Question

Piyush is the Production Manager of a shoe company ‘Comforty'. He has 1000 workers under him in his department. Piyush booked a special order for 300 pairs of gents shoes at an estimated cost price of ₹ 500 per pair plus a 20% profit margin. This 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 ₹ 700. He tried to find out the reason but he couldn’t. He reported it to the Chief Executive Officer. For this the Chief Executive Officer appointed Abhay, who was not only a specialized Cost Accountant, but also a qualified Human Resource Manager. After two days, Abhay reported that the set target could have been completed by only 800 workers. This revealed that there was overmanning in the organization. The organization was not utilizing the human resources optimally which had led to high labour cost. 

The above case highlights an important function of management.

1. Identify the function of management discussed above.
2. State any three points of importance of the function identified in (i) above.

Answer 1

1. The role of management that is being highlighted here is 'Controlling'.
2. The importance of controlling can be highlighted by the following points.
   1. Making Efficient Use of Resources: Managers use control to reduce waste and spoiling of resources. Predetermined rules and norms guide each task, ensuring efficient resource utilization.
   2. Improving Employee Motivation: It helps employees understand their responsibilities and performance standards before being evaluated. This inspires them to do better.
   3. Ensuring Order and Discipline: Controlling employee activity promotes order and discipline. It also prevents dishonest behavior among employees and minimizes difficult actions.