Controlling

Topics in this chapter

• Meaning and Role of Controlling
• Controlling Process and Corrective Action
• Standards, Deviations, and Variance Analysis
• Traditional Controlling Techniques
• Modern Controlling Techniques
• Effective Control Systems and Limitations

Cheat sheet

Practice questions

1. Question 1Q-CE188C

   Which of the following best describes the controlling function of management?

   1. A.Ensuring that actual performance conforms to planned performance
   2. B.Recruiting and selecting employees for the organisation
   3. C.Determining the objectives of the organisation
   4. D.Grouping activities into departments
   See the answer and solution
2. Question 2Q-D65CE1

   A manager fixes a target of producing 10,000 units in a month. At the end of the month, actual production is found to be 9,200 units. What should the manager do next in the controlling process?

   1. A.Establish the standard of performance
   2. B.Measure actual performance
   3. C.Compare actual performance with the standard and analyse the deviation
   4. D.Communicate the organisational objectives
   See the answer and solution
3. Question 3Q-4E35DD

   A company permits a maximum wastage of 2% in its production process. During one month, wastage rises to 7%. The production manager investigates the causes and changes the machine-maintenance schedule. Which concept of controlling is illustrated most clearly?

   1. A.Management by exception, followed by corrective action
   2. B.Delegation without accountability
   3. C.Planning without standards
   4. D.Coordination through informal communication only
   See the answer and solution
4. Question 4Q-5DEF17

   Explain the relationship between planning and controlling in an organisation.

   See the answer and solution
5. Question 5Q-2F07D7

   A sales manager reviews every sales report but takes corrective action only when the deviation from the sales target exceeds 10%. Which principle of controlling is being applied?

   1. A.Unity of direction
   2. B.Management by exception
   3. C.Scalar chain
   4. D.Division of work
   See the answer and solution