Peter is a production manager in a tyre manufacturing company. Recently he
noticed that his team could not achieve the target production of 80 units per
day. Instead on an average the production touched the target of only 65 units.
On thorough analysis he found out that the deviation between standard
production and actual production is far beyond acceptable range, on overall
analysis he also found out that there has been a marginal increase in office
stationery expenses. Moreover, he detected that the machine installed for the
purpose of manufacturing was not able to perform at its best Being a
management expert suggest Peter how he should deal with the existing
problem.
OR
Answers
Controlling is the process of monitoring organisational performance, finding out deviations (or gaps in between the actual performance and the set standards), and taking corrective action in order to achieve organisational goals (as per set standards)
Answer:Peter should follow the following principles of managerial control while analysing deviations:
Critical point control. According to this principle of managerial control a manager should focus on Key Result Areas (KRAs) that are critical to the success of an organisation. A manager should not waste his precious time on checking each and every activity in the organisation. He should focus on those areas which are critical to the success of the enterprise. In the above case Peter should focus on improving the performance of the machinery either by repairing it or by replacing it with the new one. Marginal increase in stationery expenses can be dealt later by him.
Management/Control by Exception. As per this principle of managerial control a manager trying to control everything may end up controlling nothing. Therefore, only significant deviations that go beyond the permissible limit should be brought to the notice of management. In the above case poor performance of machinery needs immediate managerial attention.
Explanation: