Planning looks ahead, controlling looks back: the relationship between planning and controlling

Planning and controlling

Planning is deciding in advance what is to be done, how, when and by whom; it sets objectives and the means to reach them. Controlling is ensuring that actual performance conforms to plans, by setting standards, measuring performance, comparing it with standards and correcting deviations. They open and close each round of the management cycle.

Meaning of the statement

• Planning is looking ahead because it is concerned with the future: it forecasts conditions, sets goals and decides courses of action for coming periods.
• Controlling is looking back because it evaluates what has already been done: it checks results already achieved against the standards to find the gaps.

Why the statement needs qualifying

1. Not all control comes after the event. Feedforward control anticipates problems before they occur (for example checking the quality of raw materials before production), and concurrent control corrects work while it is in progress. Budgets and schedules are themselves both plans and control standards.
2. Even after-the-event control is for what comes next. Nobody measures a shortfall just to record it: the point is to act on it, so the correction changes the coming months and often the next plan as well.
3. A plan is built from yesterday's results. Next year's targets start from this year's sales, costs and problems, which are exactly the figures the control system collected.

Each function therefore faces both ways: planning uses the past to shape the future, and controlling examines the past in order to change the future.

Interdependence of planning and controlling

1. Planning is the basis of control. Plans provide the standards against which performance is measured; without plans, there is nothing to control.
2. Control makes planning effective. Without control, plans remain intentions; control ensures they are carried out.
3. Control provides feedback for planning. Information from control shows what was achieved and why, improving the next round of planning.
4. Both are continuous and form a single cycle: plan → act → control → re-plan.
5. Common tools. Budgets, schedules, MBO targets and standards serve both functions.
6. Both are pervasive and are performed by every manager.

Example. A retailer plans next quarter's sales on the basis of last year's data (planning uses the past). During the quarter it tracks weekly sales against targets (concurrent control); a shortfall in one region leads to a promotion and to a lower target for that region in the next plan (control shaping the future).

Conclusion

The statement is a useful shorthand but not the whole truth. A plan that nobody checks drifts, and a check with no plan behind it has no yardstick; the two work as one cycle in which each looks both backward and forward.