Please refer to Controlling Class 12 Business Studies Important Questions with answers below. These solved questions for Chapter 12 Controlling in NCERT Book for Class 12 Business Studies have been prepared based on the latest syllabus and examination guidelines issued by CBSE, NCERT, and KVS. Students should learn these solved problems properly as these will help them to get better marks in your class tests and examinations. You will also be able to understand how to write answers properly. Revise these questions and answers regularly. We have provided Notes for Class 12 Business Studies for all chapters in your textbooks.

Important Questions Class 12 Business Studies Chapter 12 Controlling

All Controlling Class 12 Business Studies Important Questions provided below have been prepared by expert teachers of Standard 12 Business Studies. Please learn them and let us know if you have any questions.

Short answer type Questions

Question. State the meaning of controlling
Answer. The term ‘deviations’ refers to the difference between the actual performance and planned performance. If the actual performance is more than the planned performance, it may be said to be positive in nature or vice-versa.

Question. ’Controlling is forward looking’. Explain.
Answer. Controlling is forward looking as it must focus attention on two things checking current performance and providing early information to achieve results in conformity with set standards. Checking on operations should enable prompt detection of faults before it is too late for remedy. Deviations, if any, should lead to investigation of the factors responsible which may affect future operations. Remedia actions should be followed so as to prevent the occurrence of defects thereafter. In other words, control must ensure timely detection of deviations and prevention of their repetition in future.

Question. Hina Sweets is a renowned name for quality sweets since 1935. Harsh the owner of Hina Sweets was worried as the sales had declined during the last three months. When he enquired from the Sales Manager, the Sales Manager reported that there were some complaints about the quality of sweets. Therefore, Harsh ordered for sample checking of sweets. Identify and state the step taken by Harsh that is related to one of the functions of management
Answer. Sample checking is a technique of Measurement of actual performance (Controlling). Measurement should be done after the task is completed. However, sometimes performance can be measured during the performance to ensure regular control over the activities. Usually, in large organisations, certain pieces are checked at random, instead of checking the whole lot. This is called sample checking.

Question. Yodesh is trying to reduce wastage of resources in his company. He is trying to do it in the best possible manner. He has set standards for performance of different types of activities and is doing his level best to perform according to these set standards to minimise wastage of resources. Things are not going to be over for him as he will have to look into other aspects too. He has set up a good monitoring system which helps him know how to employees ate performing according to set standards as when the employees meet these standards, they will be given incentives. He is hoping to pull out a good performance from his team this year.
1. Which function of management has been referred to in the above case?
2. Which benefits of this function of management have been highlighted in the above case
Answer. 1. The function of management which has been referred to in the above case is controlling.
2. The benefits of controlling highlighted in the above case are:
Controlling helps in efficient utilisation of resources. He has set standards for performance of different types of activities and is doing his level best to perform according to these set standards to minimise wastage of resources. Controlling helps in improving employee motivation. He has set up a good monitoring system which helps him know how employees are performing according to set standards as when the employees meet these standards, they will be given incentives.

Question. Rajni Ltd. is engaged in manufacturing machine components. The target production is 250 units per day per worker. The company had been successfully attaining this target until two months ago. Over the last two months it has been observed that daily production varies between 200-210 units per worker.
1. Name the function of management and identify the step in the process of this function which helped in finding out that the actual production of a worker is less than the set target.
2. To complete the process of the function identified in (a) and to ensure the performance as per set targets, explain what further steps a manager has to take.
Answer. Management by exception is the principle of management control adopted by the company. It is based on the belief that ‘if you try to control everything, you may end up controlling nothing.’

Question. Briefly explain the term ‘deviations. 
Answer. Budgeting Control is an operation of management responsible for monitoring budget, service in a given accounting year and control cost. It helps the management in setting a regulated performance and financial goal and helps the organisation in getting the desired results.

Question. Raghav started a take away eating joint in a nearby market. His business was doing well. He ensured that the food was properly cooked, a standard taste was maintained, packing of food was done effectively and the orders were executed on time. But unfortunately, he met with an accident and was advised three months bed rest. In his absence, his cousin Rohit took charge of his business. When he resumed his work after three months, he realised that his clientele had dropped. The people were not happy with the services as the quality of food had deteriorated and the delivery time for orders had increased considerably. All this was happening because most of his previous staff had left as Rohit used to adopt a very strict and authoritative approach towards them.
In context of the above case:
1. List any two aspects about his business that Raghav was controlling in order to make it successful.
2. Explain briefly any two points to highlight the importance of the controlling function. 
Answer. 1. The two aspects about his business that Raghav was controlling in order to make it successful are listed below:
A standard taste was maintained.
The orders were executed on time.
2. The two points that highlight the importance of the controlling function are listed below:
Judging accuracy of standards: The controlling function helps the business managers to judge the objectivity and accuracy of the current standards. It also assists in reviewing and revising the standards keeping in view the forthcoming changes in both the internal and external environment of the business. Improving employee motivation: The controlling function seeks to motivate the employees and helps them to give better performance. This is because it makes them aware well in advance about what they are expected to do and what the standards of performance are on the basis of which they will be judged.

Question. Deepak is working in an MNC. He has created an atmosphere of proper controlling in his department.
In order to do so he keeps himself aware about any dishonest behaviour and takes a stern action immediately. Recently he has installed CCTV cameras to keep vigil on the employees.
1. In the above case which importance of controlling has been implemented by Deepak?
2. Name one more importance of controlling other than the above highlighted.
3. Can you suggest one more way by which Deepak could have implemented controlling?
Answer. 1. The importance of controlling implemented in the above case by Deepak is:
Controlling ensures proper order and discipline in the organisation.
2. One more importance of controlling. Controlling helps in making efficient use of resources.
3. Deepak could have implemented controlling by issuing balance score card to every employee. In this way could check their performance and contribution to the organisation on a daily basis.

Question. Explain how controlling helps in
(i) Accomplishing organisational goals; and
(ii) Judging accuracy of standards.
Answer. (i) Accomplishing organisational goals: The controlling function measures the performance against the pre-determined standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals. In other words, by controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives.
(ii) Judging accuracy of standards A sound controlling system helps the management to verify whether the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and helps in revising standards as and when required

Question. GVR Ltd. is engaged in manufacturing machine components. The target production is 200 units per day. The company had been successfully attaining this target until two months ago. Over the last two months, it has been observed that daily production varies between 150-170 units.
1. Identify the management function to rectify the above situation.
2. Briefly state the procedure to be followed so that the actual production may come up to the target production.
Answer. 1.The controlling function of management is needed to rectify the above situation.
2. The procedure to be followed so that the actual production may come up with the target production is as follows:
(A) Providing training to workers if the workers are not well versed with the production process.
(B) Improving the work environment if it is not conducive to efficient working.
(C) Ensuring timely availability of the raw materials and other equipment if they are not made available on time.
(D) Replacing the machinery if it is defective or has become obsolete.

Question. Chiranjeev has set up an export house after completing his masters in fashion designing. As the quality of the garment depends on the quality of raw material used, he assures that the fabric meets the requirements by conducting a series of tests for the fabrics like shrinkage test, testing colour fastness to washing, colour fastness to light, colour fastness to perspiration etc through laboratory tests. Later on, at the production areas, fabric inspection is also conducted by stopping the production process. The tests help to detect the deviations and also take corrective action. Moreover, he ensures that complete training about production work was given to every worker at the time of joining his export house.
In context of the above case:
1. Identify the function of management being performed by Anubhav by conducting tests to assure for the quality of the garments manufactured in his export house.
2. Briefly explain the term ‘deviations.’
Answer. 1. Controlling is the function of management being performed by Anubhav by conducting tests to assure for the quality of the garments manufactured in his export house.
2. The term ‘deviations’ refers to the difference between the actual performance and planned performance. If the actual performance is more than the planned performance, it may be said to be positive in nature or vice-versa.

Long answer type Questions

Question. Kapil & Co. is a large manufacturing unit. Recently the company had conducted time and motion studies and concluded that on an average, a worker could produce 300 units per day. However, it has been noticed that the average daily production per worker is in the range of 200-225 units.
1. Name the function of management and identify the steps in the process of this function which helped in finding out that the actual production of a worker is less than the set target.
2. To complete the process of the function identified in (1) and to ensure the performance as per time and motion studies, explain what further steps a manager has to take?
Answer 4. Controlling is the function of management which helped in finding out that the actual performance of a worker is less than the set target.
The steps involved in the controlling function of management which helped in finding out that the actual performance of a worker is less than the set target are outlined below:
• Setting performance standards in clear, specific and measurable terms.
“Recently the company had conducted time and motion studies and concluded that on an average, a worker could produce 300 units per day.”
• Measurement of actual performance as far as possible in the same units in which standards are set.
“It has been noticed that the average daily production per worker is in the range of 200-225 units”.
• Comparing actual performance with standards to identify deviations if any. In the given case there is a deviation in output in the range of 25-50 units per worker. In order to complete the process of controlling and to ensure the performance as per time and motion studies the manager has to further take the following two steps:
• Analysing deviations through critical point control and management by exception approach: In the given situation, there is a deviation in output in the range of 25-50 units per worker. The manager should analyse the reasons for the same. The possible reasons for the same are:
     • The workers are not well versed with the production process.
     • The working environment is not conducive to efficient working.
     • The raw materials and other equipment are not available on time.
• Taking corrective action: The deviations require immediate management attention so that they do not reoccur in future. Therefore, the manager should take appropriate corrective action after analysing the situation like providing training to workers, improving the work environment, and ensuring timely availability of the raw materials and other equipment.

Question. Explain the various steps involved in the process of control.
Answer. Controlling Process:
1. Setting Performance Standards: Standards are the criteria against which actual performance would be measured. Thus, standards become basis for comparison and the manager insists on following of standards.
2. Measurement of Actual Performance: Performance should be measured in an objective and reliable manner which includes personal observation, sample checking. Performance should be measured in same terms in which standards have been established, this will facilitate comparison.
3. Comparing Actual Performance with Standard: This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired performance. If the performance matches the standards it may be assumed that everything is under control.
4. Analysing Deviations: The deviations from the standards are assessed and analyzed to identify the causes of deviations.
5. Taking Corrective Action: The final step in the controlling process is taking corrective action. No corrective action is required when the deviation is within the acceptable limits. But where significant deviations occur corrective action is taken.

Question. ‘AS Ltd.’ is a large company engaged in assembling of air-conditioners. Recently the company had conducted the ‘Time’ and ‘Motion’ study and concluded that on an average, a worker can assemble ten air-conditioners in a day. The target volume of the company in a day is assembling of 1,000 units of airconditioners.
The company is providing attractive allowances to reduce labour turnover and absenteeism.
All the workers are happy. Even then the assembling of air-conditioners per day is 800 units only. To find out the reason, the company compared actual performance of each worker and observed through CCTV that some of the workers were busy in gossiping.
1. Identify and explain the function of management discussed above.
2. State the steps in the process of the function identified which are discussed in the above paragraph.
Answer. (i) The function of management discussed above is Controlling.
Controlling means comparison between actual output and planned output to find out the reasons for deviations corrective measures to stop such deviations in future.
(ii) The steps involved in the process of controlling which are discussed in the above paragraph are:
a. Setting standards of performance: “concluded that on an average, a worker can assemble ten airconditioners in a day.” “The target volume of the company in a day is assembling of 1,000 units of airconditioners.”
b. Measurement of actual performance:” Even then the assembling of air-conditioners per day is 800 units only.”
c. Comparison of actual performance with the standards: The company compared actual performance of the workers with the planned performance and noted deviation of 200 units.
Analysing deviations: “To find out the reason, the company compared the actual performance of each worker and observed through CCTV that some of the workers were busy in gossiping’s.

Question. Savita has been assigned the job of quantity controller. She knows this is a tough job but she also realises the importance of it. Her daily routine is to send alarm to the manufacturing department about the deviations in the number of units produced so that the target of the day could be achieved. This helps the whole department to focus towards its main plan of action. However, one day she realises that the number of units which are to be produced is 500 which is very high and creates chaos at the shop floor. She discusses it with the management and the target is reduced to 450. This has helped the manufacturing  department in maintaining quality of the work done. There are 10 workers at the shop floor where Savita does inspection. She divided the task into 45 units for each worker so that by the end of the day the target of the department is completed.
1. Which benefits of controlling have been highlighted in the above case?
2. Name one department where controlling should be applied in proper coordination with the manufacturing department for proper quality control of the manufactured products
Answer. 1. The benefits of controlling highlighted in the above case are:
(I) Controlling helps in accomplishing organisational goals. Her daily routine is to send alarm to the manufacturing department about the deviations in the number of units produced so that the target of the day could be achieved.
(II) Controlling helps in judging accuracy of set standards. However, one day she realises that the number of units which are to be produced is 500 which is very high and creates chaos at the shop floor, she discusses it with the management and the target is reduced to 450.
(III) Controlling helps in facilitating coordination in action. She has divided the task into 45 units for each worker so that by the end of the day the target of the department is completed.
2. One department where controlling should be applied in proper coordination with the manufacturing department for proper quality control of the manufactured products is purchase department. Unless and until input is good output can never be good. For high quality manufactured product, the raw material should be of high quality and this is the area of concern of the purchase department.

Question. ’Controlling is an indispensable function of management’. Do you agree? Give four reasons in support of your answer.
                                                                                         Or
State any five points that highlight the importance of ‘controlling’ function of management.
Answer. Yes, controlling is an indispensable function of management, it is a force which helps the management to attain the pre-determined or planned performance.
Reasons for good control system
Importance of controlling are as follows;
(i) Accomplishing organisational goals The controlling function measures the performance against the pre-determined standards and corrects deviations. This helps in ensuring that organisation is moving on right track to achieve the organisational goals. In other words, by controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organisational objectives.
(ii) judging accuracy of standards A sound controlling system helps the management to verify whether the standards set are accurate and objective. It keeps a careful check on the changes, which are taking place in the organisation and helps in revising standards as and when required.
(iii) Making efficient use of resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with pre-determ ined standards and norms. This ensures that resources are used in the most effective and efficient manner.
(iv) It improves employees’ morale The implementation of controlling makes all the employees to work with complete dedication because they are aware that their performance wiil be evaluated and they will have a chance to build their reputation in the organisation. The employees who show good performance are rewarded by giving them promotions, cash prizes, etc.
(v) It helps in better performance Planning and controlling are closely inter-related as the real test of planning is controlling. Control reveals deficiencies and deviations, suggests corrective actions for prevention of deviations and deficiencies through modified planning.
(vi) Facilitates coordination Control keeps all activities and efforts within their fixed boundaries and makes them move towards the set goals. Thus, control facilities coordination, it provides unity of direction.