Controlling Class 12 Notes

Notes for Class 12

Please refer to the  Controlling Class 12 Notes for Business Studies given below. These revision notes and important question answers have been prepared based on the latest NCERT book for Class 12 Business Studies. Our teachers have developed these short notes and Important Questions Class 12 Business Studies as per the latest syllabus for Grade 12 Business Studies issued by CBSE. Read these notes and important questions to get better marks in examinations

Class 12 Business Studies Controlling


Controlling means ensuring that activities in an organization are performed as per the plans

Importance of Controlling
 It helps in accomplishing organizational goals by constantly monitoring the performance of the employees and bringing to light the deviations, if any, and taking appropriate corrective action.
 It helps the business managers to judge the objectivity and accuracy of the standards.
 It seeks to make efficient use of resources.
 It seeks to motivate the employees and helps them in giving a better performance.
 It creates an atmosphere of order and discipline in the organization.
 It facilitates coordination in action by providing direction to all activities within and among departments.

Features of Controlling
1. It is a goal-oriented function.
2. It is a pervasive function as it is used in the organizations of varying types and sizes.
3. It is considered to be a forward looking function as it helps to improve the planning by providing valuable feedback for reviewing and revising the standards.
4. It is considered to be a backward looking function as it is like the post mortem of the past activities to ascertain the deviations if any.
5. It is not the last function of management as it brings the management cycle back to the planning function.

Steps Involved in the Controlling Process
1. Setting performance standards in clear, specific and measurable terms.
2. Measurement of actual performance as far as possible in the same units in which standards are set.
3. Comparing actual performance with standards to identify deviations if any.
4. Analyzing deviations through critical point control and management by exception approaches to identify the causes for their occurrence.
5. Taking corrective action whenever the deviation occurs beyond the permissible limits so that it does not reoccur in future.

Relationship between Planning and Controlling
1. Planning without controlling is useless and controlling without planning is blind.
2. Planning provides the basis of controlling by setting the standards in advance. In the absence of these standards, managers will not know what all activities have to be controlled.
3. Planning is prescriptive in nature whereas, controlling is evaluative.
4. Thus, planning and controlling are interrelated and interdependent. As planning is based on facts, it makes controlling easier and effective whereas controlling helps to improve future planning by providing valuable information derived from the past experiences

Case Study Controlling Class 12 Business Studies

Question. 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.
Ans. Measurement of actual performance is the step in controlling process being described.

Question. ‘If anything goes wrong with the performance of key activities, the entire organisation suffers. Therefore, the organisation should focus on them.’ Explain the statement with a suitable example.
Answer: The given statement refers to the importance of ‘Critical Point Control’ in order to ensure effective performance of key activities in an organisation.
Critical Point Control: It may not be either economical nor easy to monitor each and every activity in the organisation. Therefore, every organisation identifies and states its specific Key Result Areas (KRAs) or critical points which require tight control and 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. For example, if in an organisation, the expenditure on stationery goes up by 10%, it can be ignored but if the production cost goes up by 5%, it may call for managerial action

Question. 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 behaviour is good towards the employees. His attitude is always positive. So, he announced various incentive schemes for the employees like:
1. Installing awards or certificates for best performance
2. Rewarding an employee for giving valuable suggestions
3. Congratulating the employees for good performance Identify the functions of management highlighted in the above paragraph.
• State the incentive under which the employee are motivated.
• State any two values which the production manager wants to communicate to society by his work and behaviour.

Ans. 1. The functions of management highlighted in the above paragraph are Controlling and Directing.
2. The employees are motivated under Employee recognition programmes which is a non-financial incentive. Employee recognition programmes helps to fulfill the need of due consideration and appreciation of the people working in an organisation. It boosts their self-esteem and motivates them to work with greater zeal and enthusiasm.
3. The two values that the manager wants to communicate to the society through his work and behaviour are:
 Respect for employees
 Concern for environment

Controlling Class 12 Notes