Question

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.

• [(i)] Identify and explain the function of management discussed above.
• [(ii)] Explain the step of the function identified in (i) above, followed by Nishtha to find out the causes of declining revenue.
• [(iii)] Explain the step Nishtha will take after she gets the report from the team formed to find out the causes of declining revenue.

Hint:

Controlling is a forward-looking function — it not only checks past performance but also ensures future success by enabling timely corrective action based on reliable feedback and analysis.

Answer 1

(i) Function of Management: Controlling The function of management being discussed here is Controlling. Controlling refers to the process of monitoring actual performance, comparing it with planned standards, identifying deviations, and taking corrective actions to ensure the achievement of organisational goals. Line from the case: “Nishtha would take a weekly report from all the Restaurant Managers and take necessary action to resolve the problems, if any.”
This indicates that she was regularly reviewing the actual performance of different restaurant units and intervening when deviations were observed — which clearly reflects the controlling function.
(ii) Step of Controlling Followed by Nishtha: Analysing Deviations The step of controlling followed by Nishtha is Analysing Deviations. After receiving reports and observing a decline in sales in one restaurant, she did not ignore the matter. Instead, she questioned the manager and decided to investigate further. Line from the case: “So, Nishtha formed a team to find out the causes of the declining customers…”
This means she analysed the difference between the actual performance (declining customers and sales) and the standard (expected consistent performance) and sought to find the root causes of deviation. Analysing deviations is a crucial step as it helps in identifying which deviations are critical and need urgent managerial attention (strategic deviations).
(iii) Step to be Taken After Receiving the Report: Taking Corrective Action Once Nishtha receives the report from the team, the next logical step in the controlling process is Taking Corrective Action. Based on the findings of the investigation team, she will initiate appropriate measures to address the causes of declining customers. Corrective actions may include steps such as improving service quality, changing the restaurant staff, enhancing marketing efforts, improving hygiene, or revising the menu and pricing — depending on what the root causes were. Taking timely and effective corrective actions ensures that the organisation stays on track towards achieving its planned goals and eliminates the gap between actual and expected performance.