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NIOS Class 12 Business Studies Chapter 14 Co-ordination and Controlling
Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 12 Business Studies Chapter 14 Co-ordination and Controlling, NIOS Senior Secondary Course Data Business Studies for All Chapter, You can practice these here.
Co-ordination and Controlling
Chapter: 14
Module – 5 : FUNCTION OF MANAGEMENT
INTEXT QUESTIONS 14.1
Q. 1. Define the term Co-ordination.
Ans: Co-ordination means orderly arrangement of group efforts to provide unity of action in the pursuit of a common goal.
Q. 2. Correct the following statements, in case found wrong:
(a) Co-ordination leads to diversity in action.
Ans: Coordination leads to unity in action.
(b) The importance of co-ordination is greater in small organisations.
Ans: The importance of co-ordination is lesser in small organisations.
(c) As work is divided and sub-divided, the necessity of co-ordination is increased.
Ans: Correct.
(d) Co-ordination is the function of lower level managers only.
Ans: Coordination is the function of all levels of management.
(e) In the absence of co-ordination, organisational goals may be neglected by managers.
Ans: Correct.
INTEXT QUESTIONS 14.2
Q. 1. State the meaning of the term ‘controlling’ in your own words.
Ans: Controlling as a function of management refers to the evaluation of actual performance of work against planned or standard performance and taking the corrective action, if necessary.
Q. 2. Complete the following incomplete words with appropriate letters by using clues given at the bottom. Each blank represents one letter only.
(a) D________V_________T________ON
Ans: DEVIATION.
(b) P ________ VA _________ V _______
Ans: PERVASIVE.
(c) F ______ T _____ I ______ TI ______
Ans: FUTURISTIC.
(d) ________ N _________ IN _________
Ans: ONGOING.
Clues:
(a) When actual performance is different from planned performance.
(b) Control is needed at all levels, in every functional area.
(c) Control is forward looking.
(d) Control is a continuous process.
INTEXT QUESTIONS 14.3
Q. 1. Match the phrases in column (I) with those in column (II)
| Column (I) | Column (II) |
| (a) Fixation of standards | (i) Actual work done |
| (b) Measurement of performance | (ii) Comparison of actual performance with the standards. |
| (c) Appraisal of performance | (iii) Establishing the desired level of performance. |
| (d) Determination of reasons for deviation | (iv) Efforts to make the actual performance confirm to the standards. |
| (e) Taking corrective action | (v) Why is there a difference between actual performance and standard performance. |
Ans:
| Column (I) | Column (II) |
| (a) Fixation of standards | (iii) Establishing the desired level of performance. |
| (b) Measurement of performance | (i) Actual work done |
| (c) Appraisal of performance | (ii) Comparison of actual performance with the standards. |
| (d) Determination of reasons for deviation | (v) Why is there a difference between actual performance and standard performance. |
| (e) Taking corrective action | (iv) Efforts to make the actual performance confirm to the standards. |
Q. 2. Following is the sequence of events in Gopal’s readymade dress factory during the month of April 2014. Arrange them in proper order keeping in mind the process of control.
(a) Gopal fixed a target of 500 shirts for the month of April 2014.
(b) Gopal changed defective machines and also the incompetent workers.
(c) On 30 April, 2014 Gopal found only 400 shirts could be prepared.
(d) Gopal was upset to see the output as it was 100 shirts less than the target set for the month.
(e) Gopal found some machines were giving trouble and also some incompetent workers wasting their own and other’s time.
Ans:
| 1 | 2 | 3 | 4 | 5 |
| (a) | (c) | (d) | (e) | (b) |
TERMINAL EXERCISE
Very Short Answer Type Questions:
Q. 1. State any two advantages of coordination.
Ans: Following are two advantages of coordination:
(i) It helps in promoting stability.
(ii) It’s result in reconciliation of goods.
Q. 2. State any four characteristics of control.
Ans: The following are the characteristics of control:
(i) closely associated with planning.
(ii) all pervasive.
(iii) action is the essence of control.
(iv) continuous process. and
(v) exercised at all levels of management.
Q. 3. What is ‘deviation’ in the context of control?
Ans: Controlling is important to make planning a success. For this purpose, it is necessary to compare actual performance with the planned performance. The difference between actual and planned performance is called ‘deviation’. Control means determining the deviation, identifying the reasons for deviation and correcting the deviations.
Q. 4. State any two reasons of importance of control.
Ans: Following are the reasons of importance of control:
(a) It helps in better planning.
(b) It helps in achieving better coordination.
Q. 5. What do you mean by controlling?
Ans: Controlling as a function of management refers to the evaluation of actual performance of work against planned or standard performance and taking the corrective action, if necessary.
Short Answer Type Questions:
Q. 6. What is meant by control?
Ans: Managerial planning results in the framing of objectives and laying down of targets. To achieve the objectives, a proper organisational structure is designed; people are assigned the various tasks; and are directed to perform their respective jobs. The actual performance is then assessed from time to time to ensure that what is achieved is in conformity with the plans and targets. This exactly is the controlling function. Thus, controlling as a function of management refers to the evaluation of actual performance of work against planned or standard performance and taking the corrective action, if necessary.
According to Henri Fayol, “Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established.”
According to Brech, “Control is checking current performance against predetermined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance, and also recording the experience gained from the working of the seplans as guide to possible future needs.
Q. 7. List the steps in the process of control.
Ans: Following are te Steps in the process of control:
(i) establishment of standards.
(ii) measurement of performance.
(iii) comparison of actual performance with planned performance.
(iv) determination of reasons for deviation.
(v) taking corrective action.
Q. 8. Explain briefly why coordination is called essence of management?
Ans: The significance of co-ordination as a function of management mainly arises from the fact that work performed by different groups, units or departments form integral part of the total work for which an organisation is established. Without harmonised efforts or unity of action, achievement of goals in some departments may run counter to that of the other departments, or the timing of achievements may not fit in properly. This has to be avoided and the managers have to prevent overlapping and conflict s as to achieve unity of action. With increasing size and scale of operations, the significance of co-ordination becomes more important.
This is because of the following reasons:
(a) When there is growth in size and the volume of work, there will be more people and work groups. So there is greater possibility of people working at cross purposes as the unit and sub-unit goals may be considered more important by them than the organisational goals. Not only that, the large size may also lead problems of supervision and communication. Hence, coordinating the activities in large concern becomes a major task for the managers.
(b) Large organisations generally tend to have activities located at different places, which may not permit frequent and close interaction among people. Hence, the need for co-ordination becomes greater and it becomes a major responsibility for the managers.
(c) Growth in size of an organisation is often combined with diversification of business activities. This may be due to new unrelated products being added to the existing products. As a result, there may be more division and sub-division of activities. At the same time, there is an increase in the number of managerial levels and vertical division of responsibilities. All these make coordination more difficult as well as important.
In view of the importance of coordination in an organisation, it is sometimes called the essence’ of management. It is a function of managers in all departments and branches of an organisation, and applies at all the levels of management. It ultimately helps in reconciliation of goals, total accomplishment of business objectives, maintenance of harmonious relationship between different groups and ensuring economy and efficiency in the organisation.
Q. 9. Planning and control are inseparable. Discuss in brief.
Ans: Planning and controlling are closely related and depend upon each other. Controlling depends upon planning because planning provides the targets or standards against which actual performance can be compared. Controlling, on the other hand, appraises planning. It brings out the short comings of planning and helps to improve upon the plans. So, it is rightly said that planning and controlling are interdependent and interrelated.
Q. 10. What should a manager do when there is difference between actual and standard performance.
Ans: Comparison of actual and standard performance may lead to three possible outcomes: actual performance may be (a) equal to, (b) more than, or (c) less than the standard. If actual performance is equal to the standard, managers need not take any action but where deviations are noticed, corrective action becomes necessary. The managers should ascertain whether these deviations are within the permissible range or outside it. Corrective action becomes necessary only for deviations which fall outside the permissible range.
Once the causes for deviations become known, the next step is to go in for a corrective action which may involve revision of standards, changing the methods of selection and training of workers or providing better motivation. Managers should concentrate only on major deviations.
Q. 11. ‘There is a close and reciprocal relationship between planning and controlling’. Comment.
Ans: Planning fixes the goals/standards to be achieved. Controlling checks the actual performance with the standards fixed. Therefore, planning fixes the criteria for controlling. Thus, without planning control is blind.
Planning sets the course of actions. Control compares the actual course and the planned course. Control identifies deviations from the course and initiates corrective actions. Planning is fruitful when control is exercised.
Planning is forward looking as all plans are prepared for future. But it looks ahead on the basis of past data. So we can say planning is both backward looking and forward looking.
Controlling is forward looking because controlling involves comparing the actual performance with the planned performance. Controlling is backward looking because manager looks back at previous year’s performance to find the deviations from the standard. Like planning, controlling is also both backward looking and forward looking.
Long Answer Type Questions:
Q. 12. Explain various steps of the process of control.
Ans: The process of control consists of various steps:
1. Establishment of Standards: Setting standard is the first requirement of control. Standards arise out of plans and provide the basis of comparison. There can be different types of standards, e.g., number of units to be produced per hour, cost of production per unit, permissible quantity of scrap and wastage per day, quality of the products and so on. As far as possible, the standards should be laid down in quantitative terms. A quantitative standard provides a concrete measure and helps in comparison. It is equally important that the standards fixed are realistic and attainable, neither too high nor very low. If these are too high, employees will be discouraged. On the other hand, if these are too low, the organisation will operate at a lower efficiency level leading to higher cost.
2. Measurement of Performance: When standards are established, the next step is to measure the performance at regular intervals. Measurement is not difficult in case of physical operations, e.g., units produced, cost incurred, time spent, etc., as these can be easily measured. Performance can be measured by observations, inspection and reporting. Generally, at lower levels, a detailed control is exercised at frequent intervals on the basis of observation and inspection. For higher levels of management, reports are prepared at regular intervals. Performance should be measured as early as possible so that if a corrective action is called for it may be taken in time.
3. Comparison of Performance with Standards: The next step in the control process is comparison of actual performance against the standards. In case the standards set are well defined and can be measured objectively, comparison becomes very simple. But, in case of activities where, it is difficult to develop measurable quantitative standards, the measurement and appraisal of performance becomes difficult. Comparison of actual and standard performance may lead to three possible
outcomes: actual performance may be (a) equal to, (b) more than, or (c) less than the standard. If actual performance is equal to the standard, managers need not take any action but where deviations are noticed, corrective action becomes necessary. The managers should ascertain whether these deviations are within the permissible range or outside it. Corrective action becomes necessary only for deviations which fall outside the permissible range.
4. Detecting the Reasons for Deviations: Before taking any corrective action, managers should try to ascertain the reasons for the occurrence of deviations. The fault may be that standards fixed were unattainable rather than the subordinate’s Inefficiency. Again, the deviations might have been caused by the nature of instructions issued by the manager rather than due to the subordinate’s mistake. Hence, it is essential that the reasons, which caused the deviation, be ascertained to determine the appropriate corrective action.
5. Taking Corrective Action: Once the causes for deviations become known, the next step is to go in for a corrective action which may involve revision of standards, changing the methods of selection and training of workers or providing better motivation. As stated earlier, managers should concentrate only on major deviations. The minor deviations, i.e., deviations within permissible range, should not be accuse of anxiety. The rectification of deviations from the standards should be undertaken promptly so that further losses are avoided.
