Question

A company 'M' Ltd. is manufacturing mobile phones both for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction. Also mobile market in India has grown tremendously and new player have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing. [NCERT]
(a) Identify the benefits the company will derive from a good control system.
(b) How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?
(c) Give the steps in the control process that the company should follow to remove the problems it is facing.

Answer 1

(a) Benefits of a good control system-

1. Helps in achieving organizational goals:

When the plans are made in the organization these are directed towards the achievement of the organizational goal and the controlling function ensures that all the activities in the organization take place according to plan and if there is any deviation, timely action is taken to bring back the activities on the path of planning.

2. Judging accuracy of standards:

Through strategic controlling we can easily judge whether the standard or target set is accurate or not. An accurate control system revises standards from time to time to match them with environmental changes.

3. Making efficient use of Resources:

Like traffic signal control guides the organization and keeps it on the right track. Each activity is performed according to predetermined standards. As a result, there is the most and effective use of resources.

4. Improving employee motivation:

An effective control system communicates the goals and standards of appraisal for employees to subordinates well in advance.

A good control system also guides employees to come out from their problems. This free communication and care motivate the employees to give better performance.

5. Ensures order and discipline:

Control creates an atmosphere of order and discipline in the organization. The effective controlling system keeps the subordinates under check and makes sure they perform their functions efficiently.

Sharp control can have a check over dishonesty and fraud of employees. Strict control monitor, employees work on a computer monitor which brings more order and discipline in the work environment.

6. Facilitate coordination in action:

Control helps to maintain equilibrium between means and ends. Controlling makes sure that proper direction is taken and that various factors are maintained properly. All the departments are controlled according to predetermined standards which are well coordinated with one another. Control provides unity of direction.

7. Controlling helps in improving the performance of the employees:

Controlling insists on a continuous check on the employees and control helps in creating an atmosphere other order and discipline. Under controlling function it is made sure that employees are aware of their duties and responsibilities very clearly.

(b) A company can relate its planning with control in this line the of business by the following measure by implementing an effective controlling system and following a controlling process.

(c) steps in the control process that the company should follow to remove the problems-

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 the same basis that the standards have.

Comparing Actual Performance with Standards:

This step involves comparing the actual performance with standards laid down in order to find the deviations. For example, the performance of a salesman in terms of unit sold in a week can be easily measured against the standard output for the week.

.Analyzing Deviations:

Some deviations are possible in all the activities. However, the deviation in the important areas of business needs to be corrected more urgently as compared to deviation in insignificant areas. Management should use critical point control and management by exception in such areas.