Question

Vikas was the Chief Operating Officer of “Yalet Ltd.” as Company providing Advanced Software Solutions to Indian Defence Services. They had been carrying on business successfully for the last twelve years and earning enough profits. But from the last one year, they realized that though the business is getting big orders, which are being fulfilled in times, even then the Revenues kept on Decreasing. Vikas was not able to find out where the problem was . He started keeping a close check on the progress of activities as he could sense that something was wrong . He wanted to take some action before any major damage could be done to the business .Vikas Appointed a Cyber Security Expert who Monitored the Company’s Processes and found out that the Computer Operator was Deleting the Entries from the Computer and Pocketing the Revenues. He was caught and handed over to the Police . This created an atmosphere of Order and Discipline in the Organization and helped in Minimizing Dishonest Behaviour on the part of the Employees . 

(a) Identify the Function of Management highlighted in the above paragraph. 

(b) Explain any FOUR other ways in which this Function of Management may help the Organization . 

Answer 1

(a) Here Controlling is highlighted and identified as the Management Function.

(b) Controlling Process may help the Organization to prevent Deviation. It can Minimize Deviation by taking Actions and Decisions that reduce their recurrence. 

Controlling Process can be defined as: 

Standards Setting Performance: Standards are the criteria, set in both quantitative and qualitative terms against which actual performance can be measured. Standard are the bench marks towards which efforts of entire Organization are directed. In order to determine whether the actual performance is proceeding in the right way standards are required. As far as possible, standards must be set up in numerical or measurable terms.

Measurement of Actual Performance: Once the standards have been determined, the next step is to measure the actual performance. The various techniques for measuring are sample checking, performance reports, personal observation etc. However, in order to facilitate easy comparison, the performance should be measured on same basis that the standards have.

Comparing Actual Performance with Standards: The standards should be in quantitative terms of facilitate such comparison. This steps involves comparing the actual performance with standards laid down in order to find the deviations . Deviation means Difference between Actual Performance and Planned Performance. Deviations are of two types : Positive Deviation and Negative Deviation.

Analyzing Deviations: After identifying the deviations, various causes for same are analysed and the most exact cause or causes are identified in order to take corrective measures. While analyzing the deviations, ‘Critical Point Control’ and ‘Management by Exception’ techniques are used to save time. 

Taking Corrective Actions: The final step in the process of controlling involves taking corrective action. If the deviations are within acceptable limits, no corrective measure is required. However, if the deviations exceed the acceptable limits, they should be immediately brought to the notice of the management for taking corrective measures, especially in the important and critical areas.