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CMA Foundation · Fundamentals of Business Economics and Management · Introduction to Management

In Rohan Pharma, the production head finds that actual output was 8% below the target, investigates the reasons, and instructs the shop floor to correct the machine settings. Which sequence of steps in the control function does this best describe?

The situation shows measuring actual performance, comparing it with the standard and taking corrective action, which are the core steps of controlling. The head found an 8% shortfall against target, analysed the cause and fixed machine settings, so this is not forecasting, budgeting or delegation.

  1. ASetting standards, then motivating employees
  2. BMeasuring performance, comparing with standards and taking corrective actionCorrect
  3. CForecasting demand, then preparing a budget
  4. DDelegating authority, then assigning duties

Explanation

The head looked at actual output, compared it with target (an 8% shortfall) and acted to correct the deviation. These are the measurement, comparison and corrective action steps of controlling. The other options describe planning, directing or organizing activities.

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