Question : Case Study 5:
EFG Manufacturing is a company that produces consumer goods. The management team at EFG wants to implement a robust control system to improve productivity and optimize resource utilization.
Question:
Which step in the controlling process involves identifying the causes of deviations at EFG Manufacturing?
Option 1: Setting performance standards.
Option 2: Measuring actual performance.
Option 3: Comparing actual performance with standards.
Option 4: Taking corrective action.
Correct Answer: Taking corrective action.
Solution : The correct answer is (d) Taking corrective action.
Identifying the causes of deviations is a crucial step within the corrective action phase of the controlling process. In this context, EFG Manufacturing would need to analyze the differences between actual performance and established performance standards and then determine the root causes of these deviations. Once the causes are identified, the company can develop appropriate strategies to address them and bring performance back in line with the desired standards. This process of taking corrective action helps improve productivity and resource utilization by addressing any issues that might hinder efficient operations within the organization.
