Review Questions

1. In what way can budget be used as control tool?

Controlling is process of observing things and correcting activities if there is a

deviation. In this case, budget can be used as a control in the way that it is the one that
holds the company. All the actions that people performed inside the company is under
control of budget. All of the movements are still depends on the budget. When there is a
deviation, budget is still involved. In order for us to make those deviations be fixed, we
badly need budgeting because it is the one that It is the one that makes the company
keep going. Aside from that, budget is where we are able to measure the liquidity of a
company.

2. Why are many managers reluctant to take the actions necessary to correct the
deviations?

Many managers are reluctant in taking the actions necessary to correct some
deviations because no one of us knows what will might happen next. No of us can
predict the future. Mangers are not easily convinced when it comes to taking actions
which regards to correcting aberrations because they are afraid to its effect and
outcome. There is a possibility that even if the actions that are going to take is for the
improvement of activities inside the company, these things may also lead to more
complex problem. The managers taught that what if this way is not the right path of
success? What if, without knowing, the actions which they prefer to be the solution of
such different issues may drag them more to down.

3. Since quality is a relative concept, how does a manager ever know if the quality is
optimum?
 A manager will notice if the quality level of action reach its effectiveness if its
result is completely positive. If the manager become successful in correcting deviations,
then, the strategies he/she used to control it is highly acceptable. Every actions we take
in life can only be measure through evaluating its outcome and result. The quality of the
concept is said to be optimum if these suddenly reaches its goal In the end, after
applying the concept, its result should help in order to take place again activities in its
original plan. The negative reactions before will now turn into positive one.

4. If you were implementing a new control system designed to check more closely the
expenses of your sales people, what actions might you take in order to minimize
negative reactions?

If I will be implementing a new control system to check more closely the

expenses of the sales people inside the company, I will just give equal amount of
money to each and every department which they should only spent for a specific span
of time. I want my people to practice how to spent the amount of budget that I will give
to them in a good way. I prefer to implement this kind of control system so that negative
reactions will be lessen. These negative reactions contain the possibility of using the
employee the chance to spent more and more budget as long as they can and they
want which may possibly bring to liquidity of the company. Not all the employees are
said to be trustworthy one.