Question

Read the passage given below and answer the questions that follow.

XYZ Company had planned to increase its profit margin by 30% in the current financial year. But it could not achieve the set target in the first quarter of the year due to cases of theft by employees. The Board of Directors formulated a policy of ‘zero tolerance’ for theft. To prevent such cases, it was decided to install CCTV cameras in the rooms where the expensive products were stored. The team of Senior Managers communicated the same to all the employees of the organisation. The decisions were implemented and instructions were given to the concerned departments to impose a penalty if an employee was found guilty. The Human Resource department incorporated the same in the employee handbook.

1. Explain any two steps of controlling highlighted in the above case. (2)
2. With reference to the above case, mention any two objectives of communication. (2)
3. Provide any four points to highlight the importance of Controlling. (4)

Answer 1

(i) Two steps of controlling highlighted in the above case are:

1. Establishing Performance Standards: Setting standards is the first step in controlling, as it creates a benchmark for measuring performance. XYZ corporation aimed to expand its profit margin by 30% in the current financial year.
2. Taking Corrective Actions: This step ensures remedial actions to stop future deviations. To reduce future losses, corrective measures are initiated in response to deviations. In this case, the company’s corrective measures to stop additional theft include the installation of CCTV cameras, the Board of Directors’ adoption of a zero-tolerance policy, and penalties.

(ii) With reference to the above case, two objectives of communication are as follows:

1. To Educate and Inform Employees: In this case, a group of senior managers informed every employee of the company’s zero tolerance policy for stealing. This communication objective ensures that every employee is aware of the company's new policy and the consequences of theft should any employee be found guilty.
2. Facilitating Cooperation and Compliance: Effective communication promotes employee collaboration and compliance with the new policy.

(iii) Four points highlighting the importance of controlling are as follows:

1. Attainment of Organisational Goals: The management’s controlling function ensures that everything is done in accordance with the plan by quickly identifying and correcting any deviations.
2. Optimum Utilisation of Resources: The controlling function ensures that work meets standards and maximises resource utilisation, resulting in higher productivity.
3. Coping with Change: The controlling role enables managers to anticipate, monitor, and respond to developments in a complex and dynamic business environment. A strong control system is crucial for managing the intricacies of a dynamic business environment.
4. Minimises Deviations: Controlling detects deviations from planned activities and prompts remedial actions, reducing losses and improving operational efficiency.