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Class 12 Controlling: cheat sheet
CBSE Business Studies. Making sure work goes to plan: the importance and limits of controlling, its five steps, deviations, critical point control, management by exception and corrective action.
Key ideas
- Controlling ensures that activities are performed as planned; it is needed at every level and looks both backward and forward.
- It helps achieve goals, judge whether standards are right, use resources well, motivate employees, keep order and discipline, and coordinate action.
- Its limits: some standards are hard to measure, outside factors cannot be controlled, employees may resist, and it can be costly.
- Its steps: set performance standards, measure actual performance, compare it with the standards, analyse deviations, take corrective action.
- Critical point control watches the key result areas; management by exception reports only deviations beyond a set limit.
- Planning and controlling are inseparable twins: planning without control is meaningless, and control without planning is blind.
Remember
| Deviation | actual − standard |
| Percentage deviation | deviation ÷ standard × 100 (always divide by the standard) |
| Favourable? | sales or output above the standard: favourable; below it: unfavourable |
| Report it? (management by exception) | only if the percentage deviation is above the permitted limit |
| Corrective action | defective material: change supplier; old machines: repair or replace; untrained workers: train them; unrealistic standards: revise them |
Watch out
- Dividing the deviation by the actual figure instead of by the standard.
- Reporting every small deviation: management by exception reports only the significant ones.
- Taking corrective action before measuring and comparing performance.
Worked example
Put these steps of the controlling process in order: (a) measuring actual performance (b) taking corrective action (c) setting performance standards
Working: setting performance standards → measuring actual performance → taking corrective action
Answer: c, a, b
Practise Controlling
Revise with this page, then practise: every Controlling sheet in the app is new, with an answer key and working.
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