Comprehension
Nishtha runs a chain of famous restaurants, ’Indian Kitchen’, in different parts of
Delhi. The restaurant chain was known for good quality food and quick service.
‘Indian Kitchen’ was generating good revenue and had goodwill in the market. Nishtha
would take a weekly report from all the Restaurant Managers and take necessary
action to resolve the problems, if any. Nishtha noticed a sudden decline in sales in one
of the restaurants. She questioned the Restaurant Manager who mentioned that the
restaurant is seeing a gradual decrease in the number of customers, but could not
provide a clear explanation for it. So, Nishtha formed a team to find out the causes of
the declining customers as this is the key area for restaurant business and is critical to
the success of business. By doing this, Nishtha is performing a step of the process of a
function of management.
Question: 1
Identify and explain the function of management discussed above.
Identify and explain the function of management discussed above.
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Controlling ensures that organizational objectives are achieved effectively by identifying and addressing deviations in performance.
Updated On: Feb 20, 2025
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Solution and Explanation
Function of Management: Controlling
- Controlling is a management function that ensures that all activities are performed as planned and in accordance with organizational objectives.
- It involves comparing actual performance with established standards, identifying deviations, and taking corrective measures to address these deviations.
- Controlling is a management function that ensures that all activities are performed as planned and in accordance with organizational objectives.
- It involves comparing actual performance with established standards, identifying deviations, and taking corrective measures to address these deviations.
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Question: 2
Explain the step of the function identified in (i) above, followed by Nishtha to find out the causes of declining revenue.
Explain the step of the function identified in (i) above, followed by Nishtha to find out the causes of declining revenue.
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To manage deviations effectively, focus on critical areas (Critical Point Control) and escalate only significant deviations (Management by Exception).
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Solution and Explanation
Step: Analyzing Deviations
- Analyzing deviations involves comparing actual performance with the standards to identify significant differences.
- Nishtha focused on a key area (customer footfall) that is critical to the restaurant business. This is referred to as Critical Point Control, where deviations in vital areas are given immediate attention.
- Management by Exception was applied as only significant deviations were escalated for detailed investigation.
- Analyzing deviations involves comparing actual performance with the standards to identify significant differences.
- Nishtha focused on a key area (customer footfall) that is critical to the restaurant business. This is referred to as Critical Point Control, where deviations in vital areas are given immediate attention.
- Management by Exception was applied as only significant deviations were escalated for detailed investigation.
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Question: 3
Explain the step Nishtha will take after she gets the report from the team formed to find out the causes of declining revenue.
Explain the step Nishtha will take after she gets the report from the team formed to find out the causes of declining revenue.
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Corrective actions should address root causes of deviations and focus on long-term improvements to maintain performance standards.
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Solution and Explanation
Step: Taking Corrective Action
- Taking corrective action involves addressing the root causes of the identified deviations to ensure that performance aligns with the planned standards.
- Nishtha will implement solutions based on the findings of the team, such as improving service quality, introducing new promotions, or addressing operational inefficiencies.
- Corrective actions ensure that similar deviations do not recur in the future.
- Taking corrective action involves addressing the root causes of the identified deviations to ensure that performance aligns with the planned standards.
- Nishtha will implement solutions based on the findings of the team, such as improving service quality, introducing new promotions, or addressing operational inefficiencies.
- Corrective actions ensure that similar deviations do not recur in the future.
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