Business Studies M.C.Q (1 Marks)

An efficient controlling system helps in achieving all the aforementioned objectives. Controlling refers to the process of assessing the progress of the current tasks and activities and setting the work standards to achieve the goals of the organisation. An efficient control system helps in keeping a close watch on the progress of the work towards the accomplishment of the organisational goals and takes the required corrective actions. It helps in tracking the changes taking place in the organisation and the business environment and thereby, helps in judging the accuracy of the standards set. Along with this, controlling boosts employee morale by telling them in advance about what is expected from them and motivating them to work according to the set policies.

Budgetary control technique of managerial control involves the preparation of budgets for each operation of the organisation and then comparing the realised results with the budgetary standards. A budget is a quantitative statement defining the objectives to be achieved in a specified time period and the policies to be followed.

A high labour turnover ratio implies that a company's employees leave their jobs at a relatively high rate. It increases the cost of recruitment, selection & training. To overcome this issue, corrective action must be taken for high labour turnover rate.

Controlling makes sure that proper direction is taken and that various factors are maintained properly. All the departments are controlled according to predetermined standards which are will co-ordinated with one another.

Planning is based on previous year's estimates, budgets, informations and decision-making of controlling process. Therefore, planning is a backward looking function.

Management audit implies a systematic assessment of the overall actions of the management of a company. It aims at evaluating the efficiency and effectiveness of the management and helps in identifying the areas where it lags behind. It reveals the deficiencies in performance and helps in taking corrective measures. Hence, management audit keeps a check on the overall performance of the management of the company.

Controlling as an essential part of management is forward as well as backward looking. It is a backward looking function in the sense that it assesses the work done and analyses deviations from the set standards. Based on these deviations it attempts to take the required corrective measures. Thus, it guides the future course of action and aims at improving the future performance. In this sense, it is also a forward looking function. Hence, we can say that controlling is forward as well as backward looking function.

The final step in the controlling process is taking corrective action.

Controlling means ensuring activities in an organisation which are to be performed as per the plans.

By exercising control, a manager seeks to reduce wastage and spoilage of resources, which helps in effective and efficient utilisation of resources.

Accounting centre is not a part of responsibility accounting. Responsibility accounting basically refers to a system in which different divisions of the organisation are established as responsibility centres. Herein, each department is given a set target and the head of the department (manager) is made responsible for achieving it. They are of different types of responsibility centres such as cost centre, investment centre, profit centre and revenue centre.

Two points in the context of importance of controlling are:

1. Helps in achieving organisational goals.
2. Making efficient use of resources.