Case Problem A company M limited is manufacturing mobile phones both for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction. Also mobile market in India has grown tremendously and new players have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing. 1. Identify the benefits the company will define from a good control system. Ans: When company starts following a good control on operations, it leads to derive benefits which are (i) Helps in achieving desired goals. (ii) Judging accuracy of operations. (iii) Making efficient and effective use of resources. (iv) Improving employee morale. (v) Ensuring proper flow of orders and the whole system is in discipline. (vi) It facilitates the co-ordination and improve the performance of every individual. 2. How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained? Ans: C ompany relates its planning with control in this line of business by implementing effective control system as this will help in two aspects planning makes controlling effective and efficient whereas controlling improves future planning because it is like a postmortem of past activities to find out deviations from the standards and in order to ensure that its plans are actually implemented and targets are attained they will take the help from controlling process as it is a systematic process and it leads to following benefits (i) S etting Up of Standards I n this step, company set some targets against which the actual performance is measured. (ii) M easuring of Performance In this step, company is able to measure the performance and evaluating that what is actually done by the employees. (iii) C ompare Performance After evaluating the actual result, company compares the actual performance with the planned one this helps in knowing that the desired goal is achieved or not. (iv) A nalysing Deviations T his refers to the difference between actual and desired performance. It helps in knowing to the company that the deviation is positive or negative. It needs focus on which part rather than analysing whole. (v) T aking Corrective Measures Final step is to know the type of deviation and trying to remove this deviation and in future it matches with the plans. 3. Give the steps in the control process that the company should follow to remove the problems it is facing. Ans: T he company should follow these steps in a systematic manner (i) Setting performance standards (ii) Measurement of actual performance (iii) Comparison of actual performance with standards (iv) Analysing deviations (v) Taking corrective actions 4. What techniques of control can the company use? Ans: T he company should follow the modern techniques to control the system (i) ROI (Return on Investment) It is a useful technique of controlling overall performance of a company. It indicates how effectively resources are being used, facilitates balanced use of capital employed, focuses on profits and relates them to capital invested. (ii) R esponsibility Accounting U nder this technique, organisation is divided into centres which is responsible for overall growth of various departments. Responsibility centres in the organisation are (a) Cost Centre Under this, one can check the production and operational cost. (b) R evenue Centre Sales or marketing departments come under this, it is responsible for generating revenue. (c) P rofit Centre Profit = Revenue – Cost. It ensures the actual profit derived from the business. (d) I nvestment Centre T his centre ensures the optimum use of assets and it makes use of return on investment. (iii) M IS (Management Information System) It is a control technique which provides information and support for effective managerial decision making. It provide accurate information to the managers, helps in planning, controlling, provides cost effective information and many more.