The steps of Controlling Process are:
(A) Standards are set in quantitative as well as qualitative terms.
(B) Performance is measured in an objective and reliable manner.
(C) Use critical point control or management by exception techniques.
(D) Correct the deviation if it is beyond the acceptable limit.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B), (C), (D)
(A) Standards are set in quantitative as well as qualitative terms. — first. Controlling begins by setting performance standards, the targets against which work will be judged. Some can be put in numbers, such as units produced; others, such as the goodwill of the firm, cannot.
(B) Performance is measured in an objective and reliable manner. — second. Actual performance is measured, in the same units as the standard, so that the two can be compared fairly.
(C) Use critical point control or management by exception techniques. — third. Once actual and standard are compared, the deviations are analysed. A manager cannot look into every small difference. So he watches the key result areas (critical point control) and deals only with deviations that go beyond the permitted limit (management by exception).
(D) Correct the deviation if it is beyond the acceptable limit. — fourth. The last step is corrective action, taken only for the serious deviations picked out in the step before.
NCERT (2026-27 Edition): “Controlling Process Controlling is a systematic process involving the following steps. “Step 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. Standards can be set in both quantitative as well as qualitative terms. For instance, standards set in terms of cost to be incurred, revenue to be earned, product units to be produced and sold, time to be spent in performing a task, all represents quantitative standards. …” “Step 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. …” “Step 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. …” “1. Critical Point Control: It is neither economical nor easy to keep a check on each and every activity in an organisation. Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an organisation. …” “2. Management by Exception: Management by exception, which is often referred to as control by exception, is an important principle of management control based on the belief that an attempt to control everything results in controlling nothing. Thus, only significant deviations which go beyond the permissible limit should be brought to the notice of management. …” “Step 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. …” |