A small enterprise decides against installing an elaborate control system. As per the limitations of controlling, which of the following explains this decision?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → It cannot justify the expenses involved in such a system.
Option (1) It cannot justify the expenses involved in such a system. — Correct. Control is a costly affair, as it needs a lot of expenditure, time and effort. A small enterprise cannot afford an expensive control system, because it cannot justify the expenses involved.
Option (2) Its employees would object to being kept under a strict watch. — Incorrect. Employees objecting to a strict watch is resistance from employees, a different limitation. The decision here turns on the cost of the system for a small firm.
Option (3) It cannot control external factors such as competition. — Incorrect. This is little control on external factors. No control system, big or small, can control competition, so it does not explain why a small firm avoids an elaborate one.
Option (4) Its standards would not be accurate and objective. — Incorrect. Checking whether standards are accurate and objective is judging accuracy of standards. It is an importance of controlling.
NCERT (2026-27 Edition): “(ii) Little control on external factors: Generally an enterprise cannot control external factors such as government policies, technological changes, competition etc.” “(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. …” |