Chapter 8: Controlling

Business Studies Part 1 • Class 12

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Chapter Analysis

Intermediate14 pages • English

Quick Summary

The chapter 'Controlling' in Class 12 Business Studies Part 1 explains the importance and functions of controlling in management. It distinguishes between planning and controlling, emphasizing that controlling ensures activities align with plans to achieve organisational goals. The chapter elaborates on the controlling process, which involves setting performance standards, measuring actual performance, comparing it with standards, analyzing deviations, and taking corrective actions. It also discusses traditional and modern techniques of control like budgetary control, PERT, and CPM, highlighting the role of controlling in ensuring efficient resource use and motivating employees.

Key Topics

  • Importance of Controlling
  • Process of Controlling
  • Relationship between Planning and Controlling
  • Traditional and Modern Techniques of Control
  • Steps in the Controlling Process
  • Limitations of Controlling
  • Setting Performance Standards

Learning Objectives

  • Explain the meaning of controlling
  • State the importance of controlling
  • Describe the relationship between planning and controlling
  • Explain the steps in the process of controlling
  • Describe the techniques of controlling

Questions in Chapter

State the meaning of controlling.

Answer: Controlling is the process of ensuring that actual activities conform to planned activities.

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Name the principle that a manager should consider while dealing with deviations effectively. State any one situation in which an organisation’s control system loses its effectiveness.

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Which term is used to indicate the difference between standard performance and actual performance?

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‘Planning is looking ahead and controlling is looking back.’ Comment.

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Explain how management audit serves as an effective technique of controlling.

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Explain the various steps involved in the process of control.

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Discuss the relationship between planning and controlling.

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Additional Practice Questions

Describe the main objective of controlling in management?

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Answer: The main objective of controlling in management is to ensure that an organization's activities are reaching the set objectives, by monitoring, comparing actual performance against set standards and taking corrective actions when necessary.

What are some modern techniques of control mentioned in the chapter, and how do they benefit organizations?

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Answer: Some modern techniques mentioned are Return on Investment, Ratio Analysis, and Management Information Systems. These techniques benefit organizations by providing data-driven insights and metrics, thus facilitating informed decision-making and efficient use of resources.

How does controlling interplay with planning in the management cycle?

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Answer: Controlling and planning are interrelated; planning sets the standards for control, and controlling provides feedback for better future planning, ensuring continuous improvement and alignment with goals.

What is the importance of setting performance standards in the controlling process?

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Answer: Setting performance standards is crucial as it provides the benchmarks for measuring actual performance, which helps in identifying deviations, and facilitates correct decision-making in management.

In what ways can deviations be corrected in a business setting?

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Answer: Deviations in a business can be corrected by revising standards, providing employee training, or altering resources. Corrective actions might also include restructuring processes or reallocating responsibilities to address the root cause of deviations.