Question

Kapil and Kamal & Co is a large manufacturing unit. Recently, the company had conducted time and motion studies and concluded that on an average, a worker could produce 300 units per day. However, it has been noticed that the average daily production of a worker is in the range of 200-225 units.

1. Name the function of management which helped in finding out that the actual production of a worker is less than the set target.
2. To complete the process of the function identified in part (a), explain what further steps a manager has to take.
3. ‘If anything goes wrong with the performance of key activities, the entire organisation suffers. Therefore, the organisation should focus on them.’ Explain the statement with a suitable example.
4. With reference to actual and standard performance, briefly explain the term ‘deviations.’ Which type of deviations should be brought to the notice of the management?

Answer 1

a. Controlling: This function helps in comparing actual performance with set standards and identifying shortfalls or deviations.

b. Further Steps a Manager Has to Take

1. Comparison of Actual Performance with Standards: Compare the actual daily production (200–225 units) with the set standard (300 units) to quantify the deviation.
2. Analysis of Deviations: Identify reasons for the gap—e.g., machine downtime, worker inefficiency, lack of training, or poor raw materials.
3. Taking Corrective Action: Implement measures such as training, maintenance, or workflow changes to align actual performance with targets.

c. Focus on Key Activities 

Key activities are those that directly impact organizational success. 

Example: In a car manufacturing plant, if the assembly line stops due to a fault, production halts completely. Hence, more control is needed on such critical operations. This principle is known as Critical Point Control—ensuring key result areas are given top priority in monitoring and correction.

d. Deviations

• Deviation: The gap between actual performance (200–225 units) and the set standard (300 units).
• Reportable Deviations: Only significant deviations—those that impact key results or performance—should be brought to management’s notice. This is known as Management by Exception.