘management by exception’. (All India 2019)
Or
What is meant by ‘management by exception’ in the process of controlling? (Compartment 2014)
Answer:
‘Management by exception’ is an important principle of control, which propagates that only significant deviations which goes beyond the permissible limit should be brought to the notice of management, as an attempt to control everything, results in controlling nothing.

Question 2.
Isha Machines was a renowned name for quality sewing machines since 1960. Mr Suresh, the owner of Isha Machines, was worried as the production had declined during the last three months. He directed the Production Manager to find out the reason. The Production Manager ordered the different supervisors to prepare a performance report of the workers working under them.
Identify the step taken by the production manager in the controlling function of management. (All India 2017)
Answer:
The step taken by the production manager is ‘measurement of actual performance’ in the controlling function of management.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 3.
Hina Sweets is a renowned name for quality sweets since 1935. Harsh the owner of Hina Sweets was worried as the sales had declined during the last three months. When he enquired from the Sales Manager, the Sales Manager reported that there were some complaints about the quality of sweets. Therefore, Harsh ordered for sample checking of sweets.
Identify the step taken by Harsh that is related to one of the functions of management. (Delhi 2017)
Answer:
The step indicated here is ‘Measurement of actual performance’ under controlling.

Question 4.
Give the meaning of ‘critical point control’. (Comportment 2014; Foreign 2014)
Answer:
Control should focus on Key Result Areas (KRAs), which are critical to the success of an organisation. Therefore, each and every activity should not be controlled and focus should be on critical points only.

Question 5.
How is controlling a forward-looking function? State. (Compartment 2013)
Answer:
Controlling is forward looking as it must focus attention on two things checking current performance and providing early information to achieve results in confirmity with set standards.

Question 6.
Why is it said that controlling is looking back? (Comportment 2013; All India 2011)
Answer:
Controlling is called a process of looking back as under it, actual results are compared with the set standards, decided in the past. After that, a corrective action is initiated.

Question 7.
What should be done while ‘taking corrective actions’ in the process of controlling when especially in the important areas, deviations go beyond the acceptable range? (Delhi 2013)
Answer:
Immediate managerial attention is required if the deviations go beyond the acceptable range in important areas. After the analysis of deviations and their causes, the task is to remove the hurdles from the actual work plan. The purpose of this step is to bring the actual performance upto the level of expectations by opting corrective measures.

Question 8.
Standards are set in quantitative as well as in qualitative terms. Identify the type of standards when it is set in terms of ‘cost to be incurred’. (Comportment 2012)
Answer:
Quantitative standards

Question 9.
Standards are set in quantitative as well as in qualitative terms. Identify the type of standards when it is set in terms of ‘time to he spent’. (Comportment 2012)
Answer:
Quantitative standards

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 10.
Why it is said that controlling is a continuous activity? (Delhi 2011)
Answer:
Controlling is a continuous activity as the progress has to be assessed continuously as per the pre-determined standards.

Question 11.
What is important while analysing deviations in controlling? (Delhi 2011)
Answer:
While analysing deviations, it is important to determine the acceptable range of deviations/ KRA (Key Result Areas).

Question 12.
What should be the focus point for a manager while controlling, as controlling at each and every step is not possible? (All India 2011)
Answer:
Focus on Key Result Areas (KRAs), which are critical to the success of an organisation.

Question 13.
Why is actual performance compared with standards in the process of controlling? (Delhi 2010; All India 2010)
Answer:
While performing the function of controlling, a manager compares the actual work performance with the standards. He tries to find out whether the actual performance is more or less than the standards and find out the deviations, if any.

Question 14.
‘AS Ltd.’ 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 800 units only. To find out the reason the company compared actual performance of each worker and observed through CCTV that some of the workers were busy in gossiping. (All India 2015)
(i) Identify the function of management discussed above.
(ii) State those steps in the process of the function identified which are discussed in the above paragraph.
Ans.
(i) Controlling function

(ii) Steps in the process of control are:
Step 1: Setting performance standards Through ‘time’ and ‘motion’ study, an average worker can assemble 10 air-conditioners in a day. On this basis, target volume of 1000 units per day is set.

Step II: Measurement of actual performance Assembly per day is 800 units.

Step III: Comparison of actual performance with standards The company compared actual performance of each worker.

Step IV: Analysing deviations Observed through CCTV that some of the workers were busy in gossiping.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 15.
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. (All India 2013)
Answer:
After the establishment of standards, the next step is measuring the actual performance with the set standards. This can be done by opting several methods like personal observation, sample checking, performance reports, etc.

Question 16.
Explain how ‘management by exception’ helps in the controlling process. (All India 2013)
Answer:
It is an important principle of management control, based on the belief that an attempt to control everything results in controlling nothing. This is known as ‘control by exception’. Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management. An attempt to go through all deviations tend to increase unnecessary efforts and to decrease attention on important problems.

Question 17.
Explain how ‘critical point control’ helps in controlling process. (All India 2013)
Answer:
Small deviations in certain areas may have greater significance than larger in other areas. According to this principle, control should focus on Key Result Areas (KRAs), which are critical to the success of the organisation. When anything goes wrong in these areas, the entire organisation suffers, e.g. A 2% increase in labour cost is much more harmful than a 5% increase in postal charges.

Question 18.
Explain how controlling helps in
(i) Accomplishing organisational goals; and
(ii) Judging accuracy of standards (All India 2013)
Answer:
(i) Accomplishing organisational goals The controlling function measures the performance against the pre-determined standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals. In other words, by controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives.

(ii) Judging accuracy of standards A sound controlling system helps the management to verify whether the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and helps in revising standards as and when required.

Question 19.
Explain how controlling helps in
(i) Making efficient use of resources; and
(ii) Improving employee’s motivation (All India 2013)
Answer:
(i) Making efficient use of resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Bach activity is performed in accordance with pre-determined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(ii) Improving employees motivation A good control system ensures that employees knows 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. Thus, it motivates them and helps them to give better performance.

Question 20.
Vikas was the Chief Operation Officer of Valet Ltd.’, a company providing advanced software solutions of Indian Defence Services. They had been carrying on business successfully for the last twelve years and earning enough profits. But from the last one year, they realised that though the business is getting big orders which are being fulfilled in time, even then the revenues kept on decreasing. Vikas was not able to find out where the problem was. He started keeping a close check on the progress of activities as he could sense that something was wrong. He wanted to take some action before any major damage could be done to the business. Vikas appointed a cyber security expert who monitored the company’s processes and found out that the computer operator was deleting the entries from the computers and pocketing the revenues. He was caught and handed over to the police.
This created an atmosphere of order and discipline in the organisation and helped in minimising dishonest behaviour on the part of the employees.
(a) Identify the function of management highlighted in the above paragraph.
(b) Explain any four other ways in which
this function of management may help the organisation. (All India 2019)
Or
State any five points that highlight the importance of controlling. (CBSE 2018; All Indio 2017; Delhi 2017)
Or
State any five points that highlight the importance of controlling. (All India 2016; Delhi 2014, 2013; Foreign 2016)
Or
Explain any five points which highlight the importance of controlling function of management. (Delhi 2016; Compartment 2012)
Or
‘Controlling is an indispensable function of management.’ Explain the statement with the help of any five points. (Compartment 2014,2013)
Or
Explain the concept of controlling and any four points of its importance. (Comportment 2012)
Answer:
(a) The function highlighted is ‘controlling’.

(b) The five points that highlight the importance of controlling are as follows:
(i) Accomplishing organisational goals The controlling function measures the performance against the predetermined standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals. In other words, by controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives.

(ii) Judging accuracy of standards A sound controlling system helps the management to verily whether the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and helps in revising standards as and when required.

(iii) Making efficient use of resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with pre-determined standards and nqrms. This ensures that resources are used in the most effective and efficient manner.

(iv) It improves employees’ morale The implementation of controlling makes all the employees to work with complete dedication because they are aware that their performance will be evaluated and they will have a chance to build their reputation in the organisation. The employees who show good performance are rewarded by giving them promotions, cash prizes, etc.

(v) It helps in better performance Planning and controlling are closely inter-related as the real test of planning is controlling. Control reveals deficiencies and deviations, suggests corrective actions
for prevention of deviations and deficiencies through modified planning.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 21.
Vinber Ltd. set up a manufacturing unit at Bhiwadi in Himachal Pradesh to manufacture electric geysers and supply them to dealers all over the country.
Their production target was 500 geysers per week. It was decided by the management that variation in production upto 10 units would be acceptable.
At the end of the first week, the production was 450 geysers. The next week, production increased of 470 geysers. A week later, production was 460 geysers. On investigation, it was found that fluctuation in production was due to irregular supply of electricity.
(a) The above para discusses some of the steps in the process of one of the functions of management. Explain these steps.
(b) Also, state the step(s) that have not been discussed in the above para. (Delhi 2019)
Answer:
(a) The function performed is controlling and the steps discussed are:

  • Setting performance standards
  • Measurement of actual performance
  • Comparing actual performance with standards

(b) The step not discussed is ‘Taking corrective action’.

Question 22.
Explain steps to be followed in process of controlling after ‘setting standards’. (Comportment 2018)
Or
Describe briefly the steps in the process of controlling. (All India 2017; Delhi 2017)
Or
Controlling is a systematic process involving a series of steps. State the steps involved in the process. (Foreign 2016: All India 2016, 2014, 2011; Compartment 2014, 2013, 2012)
Or
Explain the various steps involved in the process of controlling. Delhi 2014,2013,201HC)
Or
Explain the process of controlling. (Delhi 2010)
Answer:
Controlling is measuring and correcting the activities of subordinates to ensure that events confirm to plans. It is a systematic process involving a series of steps, which are as follows:
Controlling Class 12 Important Questions and Answers Business Studies Chapter 8 -1
(i) Setting performance standards The first step in the controlling process is to set the performance standards. Standards are those criteria, on which the actual performances are measured. These standards serve as a benchmark towards which an organisation strives to work.

(ii) Measurement of actual performance After the establishment of standards, the next step is measuring the actual performance with the set standards. This can be done by opting several methods like personal observation, sample checking, performance reports, etc.

(iii) Comparison of actual performance with standards In this step, the actual performances are compared with the established standards. Such comparisons reveal the deviation between planned and actual results.

(iv) Analysing deviations At this stage, acceptable and non-acceptable deviations are analysed. Two methods are generally used:

  1. Critical point control It means keeping focus on key result areas where deviations are not acceptable and they should be attended on priority basis.
  2. Management by exception It means that if a manager tries to control everything, he may end up in controlling nothing. Thus, he should first handle the significant deviations, which require his priority.

(v) Taking corrective action The most important step in the controlling process is taking corrective actions. After the deviations and their causes are analysed, the task is to remove the hurdles from the actual work plan. The purpose of this step is to bring the actual performance up to the level of expectations by taking corrective measures.

Question 23.
Explain briefly the relationship between controlling and planning. (All India 2017; Delhi 2017)
Or
Explain the relationship between planning and controlling. (Foreign 2016; All India 2014; Comportment 2014; Delhi 2016, 2012)
Or
‘Planning and controlling are inseparable twins of management’, how? (Delhi 2013; Comportment 2013, 2012)
Answer:
The relationship between planning and controlling is stated in the points below:

  • Planning provides the basis for controlling activities.
  • Controlling ensures that planned goals are achieved efficiently and effectively. It measures the performance with the pre-determined standards and finds out the deviations, if any.
  • The causes of deviations as identified by controlling are the basis of effective future planning.
  • Planning and controlling both are forward looking as well as backward looking.
  • Both are integral parts of an organisation and are necessary for the smooth functioning of an enterprise.

Question 24.
‘There is a close and reciprocal relationship between planning and controlling’. Explain this statement. (All India 2011; Delhi 2011)
Answer:
Planning is the basis for control in the sense that it provides the entire spectrum on which control function is based. In fact, these two terms are often used together in the designation of the department which carries production, planning and scheduling. Control measures the behaviour and activities in the organisation and suggests measures to remove deviations, if any.

Control is the result of particular plans, goals or policies. Thus, planning offers and affects control. Also, planning is affected by control in the sense that much of the information provided by control is used for planning. Thus, there is a reciprocal relationship between planning and controlling.

Question 25.
Seeta, Geeta and Babita Ltd is engaged in manufacturing machine components. The target of 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.
(i) 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.
(ii) To complete the process of the function identified in and to ensure the performance as per set targets, explain what further steps a manager has to take. (All India 2010)
Or
Kapil and Kamal Company is a large manufacturing unit. Recently, the company had conducted time and motion studies and concluded that on an average, a worker could produce 300 units per day. However, it has been noticed that the average daily production of a worker is in the range of 200-225 units.
(i) 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.
(ii) To complete the process of the function identified in and to ensure the performance as per time and motion studies, explain what further steps a manager has to take. (Delhi (C) 2010)
Answer:
(i) The management function which helps in finding out that the actual production of a worker is less than the set target is known as controlling. Here, comparing actual performance with standards or appraisal of performance is the step involved in the process of controlling.

(ii) A manager has to take following steps to complete the process of controlling:
(a) Analysing deviations: Deviations can be due to multiple reasons like unrealistic standards, defective process, inadequacy of resources, environmental factors, etc.

(b) Taking corrective actions:
The final step in the control process is taking appropriate actions so that deviations may not occur again and the objectives of the organisation are achieved. It may also necessitate reforming the process of selection and training of workers. Thus, controlling may require changes in all other managerial functions.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 26.
Explain any four points that highlight the importance of controlling. (Delhi 2014; Foreign 2014)
Or
Briefly explain the importance of controlling. (All India 2012; Delhi (C) 2011)
Or
What is meant by controlling? State any five points of the importance of controlling. (All India 2012)
Or
‘Controlling is an indispensable function of management’. Do you agree? Give four reasons in support of your answer. (Comportment 2014)
Answer:
Importance of controlling are as follows:
(i) Accomplishing organisational goals The controlling function measures the performance against the pre-determined standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals.
In other words, by controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives.

(ii) Judging accuracy of standards A sound controlling system helps the management to verify whether the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and helps in revising standards as and when required.

(iii) Making efficient use of resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with pre-determined standards and norms. This ensures that resources are used in the most effective and efficient manner.

(iv) It Improves employees”morale The implementation of controlling makes all the employees to work with complete dedication because they are aware that their performance will be evaluated and they will have a chance to build their reputation in the organisation. The employees who show good performance are rewarded by giving them promotions, cash prizes, etc.

(v) It helps in better performance Planning and controlling are closely inter-related as the real test of planning is controlling. Control reveals deficiencies and deviations, suggests corrective actions for prevention of deviations and deficiencies through modified planning.

(vi) Facilitates coordination Control keeps all activities and efforts within their fixed boundaries and makes them move towards the set goals. Thus, control facilities coordination. It provides unity of direction.

Question 27.
Describe the relationship between planning and controlling. (All Indin 2014; Delhi 2014; Foreign 2014)
Or
Explain controlling as a function of management. How are controlling and planning related? (All India 2011)
Answer:
Controlling as a function of management can be defined as the process through which managers assure that the activities and results are in conformity with the planned activities and results. It involves verifying whether activities are performed according to the adopted plans. Relationship between planning and controlling Planning involves selecting enterprise objectives and deciding ways to achieve them.

Controlling is the process of assuring that actions are in line with the plans. Planning sets the course and control makes event to conform the chosen course or initiates action to appropriately change the plan. All controls imply existence of goals and plans. No manager can ascertain whether his subordinates are operating in the desired way unless he has a plan. Control will be much better, if the plans are clear and well coordinated.

Without planning, there is no basis for controlling activities. In the absence of plans, it is not possible to evaluate. In the absence of plans, it is not possible to evaluate performance. Similarly, without controlling, planned activities cannot be properly implemented and there cannot be improvement in future plans. Pre-determined goals can be achieved only through controlling. Planning without control is useless and control without planning is meaningless. Planning, based on facts, makes controlling easier. Thus, planning and controlling are mutually inter-related and interdependent.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Multiple Choice Questions

Question 1.
What is/are the characteristic(s) of controlling?
(a) Objectivity
(b) Timeliness
(c) Accuracy
(d) All of these
Answer:
(d) All of these

Hint:
Effective control generate accurate data and information for managerial decision-making. For this, information must be provided on a timely basis. The objective of controlling is to improve efficiency of an organisation.

Question 2.
Controlling function of an organisation is
(a) forward looking
(b) backward looking
(c) forward as well as backward looking
(d) vertical looking
Answer:
(c) forward as well as backward looking

Hint:
Controlling is backward looking process because it is like a postmortem of past activities to find out deviations from standard plans and it is also a forward looking process, as it seeks to improve future results by taking corrective action.

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 3 .
………….. is clearly a pre-requisite for controlling.
(a) Planning
(b) Organising
(c) Leadership
(d) Motivation
Answer:
(a) Planning

Hint:
A system of control presupposes the existence of certain standards. These standards of perfor¬mance, which serve as the basis of controlling, are provided by planning. When there is no plan, there is no basis of controlling. Hence, planning is clearly a pre-requisite for controlling.

Question 4.
…………….. and ………… are inseparable twins of management.
(a) Planning, controlling
(b) Directing, controlling
(c) Organising, staffing
(d) Organising, directing
Answer:
(a) Planning, controlling

Hint:
Planning and controlling are interrelated and interdependent functions of management. Without planning, there lies no basis for controlling and vice-versa.

Question 5.
The first stage in the process of controlling is …………
(a) setting performance standards
(b) measurement of actual performance
(c) comparing actual performance with standards
(d) None of the above
Answer:
(a) setting performance standards

Question 6.
Liquidity ratios are calculated to measure the performance of …………….
(a) production department
(b) finance department
(c) HR department
(d) marketing department
Answer:
(b) finance department

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 7.
Which of the following statement(s) is/are not correct?
(a) Planning originates controlling
(b) Planning and controlling are inter-dependent
(c) Planning is practical whereas controlling is theoretical
(d) Planning and controlling both are forward looking
Answer:
(c) Planning is practical whereas controlling is theoretical

Hint:
Planning is theoretical because it involves thinking, articulation and analysis to discover and prescribe an appropriate course of action for achieving objectives whereas controlling is practical because whatever the decisions have been taken in planning, controlling ensures whether these decisions have been translated into desired action or not.

Question 8.
“The process of control necessarily involves analysing deviations and taking corrective actions, which aims at improving future performance and achievement of pre-determined goals.” This statement describes controlling as
(a) backward looking function
(b) forward looking function
(c) pervasive function
(d) None of the above
Answer:
(b) forward looking function

Question 9.
Controlling is done by ………….
(a) lower level managers
(b) middle level managers
(c) top level managers
(d) all level managers
Answer:
(d) all level managers

Question 10.
An efficient control system helps to ………………
(a) boost employee morale
(b) judge accuracy of standards
(c) accomplish organisational objectives
(d) All of the above
Answer:
(d) All of the above

Controlling Class 12 Important Questions and Answers Business Studies Chapter 8

Question 11.
KRA stands for ………………
(a) Key Review Areas
(b) Key Results Area
(c) Key Review Aspects
(d) None of these
Answer:
(b) Key Results Area

Question 12.
Managers should try to set standards in …………. terms, which can be measured and compared later on.
(a) qualitative
(b) quantitative
(c) absolute
(d) None of these
Answer:
(b) quantitative

Hint:
Standards can be set in both qualitative and quantitative terms. But qualitative standards may or may not be used for future comparison, due to changes in internal and external environment. Therefore, managers should try to set standards in quantitative terms.