Consider the following statements about controlling:
(A) Control is a costly affair as it involves a lot of expenditure, time and effort.
(B) Controlling turns out to be a costly affair, especially in case of large organisations.
(C) Managers must ensure that the costs of installing and operating a control system do not exceed the benefits derived from it.
(D) It is neither economical nor easy to keep a check on the key result areas of an organisation.
(E) It is neither economical nor easy to keep a check on each and every activity in an organisation.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C) and (E) only
(A) Control is a costly affair as it involves a lot of expenditure, time and effort. — Correct. Setting up and running control needs a lot of expenditure, time and effort.
(B) Controlling turns out to be a costly affair, especially in case of large organisations. — Incorrect. The cost is a problem for small organisations. A small enterprise cannot afford an expensive control system or justify its cost.
(C) Managers must ensure that the costs of installing and operating a control system do not exceed the benefits derived from it. — Correct. A control system is worth having only if its benefits are more than its cost.
(D) It is neither economical nor easy to keep a check on the key result areas of an organisation. — Incorrect. Key result areas are the critical points that control should focus on. What is neither economical nor easy is checking every activity.
(E) It is neither economical nor easy to keep a check on each and every activity in an organisation. — Correct. Checking each and every activity costs too much and is hard. This is why control focuses on key result areas.
NCERT (2026-27 Edition): “(iv) Costly affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small enterprise cannot afford to install an expensive control system. It cannot justify the expenses involved. Managers must ensure that the costs of installing and operating a control system should not exceed the benefits derived from it. …” “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.” |