Questions
4–6 questions in CBSE Class 12 Business Studies
Difficulty
Medium
Importance
Key for Class 12 boards
Overview
Controlling is the management function that ensures actual performance aligns with planned objectives by monitoring activities and correcting deviations. It is a vital chapter for Class 12 boards as it links the start and end of the management cycle, requiring aspirants to understand the logical flow of corrective action.
The Control Process
The process is a systematic sequence of steps that starts with setting standards and ends with taking corrective action. It is essential to memorize this order as examiners often ask for the chronological sequence in objective questions.
- Setting performance standards
- Measurement of actual performance
- Comparison of actual performance with standards
- Analysis of deviations
- Taking corrective action
Relationship Between Planning and Controlling
Planning and controlling are interdependent functions often called the 'Siamese twins of management'. Without planning, controlling lacks a foundation, and without controlling, planning is merely an academic exercise.
- Planning is prescriptive; Controlling is evaluative
- Planning is looking ahead; Controlling is looking back
- Planning provides the basis for controlling
- Controlling ensures planning is implemented
- Both are forward-looking and backward-looking
Techniques of Controlling
Techniques such as ROI, Budgetary Control, and Management Audit provide the quantitative and qualitative tools for monitoring performance. These are high-yield areas for case-based questions.
- ROI formula: (Net Profit / Total Investment) * 100
- Budgetary control involves pre-defined numerical targets
- Management audit is a systematic appraisal of overall performance
- Critical Point Control: Focus on key result areas
- Management by Exception: Focus only on significant deviations
Formula Sheet
ROI = (Net Income / Total Investment) * 100
Deviation = Actual Performance - Standard Performance
Exam Tip
Always link your answer for 'corrective action' back to the initial standard set during the planning phase to score full marks in case studies.
Common Mistakes
- Confusing 'Management by Exception' with 'Critical Point Control'
- Failing to mention the sequence of the control process in the correct order
- Writing vague definitions for 'Corrective Action' without identifying the root cause
More Revision Notes
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