Read the following passage and answer the question.

Joshi Ltd. is one of the biggest companies that make scooters in India. They usually sell about 50% of all the two-wheelers (scooters) in the country. The term demonetisation has become a household name since the government pulled the old ₹500 and ₹1,000 notes out of circulation in November 2016. Before the year 2016, the Indian government had demonetized bank notes on two prior occasions- once in the year 1946 and then again in the year 1978. In both cases, the purpose was to combat tax evasion by ‘black money’. Due to demonetization, many people were not buying new vehicles because there was not enough money around. Because of this, the production manager who is incharge of making the scooters decided to make fewer of them to match the lower demand in the market.

Which function of management is followed by the company to deal with the decreasing sales?

Controlling

The correct answer is option 4- Controlling.

In the passage, the production manager decides to reduce the number of scooters being made to match the fall in demand due to demonetization. This action reflects the Controlling function of management.

• Controlling involves:

  • Monitoring actual performance,

  • Comparing it with expected goals or market conditions,

  • And taking corrective action if there is a deviation.

Here, the drop in demand led the manager to take corrective action by reducing production — a classic example of controlling in management.