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Explain the Relationship Between Planning and Controlling - Business Studies

Explain the relationship between planning and controlling

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Solution

Controlling is closely related to planning. A good control system requires set standards for evaluation. These standards are provided by the plans defined by the organisation. In other
words, plans serve as the base for controlling.

Controlling is essential for effective implementation of plans. It is essential to keep a close watch on plans, identify any deviations and take appropriate corrective actions. Without proper controlling, planning would be futile.

In a similar manner, planning forms the base for controlling. Without planning, there would be nothing to control. Controlling is done only when there are predetermined standards against which evaluation can be performed.

While planning involves intellectual thinking, decision making and deciding a course of action, controlling ensures that plans take the required course of action. Both concepts of planning and controlling are interlinked as they are forward-looking and backwards-looking. Planning is a process wherein it is decided what is to be done and accordingly deciding the required course of action. In other words, planning involves deciding the goals and objectives which are to be achieved and deciding the actions through which they are to be achieved. In this way, planning helps in predicting future actions; thus, it can be said to be looking ahead.

As against planning, the controlling function involves assessing and evaluating past performance against pre-defined standards. Because controlling assesses past performance, it can be said to be backward looking.

However, it must be remembered that planning decides the goals and actions for the future, but these decisions are taken on the basis of experiences and previous controlling actions.
Thus, planning involves looking back as well.

In a similar manner, controlling not only involves assessing past performance but also decides corrective actions to be taken (in the future) and forms the base for plans. Thus, the controlling function looks forward as well.

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