Pribciples of Business Management Solved Question Paper - 2013 (Old Course)

2013 (Old Course)
1.(a)  Describe the nature of business management.
Ans: Management - Introduction
Management is the coordination of all resources through the process of planning, organising, directing, staffing and controlling in order to attain stated objectives effectively and efficiently.  Effectively means doing the right task, completing activities and achieving goals and efficiently means to attain objectives with least amount of resources at a minimum cost. This process starts at the top and continues in more or less degree at every level of the organisation.
According to Harold Koontz, “Management is an art of getting things done through others and with formally organised groups."
According to F.W. Taylor, “Management is an art of knowing what do you want to do and then seeing that is is done in the best and cheapest way.”
According to Henry Fayol, “To manage is to forecast, to plan, to organize, to command to co-ordinate and control.
George R. Terry, “Management is a distinct process consisting of planning, organising, actuating and controlling performance t determine and accomplish the objectives by the use of people and resources,”
Thus management may be defined as a process including various activities like planning, organising , directing, controlling  co-ordination etc in order to make optimum use of men machinery, materials and money by way of preparing plans, policies and purposes, for achieving organisational goals under healthy internal environment.
Nature or characteristics of Management:

On the basis of critical analysis of  various definitions of management, the main features of management may be stated as follows :
1)      Management is a process: Management is a continuous activity which aims at making optimum use of the available resources like men, machinery, materials, and money, for achieving organisational goals.
2)      Management deals with several functions: Management includes several functions such as planning, organising, staffing, directing co-ordinating, controlling, motivating or actuating, controlling, decision making, leadership and communication.
3)      Management is goal oriented: Every management activity is directed towards achieving predetermined objectives of the organiation.
4)      Management is a group of organized activities: Management plans, organizes, co-ordinates, directs and controls the group efforts so as to achieve organisational goals efficiently and effectively.
5)      Management is basically a factor of production: The factors of production include land, labour, capital and entrepreneurs.  A manager or entrepreneur mobilizes resources like land, labour and capital to produce’ output to satisfy needs of the society and earn profit.
6)      Management is a discipline: Management , although borrows several concept for other social sciences, it has developed its own body of principles and theories so as to become a special discipline or subject of study for potential managers.
7)      Management is  a science and also an art: Science is defined as a systematized body of knowledge and it uses scientific methods of observation measurement, experimentation etc.  Its principles are exact and university applicable. Management has systematized body of knowledge and its principles are evolved on the basis of   observation. But management being a social science, it is not an exact science.  So management is a soft or inexact science.
Art refers to the way of doing specific things i.e. it indicates “ how an objective is to be achieved.  it is the know-how to achieve the desired results.  Art needs continuous practice to reach the level of perfection.  An art is application of science. Thus art and science are interrelated in the sense that putting scientific principles into practice requires art, which needs special knowledge and skills.
Management is both a science as well as an art.  The science of management provides certain principles that can guide managers in the professional efforts, while the art of management deals with tackling every situation in an effective manner.  Planning and organising emphasize the science of management while direction, communication motivation coordination and control emphasize art of management.  Getting work done through people is an art of management.
8)      Management is dynamic: Under dynamic environment management faces several challenges hence efforts are made to develop and use new techniques for managing the organisations effectively and efficiently.  as social change takes place, management also changes to overcome the problems whenever they arise.
9)      Management is a Profession: Profession is an occupation for which specialized skills and training are required and these skills are used not for private profit but for the larger interests of the society.  There is a professional body to control the behaviour of its members.  At present management is not a full fledged profession but it is heading towards becoming a profession.
(b) Describe the contribution of Henry Fayol to the development of management through.
Ans: Henri Fayol (1841-1925): was a Frenchman with considerable executive experience who focused his research on the things that managers do. He wrote during the same period Taylor did. Taylor was a scientist and he was managing director of a large French coal-mining firm. He was the first to envisage a functional process approach to the practice of management. His was a functional approach because it defined the functions that must be performed by managers. It was also a process approach because he conceptualized the managerial job in a series of stages such as planning, organizing and controlling. According to Fayol, all managerial tasks could be classified into one of the following six groups:
• Technical (related to production);
• Commercial (buying, selling and exchange);
• Financial (search for capital and its optimum use);
• Security (protection for property and person);
• Accounting (recording and taking stock of costs, profits, and liabilities, keeping balance sheets, and compiling statistics);
• Managerial (planning, organizing, commanding, coordinating and control);
He pointed out that these activities exist in every organization. He focused his work on the administrative or managerial activities and developed the following definition:
• Planning meant developing a course of action that would help the organization achieve its objectives.
• Organizing meant mobilizing the employees and other resources of the organization in accordance with the plan.
• Commanding meant directing the employees and getting the job done.
• Coordinating meant achieving harmony among the various activities.
• Controlling meant monitoring performance to ensure that the plan is properly followed.
Henry Fayol's 14 Principles of Management:
The principles of management are given below:
1)      Division of work: Division of work or specialization alone can give maximum productivity and efficiency. Both technical and managerial activities can be performed in the best manner only through division of labour and specialization.
2)      Authority and Responsibility: The right to give order is called authority. The obligation to accomplish is called responsibility. Authority and Responsibility are the two sides of the management coin. They exist together. They are complementary and mutually interdependent.
3)      Discipline: The objectives, rules and regulations, the policies and procedures must be honoured by each member of an organisation. There must be clear and fair agreement on the rules and objectives, on the policies and procedures. There must be penalties (punishment) for non-obedience or indiscipline. No organisation can work smoothly without discipline – preferably voluntary discipline.
4)      Unity of Command: In order to avoid any possible confusion and conflict, each member of an organisation must received orders and instructions only from one superior (boss).
5)      Unity of Direction: All members of an organisation must work together to accomplish common objectives.
6)      Emphasis on Subordination of Personal Interest to General or Common Interest: This is also called principle of co-operation. Each shall work for all and all for each. General or common interest must be supreme in any joint enterprise.
7)      Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator for good performance. Exploitation of employees in any manner must be eliminated.
8)      Centralization: There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided.
9)      Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all members of the organisation from the top to the bottom. Scalar denotes steps.
10)   Order: Fayol suggested that there is a place for everything. Order or system alone can create a sound organisation and efficient management.
11)   Equity: An organisation consists of a group of people involved in joint effort. Hence, equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint collaboration.
12)   Stability of Tenure: A person needs time to adjust himself with the new work and demonstrate efficiency in due course. Hence, employees and managers must have job security. Security of income and employment is a pre-requisite of sound organisation and management.
13)   Esprit of Co-operation: Esprit de corps is the foundation of a sound organisation. Union is strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible for good performance.
14)   Initiative: Creative thinking and capacity to take initiative can give us sound managerial planning and execution of predetermined plans.
2.(a) What do you mean by planning? Explain the significance of planning in a business.
Ans: Introduction of Planning
Planning is the primary function of management.  Planning concentrates on setting and achieving objectives through optimum use of available resources.  Planning is necessary for any organisation for its survival growth and prosperity under competitive and dynamic environment.  Planning is a continuous process to keep organisation as a successful going concern,
In the words of:
Koontz and O’Donnel – “Planning is deciding in advance, what to do, how to do it, when to do it, and who is to do it.  It bridges the gap from where we are to where we want to go.”
Allen – “Management planning involves the development of forecasts, objectives, policies programmes, procedures, schedules and budgets.”
Haynes and Massie - Planning is a decision making process of a special kind.  It is an intellectual process in which creative thinking and imagination is essential.”
Alfred and Beatty - “Planning is the thinking process, the organized foresight, the vision based on fact and experience that is required for intelligent action.
Importance and Advantages of Planning
Planning is of vital importance in the managerial process. No enterprise can achieve its objectives without systematic planning. “Planning is the heart of management” The following points highlight the importance of planning function of management:
a)      Planning provides directions: By stating i n advance how work is to be done, planning provide direction for action. If goals are well defined, employees are aware of what the organisation has to do and what they must do to achieve those goals. Departments and individuals in the organisation are able to work in coordination. Planning keeps the organisation on the right path.  If there was no planning, employees would be working in different directions and the organisation would not be able to achieve its goals efficiently.
b)      Planning reduces the risks of uncertainty: Business enterprises operate in an uncertain environment and face several types of risks. Planning enables these enterprises to predict future events and prepare to face the unexpected events. With the help of planning, managers can identify potential dangers and take steps to overcome them. Thus, planning helps risk and uncertainty.
c)       Planning facilitates decision-making: Decision-making involves searching for various alternative courses of action, evaluating them and selecting the best course of action. Under planning, targets are laid down. With the help of these targets, managers can better evaluate alternative courses of action and select the best alternative. Plans lay down in advance what is to be done and how it is to be done. Therefore, decisions can be taken with greater confidence.
d)      Planning reduces overlapping and wasteful activities: Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. There is no confusion and misunderstanding. Useless and redundant activities are minimized or eliminated. It is easier to detect inefficiencies and take corrective measures to deal with them.
e)      Planning promotes innovative ideas: Planning is thinking in advance and, therefore, there is scope of finding better ideas and better methods and procedures to reach the objectives/goals of the enterprise. This forces managers to think differently about the future of the organisations from the present. Thus, planning makes the managers innovative and creative.
f)       Planning establishes standards for controlling: Planning provides the goals or standards against which the actual performance can be measured and evaluated. A comparison of actual performance with the standards helps to identify the deviations and to take corrective action. Planning makes control meaningful and effective. ‘Control is blind without planning.” Thus, planning provides the basis of control.
(b) Describe the various steps involved in decision-making process.
Ans: Decision Making - Introduction
Decision-making is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organisational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action.
Definitions of Decision-making
The Oxford Dictionary defines the term decision-making as "the action of carrying out or carrying into effect".
According to Trewatha & Newport, "Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem".
Steps Involved In Decision Making Process
Decision-making involves a number of steps which need to be taken in a logical manner. This is treated as a rational or scientific 'decision-making process' which is lengthy and time consuming. Such lengthy process needs to be followed in order to take rational/scientific/result oriented decisions. Drucker recommended the scientific method of decision-making which, according to him, involves the following six steps:
1.       Identifying the Problem: Identification of the real problem before a business enterprise is the first step in the process of decision-making. It is rightly said that a problem well-defined is a problem half-solved. Information relevant to the problem should be gathered so that critical analysis of the problem is possible. This is how the problem can be diagnosed. Clear distinction should be made between the problem and the symptoms which may cloud the real issue.
2.       Analyzing the Problem: After defining the problem, the next step in the decision-making process is to analyze the problem in depth. This is necessary to classify the problem in order to know who must take the decision and who must be informed about the decision taken. Here, the following four factors should be kept in mind:
a)      Futurity of the decision,
b)      The scope of its impact,
c)       Number of qualitative considerations involved, and
d)      Uniqueness of the decision.
3.       Collecting Relevant Data: After defining the problem and analyzing its nature, the next step is to obtain the relevant information/ data about it. There is information flood in the business world due to new developments in the field of information technology. All available information should be utilised fully for analysis of the problem.
4.       Developing Alternative Solutions: After the problem has been defined, diagnosed on the basis of relevant information, the manager has to determine available alternative courses of action that could be used to solve the problem at hand. Only realistic alternatives should be considered. It is equally important to take into account time and cost constraints and psychological barriers that will restrict that number of alternatives.
5.       Selecting the Best Solution: After preparing alternative solutions, the next step in the decision-making process is to select an alternative that seems to be most rational for solving the problem. The alternative thus selected must be communicated to those who are likely to be affected by it. Acceptance of the decision by group members is always desirable and useful for its effective implementation.
6.       Converting Decision into Action: After the selection of the best decision, the next step is to convert the selected decision into an effective action. Without such action, the decision will remain merely a declaration of good intentions. Here, the manager has to convert 'his decision into 'their decision' through his leadership.
7.       Ensuring Feedback: Feedback is the last step in the decision-making process. It is like checking the effectiveness of follow-up measures. Feedback is possible in the form of organised information, reports and personal observations. Feed back is necessary to decide whether the decision already taken should be continued or be modified in the light of changed conditions.
Every step in the decision-making process is important and needs proper consideration by managers. This facilitates accurate decision-making.

3.(a) Explain the concept of organising. Distinguish between centralization and decentralization.
Ans: Introduction of Organisation and organising
The term 'Organisation' can be used in different senses. It can be used as a group of person working together to as a structure of relationships or as a process of management.  When it is used to refer to a group of person working together, it means a concern, an undertaking or as enterprise.
When it is used to refer to a structure of relationships, it means the structural relationships among the positions and jobs and person (i.e., the framework of responsibility and authority) through which the enterprise functions, and it is called organisation structure.
On the other hand, Organising or Organizing in management refers to the relationship between people, work and resources used to achieve the common objectives (goals).
In the words of
Allen – “An organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.”
Mooney and Reily – “Organisation is the form of every human association for the attainment of a common purpose.”
Koontz & O’Donnel – Organising involves the establishment of an intentional structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part f it, the grouping of these activities, the assignment of such groups of activities to manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationships, horizontally and vertically in the organisation structure.
Centralization and Decentralization
Centralization: Centralization refers to the situation in which a minimum number of job activities and a minimum amount of authority are delegated to subordinates. Thus, Centralization refers to the concentration of authority at one point or at different levels. Centralization reduces the importance of subordinates and makes them mechanical, as the subordinates are only to execute whatever is ordered. The two definitions of centralization given by Louis Allen and Henry Fayol are:
In the words of Louis Allen, “Centralization is the systematic and consistent reservation of authority at central points within the organisation.” 
In the words of Henry Fayol “Everything that goes to increase the importance of the subordinates role is decentralization, everything which goes to reduce it is centralization”.
Decentralisation: It refers to the situation in which a significant number of job activity and a maximum amount of authority are delegated to subordinates. It signifies the necessity of dividing the managerial task to the lowest level of managers, with an intention to grant all the authority to make the particular division or department autonomous. Each department has the full authority to decide on all matters concerning the department except those matters which need to be left to the top management to decide.
Centralization and decentralization should not be confused with location of work. An organisation having branches in different places may be centralized. Similarly, an enterprise may be decentralized even though all its offices are located in one building. Here we will discuss the definitions of decentralization.
According to Koontz and Weihrich,” Decentralization is the tendency to disperse decision-making authority in an organized structure”.
According to Newman, Summer & Warren “Decentralization is simply a matter of dividing up the managerial work and assigning specific duties to the various executive skills.”
Difference between Centralization and Decentralization are given below:
Point of difference
1. Meaning
It refers to concentration of power or authority at higher level only.
It refers to evenly distribution of powers and authority at every level of management.
2. Authority at different levels
Top management retains maximum authority. The authority with middle and lower management is very low.
The authority is systematically divided at every level.
3. Suitable
It is suitable for small scale and small size organizations.
It is suitable for large scale organization.
4. Freedom of Actions
Managers have less freedom of actions.
Managers have more freedom at actions.


(b) Define span of management. Discuss the factors determining the span of management.
In the words of Spriegal, "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve. The span of supervision is also known as span of control, span of management, span of responsibility, span of authority and span of direction.
Factors influencing the span of Management
There are number of factors that influence or determine the span of Management in a particular organisation, the most important of these are as follows:
1)      The capacity and ability of the executive: The characteristics and abilities such as leadership, administrative capabilities; ability to communicate, to judge, to listen, to guide and inspire, physical vigour, etc. differ from person to person. A person having better abilities can manage effectively a large number of subordinates as compared to the one who has lesser capabilities.
2)      Competence and training of subordinates: Subordinates who are skilled, efficient, knowledgeable, trained and competent require less supervision, and therefore, the supervisor may have a wider span in such cases as compared to inexperienced and untrained subordinates who requires greater supervision.
3)      Nature of Work: Nature and importance of work to be supervised is another factor that influences the span of supervision. The work involving routine, repetitive, unskilled and standardized operations will not call much attention and time on the part of the supervisor.
4)      Time available for supervision: The capacity of a person to supervise and control a large number of persons is also limited on account of time available at his disposal to supervise them. The span of control would be generally narrow at the higher level of management because top manager have to spend their major time on planning, organising, directing and controlling and the time available at their disposal for supervision will be less.
5)      Degree of Decentralization and Extent of Delegation: If a manager clearly delegates authority to undertake a well-defined task, a well trained subordinate can do it with a minimum of supervisor's time and attention.
6)      Effectiveness of communication system: Faulty communication puts a heavy burden on manager's time and reduces the span of control.
7)      Quality of Planning: Effective planning helps to reduce frequent calls on the superior for explanation, instructions and guidance and thereby saves in time available at the disposal of the superior enabling him to have a wider span.
8)      Degree of Physical Dispersion: If all persons to be supervised are located at the same place and within the direct supervision of the manager, he can supervise relatively more people as compared to the one who has to supervise people located at different places.
9)      Assistance of Experts: the span of supervision may be wide where the services of experts are available to the subordinate on various aspects of work. In case such services are not provided in the organisation, the supervisor has to spend a lot of time in providing assistance to the workers himself and a such the span of control would be narrow.
4. (a) “Sound management depends on good leadership”. Enumerate the significance of leadership in management in the light of the above statement.
Ans: Introduction to Leadership
Leadership is the ability to build up confidence and deal among people and to create an urge in them to be led. To be a successful leader, a manager must possess the qualities of foresight, drive, initiative, self-confidence and personal integrity. Different situations may demand different types of leadership.
Leadership means influencing the behaviour of the people at work towards realizing the specified goals. It is the ability to use non-coercive (no force) influence on the motivation, activities and goals (MAG) of others in order to achieve the objectives of the organisation.
Koontz and 0' Donnel “Leadership is the ability of a manager to induce subordinates to work with confidence and zeal”.
George R Terry “Leadership is the activity of influencing people to strive willingly for group objectives”.
Nature and Characteristics of Leadership:
                An analysis of the definitions cited above reveals the following important characteristics of leadership.
a)      Leadership is a personal quality.
b)      It exists only with followers. If there are no followers, there is no leadership?
c)       It is the willingness of people to follow that makes a person a leader.
d)      Leadership is a process of influence. A leader must be able to influence the behaviour, attitude and beliefs of his subordinates.
e)      It exists only for the realization of common goals.
f)       It involves readiness to accept complete responsibility in all situations.
g)      Leadership is the function of stimulating the followers to strive willingly to attain organisational objectives.
h)      Leadership styles do change under different circumstances.
i)        Leadership is neither bossism nor synonymous with management.
Significance of Leadership
The importance of leadership are as follows:
a)      It improves motivation and morale: Through dynamic leadership managers can improve motivation and morale of their subordinates. A good leader influences the behaviour of an individual in such a manner that he voluntarily works towards the achievement of enterprise goals.
b)      It acts as a motive power to group efforts: Leadership serves as a motive power to group efforts. It leads the group to a higher level of performance through its persistent efforts and impact. On human relations.
c)       It acts as an aid of authority: The use of authority alone cannot always bring the desired results. Leadership acts as an aid to authority by influencing, inspiring, and initiating action.
d)      It is needed at all levels of management: Leadership plays a pivotal role at all levels of management because in the absence of effective leadership no management can achieve the desired results.
e)      It rectifies the imperfectness of the formal organizational relationships: No organizational structure can provide all types of relationships and people with common interest may work beyond the confines of formal relationships. Such informal relationships are more effective in controlling and regulating the behaviour of the subordinates. Effective leadership uses these informal relationships to accomplish the enterprise goals.
f)       It provides the basis of co-operations: Effective leadership increases the understanding between the subordinates and the management and promotes co-operation among them.
(b) Asses the role of financial and non-financial incentives in motivating employees of an organisation.
Ans:  Financial/Incentives Techniques of Motivation: Financial techniques refer to monetary rewards. Incentives are nothing but the inducements provided to employees in order to motivate them. There should be direct relationship between efforts and rewards, financial reward should be substantial in value and must be in parity with others.
Under -paying staff sends the message that your firm doesn’t value their work. Money is not a prime motivator but this should not be regarded as a signal to reward employees poorly or unfairly.
The financial incentives include:
1. Pay and Allowances: It includes basic pay, grade pay, and dearness allowance; travelling allowance, pay increments, etc. Good pay and allowances help the organization to retain and attract capable persons. However, good pay and allowances need not motivate all the people, especially who are enjoying security of job in government organizations and those for whom corruption is a way of life.
Some of the other issues are associated with bad attitudes, grievances, absenteeism, turnover, poor organizational citizenship, and adverse effect on employees’ mental and physical health.
2. Incentive Pay: Incentive pay plans are meant to increase output, which can be measured quantitatively. For incentive plan targets, the employees must have confidence that they can achieve the targets.
3. Gain Sharing: It is a reward system in which team members earn bonus for increasing productivity or reduce wastages. To illustrate, if the wastage is reduced from 5% to less the benefits may be shared equally with the team.
4. Profit Sharing: It means sharing of profits with the employees by way of distribution of bonus. Profit sharing plan has its shortcomings – one, that it has become a regular feature in government departments irrespective of performance and two, it may have no relation with individual efforts.
5. Stock Options: Many companies use employee stock options plans to compensate, retain, and attract employees. These plans are contracts between a company and its employees that give employees the right to buy a specific number of the company’s shares at a fixed price within a certain period of time.
Employees who are granted stock options hope to profit by exercising their options at a higher price than when they were granted. In India, stock options have primarily been used as a retention tool for a more selective group of employees.
6. Retirement Benefits: It includes the accumulated provident fund, gratuity, leave encashment and pension. The provision of terminal benefits provides assurance to employees during the service for their future
Non-financial Incentives/Techniques: Non-financial incentives do not involve money payments. These are also important in motivating employees as they bring in psychological and emotional satisfaction to them. These include so many techniques. People do work for money-but they work even more for meaning in their lives. In fact, they work to have fun.
Some of the important non-financial incentives include:
1. Job security: Nothing can motivate a worker, appointed temporarily, better than provision of job security. Even if a temporary worker puts in greater efforts, lack of job security will always pose a threat. If such a worker is given job security, he will be more committed to the organization.
2. Challenging work: Workers, who are dynamic in nature, do not show preference for routine jobs. They are always ready to accept challenging assignments, challenge can be brought through mentoring, job redesigning – job enlargement and job enrichment. Understand the capabilities of every individual in the organization and accordingly assign him work.
3. Recognition: It is important that the employer recognizes hard work. Even a word of appreciation from him would motivate the employees to maintain the same level of performance or do even better. Employees ranked a personal ‘thank you’ as the most sought after form of recognition, followed by a handwritten note of appreciation from the boss.
4. Better job Titles: Job titles do matter. Employees do show preference for certain designations. A salesman, for example, would like to be designated as a sales executive and a sweeper to be Sanitary Inspector.
5. Opportunities for Advancement: There should never be a stagnation point for any employee during the prime time of his career. The employer must always provide opportunities for his employees to perform well and move up in the hierarchy.
6. Empowerment: To stimulate an employee is his involvement in certain crucial decisions. For example, if the management decides to buy a new machinery for the factory, the workers’ viewpoints may be secured before making the final decision. The management should avoid unilateral decisions on such matters.
7. Competition: The management can encourage healthy competition among the employees. This would, certainly, motivate them to prove their capabilities. The management can also rank the employees according to performance. Such of those employees who have performed very well may be given merit certificates.
8. Job Rotation: By job rotation we mean that the employees will be exposed to different kinds of job. This certainly would break the monotony of employees. For example, in a bank an employee may work in the Savings Bank Section for sometime after which he may be posted to the cash section. Such a change not only motivates the employees to perform well but also prepares him to be versatile.
5. (a)Explain the steps in controlling process. Describe the essentials of an effective control system.
Ans: Control is one of the managerial functions. These functions start with planning and end at controlling. The other functions like organising, staffing, directing act as the connecting like between planning and controlling. Planning will be successful only if the progress planning and controlled, Planning involves setting up of goals and objectives while controlling seeks to ensure.
Steps in Controlling Process
In order to perform his control functions, a manager follows three basic steps. First of all, he establishes the standards of performance to ensure that performance is in accordance with me plan. After this, the manager will appraise the performance and compare it with predetermined standards. This step will lead the manager to know whether the performance has come up to the expected standard or if there is any deviation. If the standards are not being met, the manager will take corrective actions, which is the final step in controlling.
1)      Establishing standards: A standard acts as a reference line or basic of comparison of actual performance. Standards should be set precisely and preferably in quantitative terms. It should be noted that setting standards is also closely linked with and is an integral part of the planning process. Different standards of performance are set up for various operations at the planning stage, which serve as the basis of any control system. Establishment of standards in terms of quantity, quality or time is necessary for effective control. Standards should be accurate, precise, acceptable and workable. Standards should be flexible, i.e., capable of being changed when the circumstances require so.
2)      Measurement of performance: This step involves measuring of actual performance of various individuals, groups or units and then comparing it with the standards, which have already been set up at the planning stage. The quantitative measurement should be done in cases where standards have been set in quantitative terms. In other cases, performance should be measured in terms of quantitative factors as in case of performance of industrial relations manager. Comparison of performance with standards is comparatively easier when the standards are expressed in quantitative terms.
3)      Comparison: This is the core of the control process. This phase of control process involves checking to determine whether the actual performance meets the predetermined or planned performance. Manager must constantly seek to answer, “How well are we doing?” When a production supervisor checks the actual output or performance of his department with the production schedule, he is performing comparison aspect of control. When-an executive calculates the performance of his subordinates once in six months or   annuity, he is performing comparison aspect of control. Checking return on in investment is a comparison phase of control.
4)      Taking corrective action: The final step in the control process is taking corrective actions so that deviations may not occur again and the objectives of the organisation are achieved. This will involve taking certain decision by the management like re-planning or redrawing of goals or standards, assignment of clarification of duties. It may also necessitate reforming the process of selection and the training of workers. Thus, control function may require change in all other managerial functions. If the standards are found to be defective, they will be modified in the light of the observations.
Essentials of an Effective control system:
The following are the essentials or basic requirements of an effectively control system:
1)      Suitable: The control system must be suitable for the kind of activity intended to serve. Apart from differences in the systems of control in different business, they also vary from department to department and from one level in the organisation to the other. The manager must be sure that he is using the technique appropriate for control of the specific activity involved.
2)      Understandable: The system must be understandable, i.e., the control information supplied should be capable of being understood by those who use it. A control system that a manager cannot understand is bound to remain ineffective. The control information supplied should be such as will be used by the managers concerned. It is, therefore, the duty of the manager concerned to make sure that the control information supplied to him is of a nature that will serve his purpose.
3)      Economical: The system must be economical in operation, i.e., the cost of a control system should not exceed the possible savings from its use. The extent of control necessary should be decided by the standard of accuracy or quality required. A very high degree or standard of accuracy or quality may not really be-necessary.
4)      Flexible: The system of control must be flexible, i.e. workable even if the plans have to be changed. In case the control systems can work only on the basis of one specific plan, it becomes useless if the plan breaks down and another has to be substituted. A good control system would be sufficiently flexible to permit the changes so necessitated.
5)      Expeditious: Nothing can be done to correct deviations, which have already occurred. It is, therefore, important that the control system should report deviations from plans expeditious. The objective of the control system should be to correct deviations in the immediate future.
6)      Forward Looking: The control system must be forward looking, as the manager cannot control the past. In fact, the control system should be so designed so as to anticipate possible deviations, or problems. Thus deviations can be forecast so that corrections can be incorporated even before the problem occurs.
7)      Organisational Conformity: Since people carry on activities, and events must be controlled through people, it is necessary that the control data and system must conform to the organisational pattern. The control data must be so prepared that it is possible to fix responsibility for the deviations within the areas of accountability.
8)      Indicative of Exceptions at Critical Points: The management principle of exception should be used to show up not only deviations but the critical areas must also be fixed for most effective control.
9)      Objectivity: As far as possible the measurements used must have objectivity, particularly while appraising a subordinate's performance, the subjective element cannot be entirely removed.
10)   Suggestive Of Corrective Action: Finally, an adequate control system should not only detect failures must also disclose where they are occurring, who is responsible for them and what should be done to correct them. Overall summary information can cover up certain fault areas.

(b) Write an essay on ‘social responsibility of management’.                     Out of syllabus