State the Relationship Between ‘Planning’ and ‘Controlling’ Functions of Management - Business Studies

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State the relationship between ‘planning’ and ‘controlling’ functions of management

Explain the relationship between controlling and planning functions of management.

Describe briefly the relationship between controlling and planning.

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Solution 1

Relationship between planning and controlling:

Planning and controlling are two complementary functions in the process of management. Planning is the process of providing an organisation with a concrete structure to deliberately achieve organisational goals and face challenges. Controlling, on the other hand, focuses on comparing targeted performance with actual performance and maintaining quality standards. Planning attempts to create benchmarks which thereafter are actually compared with actually achieved targets by controlling. Without planning, controlling cannot be undertaken as the standards of performance would be undetermined. Similarly, without controlling, planning serves no purpose at all because if the management does not look back to its plans to see whether it has achieved its goals or not, then the purpose of planning is not served at all. While formulating a plan, organisations should keep the performance measurement as a key to follow up the structure of the plan. This performance measurement is undertaken by controlling. Controlling primarily determines whether the purpose of a plan has been served or not. Both these steps ensure that the resources of the organisation are being used optimally and determine whether the organisation is performing according to its expectations or not. Hence, it can be concluded that both these functions complement each other. If an organisation eliminates any one of them, then its performance will suffer to a great extent.

Solution 2

Controlling is closely related to planning. A good control system requires set standards for valuation. 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 the 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 done.

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 the pre-defined standards. As 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 just involves assessing the past performance but also decides the corrective actions to be taken (in the future) and forms the base for plans. Thus, the controlling function looks forward as well.

Concept: Management Functions
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2015-2016 (March) Foreign Set 1

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