One who truly understands the relationship between planning and controlling is certain to move up the ranks in management of any sort. An individual who holds a management role in an organisation needs to employ various strategies and think conceptually to achieve company goals and objectives.
In this lesson, before we discuss the differences between planning and controlling, we need to learn about the important functions of management and their applications.
What do you Mean by the Functions of Management?
The primary functions of management have the following features –
They all relate to each other in multiple ways.
All of them need to be given equal importance to attain organisational success.
Each of the functions possesses different objectives which make them unique
There are several functions of management, which are Planning, Controlling, Organising, Staffing and Directing. These are the primary functions of any management department of a firm, company or enterprise.
From a layman’s perspective, only the final two are visible, but for every managerial action, all the other functions associated with it carry equal importance. An ideal manager gives adequate effort in planning and organising so that he or she is able to carry out the directing and controlling functions effectively.
What is Planning?
Planning can be defined as a basic function of management. It concerns chalking out a course of action which will be effective in the future and making decisions with respect to such an action. Planning is nothing but deciding in advance –
What (task) to do?
When to do it?
And how to do that task?
Planning helps in bridging the gap between our current situation involving a specific task and the situation we want to be in involving the same given task.
Test your knowledge
Before we carry on this topic, clear your fundamental ideas regarding functions of management with the help of this Q&A –
1. What is a Plan?
Ans. A plan can be defined as a future course of action taken to meet a certain requirement or objective. It can also be expressed as an exercise in solving issues and making appropriate decisions.
2. What is the Difference Between Plan and Planning?
Ans. Plan and Planning can be differentiated with these following parameters –
Planning can be denoted as an on-going procedure whereas a plan is the documentation of that particular process. So, planning is an active process, while a plan is a static element in management.
Plans are required to be updated while planning does not require that since it is a continuous process.
A plan has a fixed objective and states the actions to reach the objective by executing the necessary tasks. In contrast, even though planning is essential to finish the task, it may or may not have a 100% success rate.
Hence, even though plan and planning may seem similar to many, in the field of commerce and management, each has unique features.
3. What is the Difference Between Project and Planning?
Ans. Planning is a series of steps taken for a detailed course of action for achieving a particular end-result. It is active and continuous in nature and may undergo multiple alterations and updates along the way.
Meanwhile, a project comprises a set of individual tasks which are aimed at a particular output. A project is usually short-term compared to planning and is well-defined with a few risks which can be managed with reasonable effort.
Features of Planning
From the above relationships, we can gain a fair idea about the characteristic features of planning, which are –
It is the primary function of management.
It is a systematic way of thinking for accomplishment of pre-determined objectives.
It is essential in ensuring appropriate utilisation of resources.
It is also an activity which includes avoiding risks, confusions, wasted efforts, unpredictability, etc.
Planning offers direction and motive to the executors of a plan, which for a company are the associated employees, managers, etc.
For any task, planning also helps in distinguishing future threats.
For example, a manager is chalking out the annual budget of his or her company. For this purpose, a budgeting process is required, which involves various steps of planning and verification of the said plans.
In managerial terms, both budgeting and planning are focused on the financial health of a company. This is considered as one of the most vital similarities between planning and budgeting.
What is Controlling?
In the cycle of managerial functions as illustrated above, controlling holds the final step. It implies not only measurement but also accomplishment against the planned process or deviated process (if any) to ensure achievement of company goals and objectives.
In simpler terms, it is the measurement and correction of multiple activities as per the plan in reaching the specified milestone. In order to ensure that the objective will be attained, a controlling process consists of these steps –
Establishment of a standard performance of all activities involved
Measurement of performance of those activities
Comparison between the above two
So, it is quite clear that the relationship between controlling and planning is where the foundations of the functions of management lie.
For example, controlling as a function of management can be best explained by detailing the differences between management accounting and cost accounting ppt. Cost accounting is a branch of accounting which involves controlling operations to generate maximum profit, whereas management accounting requires adept planning and decision-making.
Difference Between Planning and Controlling
The above example can also be used to differentiate between controlling and planning. Planning is looking ahead and controlling is looking back and commenting on the said plan. Consult the figure below for a simpler explanation –
At Vedantu, we hope that this discussion on differences between planning and controlling will be able to help you in the upcoming exams. Make sure to visit our website and download our mobile app to know more about other topics in the commerce curriculum!
1. What is the Meaning of Planning?
Ans. Planning means chalking out a course of actions to meet a certain goal.
2. What is the Meaning of Controlling?
Ans. Controlling means looking back at the planning of a certain process and making necessary alterations to meet the goal.
3. What is the Similarity Between Planning and Controlling?
Ans. Both planning and controlling fall under the essential functions of management.