Planning without controlling is meaningless: If you don’t even know the desired level of sales to be achieved in the next month, what controls would you implement to ensure that your sales are on track? Obviously, you won’t be able to exercise effective controls on sales performance if targets are not set in advance.Ģ. If there are no plans, there can’t be a clear understanding of the desired level of performance, and without such understanding, controlling becomes ineffective. In other words, planning is an essential prerequisite for controlling. For example, the sales projection plan, which establishes sales targets for an entire year, becomes the benchmark against which actual sales are evaluated. Establishment of standards is the basis of control:Ĭontrols are formulated on the basis of plans, so the first step is to have clear plans, which then become the standards for controlling. The following points will give you a clear idea about the relationship between planning and controlling:ġ. Let us now understand the relationship between planning and controlling in detail: Thus, without control, it is almost impossible to track the performance of your plans, be they small or large. Just like this simple control, the annual budget of a department in a multinational company requires a far more robust system of control processes for having a check on its diverse activities.
It also makes each worker conscious of his late arrival and acts as a self-check on in and out time. This small control helps to keep a check on the time spent by workers in the factory and influences their wages/overtime for the complete month. And so is his evening time of departure recorded. To take a simple example, when a worker enters the factory in the morning, his time of entry is recorded manually or electronically through punch machines. If good controls are not formulated, you would not be able to measure the achievements in what you had planned to do. Controls give a means of checking the progress of the plans and help to correct any deviations that may occur along the way. Without a plan, there can be no control and in the absence of controls, the plans cannot be successfully implemented. What is the relationship between planning and controlling? Actual performance is compared with standards, deviations if any are identified and corrective actions are taken to improve the performance. It involves, deciding beforehand, what is to be done, how it is to be done, and who is to do it.Ĭontrolling, on the other hand, is a function of management that seeks to ensure that activities in an organization are performed as per the predetermined plans. It is one of the primary functions in business management. Planning is concerned with setting objectives and a course of action to achieve those objectives. In this blog, we have discussed the inter-relationship between planning & controlling. But the two are closely connected to each other.
Schermerhorn/Management, 7e Chapter 8, Figure 07-03
Schermerhorn/Management, 7e Chapter 8, Figure 07-01 Figure 8-1 The roles of planning and controlling in the management process.Figure:6.4:- Management Control database and processing support Database Inquiry Processing Decision models Problem analysis model Variance reporting Planning/budget models Requests inquiries problems Etc Plans and budgets Scheduled reports, Special reports Analyses decision for review inquiry responses Other Budgets, standards, plans.Files Transaction processing Operational control reports (b) Control reports Transaction output Transactions Files Transaction processing (a) Transaction Inquiry response Operational report processing Inquiry Files (c) Inquiry Processing Processing to support operational control.Schermerhorn/Management, 7e Chapter 8, Figure 07-05 Figure 8-5 Feedforward, concurrent, and feedback controls in the management process.Schermerhorn/Management, 7e Chapter 8, Figure 07-04 Figure 8-4 Four steps in management control.
#ELUCIDATE THE RELATIONSHIP BETWEEN PLANNING AND CONTROL HOW TO#
What is “Planning”? Planning is a process of… setting objectives and… determining how to accomplish them.
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