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Controlling — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesControlling6 Marks
Question
Describe the relationship between controlling and planning.
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Answer

Planning provides the goals or standards against which actual performance is measured. By comparing actual performance with some standard, managers can know whether they have actually been able to attain the goals. If there is any deviation it can be corrected. Therefore, we can say that planning is a prerequisite for controlling. The nature of corrective action required depends upon the extent of deviations from the standard. Therefore, planning provides the basis of control.Controlling means ensuring that activities in an organisation are performed as per the plans. Controlling also ensures that an organisation’s resources are being used effectively and efficiently for the achievement of predetermined goals. Controlling is, thus, a goal-oriented function.
Relationship between planning and controlling:
  1. Controlling takes place on the basis of standards developed by planning because if the standards are not set in advance, managers have nothing to control.
  2. Planning without controlling is meaningless because once a plan becomes operational, controlling ensures that events conform to the plans.
  3. Planning is prescriptive whereas controlling is evaluative because planning prescribes an appropriate course of action while controlling evaluates whether decisions have been translated into desired actions.
  4. Planning and controlling both are forward looking because while plans are prepared for the future, controlling seeks to improve the future on the basis of the past experience.
  5. Planning and controlling are both looking back because, while planning is guided by past experiences, controlling compares the actual performance with the standards.

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