Read the following passage and answer the question.

Managers at a New York City import-export company suspected that two employees were robbing it. Corporate Defense Strategies (CDS) of Maywood, New Jersey, advised the firm to install a software program that could secretly log every single stroke of the suspects’ computer keys and send an encrypted e-mail report to CDS. Investigators revealed that the two employees were deleting orders from the corporate books after processing them, pocketing the revenues, and building their own company from within. The programme picked up on their plan to return to the office late one night to steal a large shipment of electronics. Police hid in the rafters of the firm’s warehouse, and when the suspects entered, they were arrested. The pair was charged with embezzling 3 million over two and a half years, a sizable amount of revenue for a 25 million-a-year firm.

Which of the following option denotes the correct steps of "Controlling process"?

Setting standards → Measurement of actual performance → Comparison of actual performance with standards → Analyzing deviations → Corrective action plan 

The correct answer is option 2- Setting standards → Measurement of actual performance → Comparison of actual performance with standards → Analyzing deviations → Corrective action plan.

Controlling is a systematic process involving the following steps.
1. Setting performance standards- : The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organisation strives to work.

2. Measurement of actual performance- Once performance standards are set, the next step is measurement of actual performance. Performance should be measured in an objective and reliable manner. There are several techniques for measurement of performance.

3. Comparison of actual performance with standards- This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired results. Comparison becomes easier when standards are set in quantitative terms.

4. Analysing deviations- Some deviation in performance can be expected in all activities. It is, therefore, important to determine the acceptable range of deviations. Also, deviations in key areas of business need to be attended more urgently as compared to deviations in certain insignificant areas.

5. Taking corrective action- The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within acceptable limits. However, when the deviations go beyond the acceptable range, especially in the important areas.