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) Management Function: Controlling This section focuses on the management function of Controlling. Controlling involves observing current performance, comparing it to planned standards, identifying discrepancies, and implementing measures to rectify them to achieve organizational objectives. Case Excerpt: “Nishtha would take a weekly report from all the Restaurant Managers and take necessary action to resolve the problems, if any.”
This demonstrates her consistent review of actual performance across various restaurant units and her intervention when variances occurred, clearly illustrating the controlling function.
(ii) Controlling Step Employed by Nishtha: Analysing Deviations Nishtha's application of the controlling process is evident in the Analysing Deviations step. Upon receiving reports and noting a sales downturn at a particular restaurant, she did not overlook it. Instead, she inquired with the manager and initiated a deeper investigation. Case Excerpt: “So, Nishtha formed a team to find out the causes of the declining customers…”
This signifies her process of examining the difference between actual performance (falling customer numbers and sales) and the standard (expected consistent performance), aiming to pinpoint the root causes of these deviations. Analysing deviations is critical for identifying which variances demand immediate managerial attention (strategic deviations).
(iii) Next Step After Report Receipt: Taking Corrective Action Following Nishtha’s receipt of the team’s report, the subsequent logical stage in the controlling process is Taking Corrective Action. Based on the investigation team's findings, she will implement suitable strategies to address the reasons for declining customer numbers. Corrective actions could encompass improvements such as enhancing service quality, altering restaurant personnel, boosting marketing initiatives, upgrading hygiene standards, or revising the menu and pricing, contingent on the identified root causes. Prompt and effective corrective actions ensure the organization remains aligned with its planned objectives and bridges the gap between actual and anticipated performance.