A bakery could not meet its monthly sales standard. While analysing the deviation, the manager found that sales had fallen because a new tax raised the prices of all bakery items in the market.
Which cause of deviation did the manager find?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Environmental factors
Option (1) Organisational constraints — Incorrect. These are limits that come from inside the firm, such as its own rules and ways of working. Here the cause, a new tax, came from outside the bakery.
Option (2) Inadequacy of resources — Incorrect. This means the firm did not have enough money, material or staff to do the work. The bakery had no such shortage; its sales fell because prices went up.
Option (3) Environmental factors — Correct. Environmental factors are forces outside the firm, such as government policies, technological changes and competition. A new tax is a government policy. It is beyond the control of the bakery, so it is an environmental factor.
Option (4) Structural drawbacks — Incorrect. These are faults in the way the firm itself is organised. The structure of the bakery played no part in the fall in sales.
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.” “Step 4: Analysing Deviations: … After identifying the deviations that demand managerial attention, these deviations need to be analysed for their causes. Deviations may have multiple causes for their origin. These include unrealistic standards, defective process, inadequacy of resources, structural drawbacks, organisational constraints and environmental factors beyond the control of the organisation. It is necessary to identify the exact cause(s) of deviations, failing which, an appropriate corrective action might not be possible. …” |