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 1

The given statement highlights the principle of ‘critical point control’ while analysing the deviations. 

The principle of ‘critical point control’ emphasises that the management of an organisation K should have its focus on deviations in the key areas i.e., deviations critical to performance of key activities. For example, if postal expenses increase by 10 per cent, the deviation is not important to require managerial attention. But, if cost of direct materials rise by even 1 per cent, it should receive immediate attention. Therefore, it is rightly said, “if you try to control everything you may end up by controlling nothing”. More a manager concentrates his energies on important deviations, the more effective will be the process of controlling