Question

Piyush is the Production Manager of a shoe company called . He has 1000 workers working under him in his department. Piyush booked a special order for 300 pairs of gents shoes at an estimated cost price of Comforty < 500 per pair plus 20 percent profit margin. The order is to be completed within 10 days. After completion of the order, Piyush found out that the production cost of one pair of shoes was 600 Rupees. He tried to find out the reason but couldn't. He reported it to the Chief Executive Officer. The Chief Executive Officer appointed Abhay to find out the cause. Abhay was not only a specialized Cost Accountant, but also a qualified Human Resource Manager. After two days, Abhay reported that the set targets could be completed with the help of only 800 workers, which revealed that there was overmanning in the organization. The organization was not utilizing the human resources optimally, which had led to higher labour cost. The above case highlights one of the points of importance of an important function of management.
(i) Identify the function of management. 
(ii) State any two points of importance of the function of management identified in part (i), except the one discussed in the above case.

Hint:

Controlling is not just about identifying mistakes but also about aligning actual performance with planned objectives and continuously improving future standards.

Answer 1

The case highlights the issue of overstaffing, which led to higher labor costs. This discrepancy was discovered through an analysis of actual performance versus expected performance — a core part of the controlling function of management. Controlling identifies deviations and helps take corrective actions to optimize performance.