Business Studies Part I
Business Studies Part II

Relationship between Planning & Controlling

Relationship between Planning and Controlling:

  • Planning without controlling is useless and controlling without planning is blind.
  • Planning provides the basis of controlling by setting the standards in advance. In the absence of these standards, managers will not know what all activities have to be controlled.
  • Planning is prescriptive in nature whereas, controlling is evaluative.
  • Thus, planning and controlling are interrelated and interdependent. As planning is based on facts, it makes controlling easier and effective whereas controlling helps to improve future planning by providing valuable information derived from the past experiences.

Both Rajeev and Sanjeev are correct in their statements as explained below:

  • Planning is considered as a forward looking function by Rajeev as plans are made for future.
  • Planning may be considered as a backward looking function by Sanjeev because the quality of planning can be improved with the help of valuable information provided by controlling in terms of results achieved.
  • Controlling is considered as a backward looking function by Rajeev as it is like the post mortem of the past activities to ascertain the deviations if any.

Controlling is considered as a forward looking function by Sanjeev as it helps to improve the future performance by providing guidance for taking corrective action so that deviations do not reoccur in future.

The relationship between controlling and planning is described below:
Planning and controlling are inseparable twins of management. Planning provides the basis for controlling. The desired standards are set in the process of planning in clear, specific and terms. In the process of controlling the actual performance is measured and compared with these standards and the deviations if any are identified and appropriate corrective action is taken. However, in the absence of any standards it would not be possible to gauge the actual performance. Thus, planning without controlling is meaningless and controlling without planning is blind.
Planning is prescriptive where as controlling is evaluative. Planning is an intellectual activity which is concerned with thinking, articulating and analyzing various alternative course of actions and prescribing the best possible alternative in order to achieve the desired goals efficiently and effectively. Controlling on the other hand is concerned with ensuring that events conform to plans. Thus, it involves monitoring and measuring the extent to which the desired goals have been realized.
Planning is looking ahead and controlling is looking back. Planning is futuristic in nature as it involves chalking out the future curse of action. It bridges the gap between where we are and where we want to go. Thus, it is deemed to be a forward looking function of management. Controlling on the other hand involves postmortem of the past activities to find out deviations from the standards. Therefore, controlling is said to be a backward looking function of management. However, on closer introspection we realize that the feedback provided through the process of planning in terms of revising the standards helps to improve future performances. Hence, like planning controlling is also forward looking function.

Planning precedes controlling and controlling succeeds planning. Thus, planning and controlling are interrelated and reinforce each other because:

  • Planning is based on facts and makes controlling process easier and adds to the effectiveness.
  • Controlling also adds to the effectiveness of planning process by providing valuable feedback based on past experiences.