Given below are two statements: one is labelled as Assertion (A) and the other is labelled as Reason (R).
Assertion (A): A good control system may not be able to prevent a fall in sales when a new rival enters the market.
Reason (R): Generally an enterprise cannot control external factors such as government policies, technological changes and competition.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both (A) and (R) are true and (R) is the correct explanation of (A).
Assertion (A): A good control system may not be able to prevent a fall in sales when a new rival enters the market. — True. Even a good control system cannot stop a rival from entering the market. So sales may still fall.
Reason (R): Generally an enterprise cannot control external factors such as government policies, technological changes and competition. — True. These factors arise outside the enterprise. This is the limitation called little control on external factors.
Why R explains A?
A new rival is competition, an external factor. Because the firm cannot control external factors, its control system cannot stop the rival’s effect on its 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.” “Summary … • Controlling suffers from certain limitations also. An organisation has no control over external factors. The control system of an organisation may face resistance from its employees. Sometimes controlling turns out to be a costly affair, especially in case of small organisations. Moreover, it is not always possible for the management to set quantitative standards of performance in the absence of which controlling exercise loses some of its effectiveness.” |