'In a manufacturing organisation, an increase of 5 percent in the labour cost may be more troublesome than a 15 percent increase in postal charges'.
The above is an example of:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Critical point control
Option (1) Critical point control — Correct. It is neither easy nor cheap to check every activity, so control should focus on the key result areas (KRAs) that are critical to the success of the organisation. In the example, 5 per cent increase in labour cost may be more troublesome than 15 per cent increase in postal charges. Labour cost is a critical point; postal charges are not.
Option (2) Taking corrective action — Incorrect. It is the last step of controlling, where steps are taken to remove a deviation. The example is about which areas to watch.
Option (3) Analysing deviation by management — Incorrect. It means finding the causes of a deviation. The example does not look for causes.
Option (4) Feedback — Incorrect. Feedback is information about results sent back to the manager. The example is about choosing the key areas to control.
NCERT (2026-27 Edition): “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. These KRAs are set as the critical points. If anything goes wrong at the critical points, the entire organisation suffers. For instance, in a manufacturing organisation, an increase of 5 per cent in the labour cost may be more troublesome than a 15 per cent increase in postal charges.” |