Q.HG Air Conditioner Pvt. Ltd. is lagging behind its scheduled production target by a month. Despite a high demand, the company is struggling to meet its production target. Even after taking measures like training of employees and assigning additional workers and equipment to the project, the targets could not be met. The Production Manager, now, decided to revise the standards. Identify the step of the controlling process under which the Production Manager decided to revise the standards. (A) Setting performance standards (B) Measurement of actual performance (C) Analysing deviations (D) Taking corrective action

Management control is not a passive exercise of recording what went wrong. It is a dynamic, problem-solving process that closes the loop between planning and execution. When RAVL set a target of 8,000 bulbs for October, they established a performance standard. When they measured actual output at 6,000 bulbs, they identified a shortfall. The investigation that followed pinpointed the cause—shortage of trained workers. But none of this matters unless someone acts on the findings.

The controlling process unfolds in a logical sequence. First, standards are set (the 8,000-bulb target). Then actual performance is measured (the 6,000 bulbs produced). Next comes comparison, where the gap between standard and actual is analyzed and reasons are identified (the shortage of trained workers). Each of these steps is diagnostic—they tell you what happened and why. But the fourth step is therapeutic: it intervenes to fix the problem.

When the Production Manager arranged training programmes for existing workers and hired additional workers, he moved beyond analysis into action. This is the essence of taking corrective action. It involves:

• Identifying the root cause of the deviation (already done through investigation)
• Designing interventions that address that cause directly
• Implementing changes—whether in resources, processes, or personnel—to bring future performance back in line with standards

Training programmes upgrade the skill level of the existing workforce, while hiring brings in the numbers needed to meet production targets. Both are forward-looking corrections aimed at preventing the same shortfall in future months. …

The controlling process in management is a systematic cycle that helps organizations stay on track toward their goals. It begins with setting performance standards, moves through measurement and comparison, and culminates in action. Understanding where standard revision fits requires seeing the full arc of what happened at HG Air Conditioner.

The company started with a production schedule — a standard against which performance would be judged. When actual output fell short by a month, management didn't simply accept the gap. They measured the deviation, analyzed why it existed, and then took what seemed like logical corrective steps: training employees to improve skills, adding workers to increase capacity, assigning more equipment to boost throughput. These are classic corrective actions aimed at bringing performance back in line with the original standard.

But here's the critical insight: those measures failed. The targets still could not be met despite genuine effort and resource allocation. At this point, the Production Manager faced a fundamental question — was the problem with execution, or with the standard itself?

When corrective actions aimed at performance don't work, management must consider whether the standard was realistic in the first place. Perhaps market conditions changed, supply chain constraints emerged, or the original target was set without full information about production capacity. Revising the standard isn't about lowering expectations arbitrarily; it's about aligning the control system with reality so that future cycles of planning and control rest on achievable benchmarks.