question_answer

A car manufacturing company sets a goal that in future they will expand their production by 15%. After measuring the performance, they noticed that the production has declined by 10% and the raw material is wasted by the production department.

(i) Can you find out, to which concept of controlling does it relate?

(ii) What values are being ignored in this case?

Answer:

(i) The concept of controlling which is being quoted is "comparing actual performance with standards'. After measuring the actual performance, it is being compared with the standards. In this case, the standard set is to increase production by 15% but actually it has declined by 10%. Infact the next step, i.e. 'analysing deviations' has also been undertaken and it is found out that raw materials have been wasted by the production department. (ii) The values ignored here, are: [a] Lack of commitment and hard work. [b] Wastage of resources and lack of responsible behaviour towards achieving targets.