Which of the following managers are applying critical point control?
(A) A car maker reviews the defect rate of its engines every week more closely than its stationery costs.
(B) A sales manager leaves small shortfalls to the team and is told of those beyond the permissible limit.
(C) A courier company focuses its control on delivery time, on which its business depends.
(D) A small workshop checks each piece it produces against the quality specifications.
(E) A factory sets output standards for each worker before the production run begins.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (C) only
Critical point control means focusing control on key result areas, which are critical to the success of the organisation.
(A) A car maker reviews the defect rate of its engines every week more closely than its stationery costs. — Correct. Engine defects decide a car maker’s success; stationery costs do not. So the engines are a critical point and get closer review.
(B) A sales manager leaves small shortfalls to the team and is told of those beyond the permissible limit. — Incorrect. Leaving small shortfalls to the team and reporting only those beyond the permissible limit is management by exception.
(C) A courier company focuses its control on delivery time, on which its business depends. — Correct. A courier’s business depends on delivery time, so it is a key result area and the focus of control.
(D) A small workshop checks each piece it produces against the quality specifications. — Incorrect. Checking every piece against quality specifications is how small organisations measure actual performance. It covers every piece instead of a few key areas.
(E) A factory sets output standards for each worker before the production run begins. — Incorrect. Fixing output standards before work starts is setting performance standards, the first step of controlling.
Critical point control picks the areas to watch; management by exception picks the deviations large enough to report.
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.” “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. Thus, if the plans lay down 2 per cent increase in labour cost as an acceptable range of deviation in a manufacturing organisation, only increase in labour cost beyond 2 per cent should be brought to the notice of the management. However, in case of major deviation from the standard (say, 5 per cent), the matter has to receive immediate action of management on a priority basis. …” |