Question

“Planning provides the basis for control”. Comment.

Answer 1

1. Meaning and Interrelationship: Planning involves setting objectives and deciding in advance the appropriate actions needed to achieve those objectives. It provides a roadmap for the future. Controlling is the process of monitoring and measuring actual performance against the planned objectives to ensure everything is on track.
2. Planning as a Precondition for Control: Planning sets the standards – goals and targets – which are necessary for the controlling function. Control compares actual performance with these planned standards. If there are deviations, corrective actions are taken. For example, if a company sets a production target of 10,000 units per month (planning), control ensures this target is being met and identifies reasons for any shortfall.
3. Feedback and Improvement: Control provides feedback on the effectiveness of planning. If the goals set during planning were unrealistic or the methods inefficient, control helps identify these flaws. This feedback loop helps in refining future plans, making the process dynamic and adaptive.
4. Ensuring Organizational Efficiency: Through planning, resources are allocated efficiently. Control ensures these resources are used as intended, preventing wastage and inefficiencies. For example, in budgeting (a planning tool), financial control ensures expenditures remain within the budget limits.
5. Real-World Implication: A well-known example is in manufacturing: production planning outlines what and how much to produce. Quality control and production control monitor that the output matches specifications and timelines. 

Answer 2

Planning establishes the benchmarks by which actual performance may be assessed and measured. It is easier to spot deviations and implement corrective measures to bring occurrences into line with plans when performance is compared to the intended outcome. Planning gives control purpose and efficacy. Without forethought, control is actually blind. Planning thus serves as the foundation for control.

An example can be used to further clarify this. A business has a plan to raise its sales turnover from about ₹ 50 crores to about ₹ 60 crores in the upcoming year. The company’s real sales turnover at the conclusion of the next year is estimated to be around ₹ 58 crores. The company’s management is interested in knowing if the performance is up to par. The management will be able to determine that performance falls short of the target with the aid of the plan, which is estimated to be around ₹ 60 crores. The management can now determine the causes of the deficit and take the necessary corrective action.