Answer :

a. The company will have the following benefits from a better control system:

a. It would help in achieving the goals of the organisation.


b. The resources of the organisation can be used effectively and efficiently.


c. The employees would be self-motivated and boats work harder to achieve the goals.


d. The manager would be able to assess the past performance and analyze it with the planned performance. If there is a gap between the two, corrective measures can be taken to analyze it.


e. It would lead to a proper flow of communication in the organisation.


f. It will increase the level of discipline and cooperation in the organisation.


b. The company can relate its planning with control in this line of business in the following manner:


1. Setting up of performance standards: It means setting up at target against which the actual performance will be measured. It is a basis of comparison and the manager will use it as a guideline for the future activities of the organisation. These standards must be kept within the ability of the organisation to achieve. They should be neither very low nor very high. They must be set keeping in mind the skills of the employees and the resources available with the organisation. For example and Organisation decide to have a standard profit of rupees 5 lakh quarterly. They must also have a time limit during which they have to be achieved. They can be both quantitative and qualitative. The quantitative standard includes the increasing profit or increasing sales. Qualitative standards include motivation and Goodwill factors.


2. Measurement of actual performance: The manager must evaluate the actual performance. Although the standards can be set in both quantitative and qualitative forms, measurement of performance in terms of quantitative factors is much easier. However, it must be understood that at times the employees focus more on achieving the quantitative standard at the cost of the qualitative standard. The performance should be measured in an objective manner. There are many methods for the measurement such as sample checking and personal observation.


3. Comparison of the actual performance with the planned performance: The manager must evaluate the actual performance with the standard performance. If there is a mismatch between the two, the manager must evaluate the degree of deviation. Minor deviations are advised to be ignored. If the deviations are major, immediately.


4. Analyzing the deviations: The deviations must be analyzed carefully by the manager. The deviations in key areas of the business must be attended immediately as compared to the deviations in other in significant areas. The manager can use critical point control and management by exception principle in this regard. Critical point control means focusing only on the key result area that affects the entire organisation. Management by exception means only the significant deviations that are beyond the permissible limit should be controlled. Deviations can be caused by many factors such as underutilization in of resources, deficiency in process, and change in the business environment


5. Taking corrective actions: If the deviations are beyond the permissible limit, the manager must take corrective actions. The aim is to correct the deficiency to that they do not occur again.


c. The company should follow the following steps in a systematic manner to remove the problems it is facing:


1. Setting up of performance standards.


2. Measurement of actual performance.


3. Comparison of the actual performance with the planned performance.


4. Analyzing the deviations


5. Taking corrective actions


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