The Importance Of Planning And Control In An Organisation
The basic aim of the study is to show the significance of planning and control in an organization (A case study of General Cotton Mill Ltd. Onitsha, Anambra State).However, all essential elements of the significance of planning and control in an organization will fully be considered.A cross sectional survey was used in the course of the study. This comprised of employees and customers of Cotton Mill Ltd., Onitsha, Anambra State. Purposive sampling was also used to select only respondents for the researcher to attain the purpose of the study.A sample size of 20 was used in this study. Data was collected using both primary and secondary sources. Primary sources included responses from Cotton Mill Ltd employees and customers through self administered questionnaires.Secondary sources included textbook, journals, newspapers and reports. For the purpose of this research work, the method used in analyzing data is chi-square test of independence. Findings indicated that the planning and control used in Cotton Mill Ltd were effective and satisfactory. Findings rhyme with studies by Coopers and Lybraud (1993) who argued that there was need to consider whether the following control objectives are met; management conveys the message that integrity and ethical cannot be compromised, the organization structure provides a moral framework for planning, directing, and controlling operations, management ensures that appropriate responsibility and delegation of authority is assigned to deal with goals and objectives and the Board of Directors and audit committee are sufficiently independent from management to construct a challenge to management decision and take an active role in ensuring that an appropriate “tone at the top exists”.
1.1 Background to the Study
Planning and control are put in place to keep organization on course towards profitability goals and achievement of its mission and to minimize surprise along the way. They enable management to deal with rapidly changing economic and competitive environment, shifting customer demands and priorities and restructuring for future growth. Planning is a management function that denotes .the process of thinking about and organizing the activities required to achieve desired goals. Control on the other hand promote efficiency, reduce risk of asset loss and help to ensure the reliability of financial statements and compliance with laws and regulations (Coso, 1992).
Planning and control is of great significant which is seen as an effective solution to variety of potential problems (Coso, 1992).
According to Chambers (1995), Cosserat (1999), Ridley and Chambers (1998) planning and controls are systems comprising of the control environment and control procedures. They further state that the planning and control systems includes all the predetermined objectives, policies and procedures adopted by the directors and management of an entity to assist in achieving their objective of efficient conduct of its business, including adherence to internal policies, the safeguarding of assets, the prevention and detection of fraud and error,, the accuracy and completion of the accounting records and timely preparation of reliable financial information. Successful organizations ensure that they attain and consolidate continued survival in a competitive environment (Drucker, 1999).
Thus, successful organization set performance measures that focus attention, identifies and communicate success which support organization leaning and provides a basis for assessment and reward (Brown, 1996).
Organizational performance is measured in terms of customer satisfaction, through reduced customer complaints (Kloot, 1999).
In order to be able to perform, organizations should critically look at customers and all stakeholders in business and know how best they are satisfying their needs. Kloot (1999) adds that organizations should continuously improve their services through assets accumulation, create value, improved quality services and flexibility, organizations operating activities is effective when control are built into the organization, infrastructure becoming part of the very essence of the organizations success in terms of continued improvement on performance standards as part of the competitive advantage of the organization.
1.2 Statement of the Research Problem
Despite the central role of planning and control in sustaining organizational performance, it is obvious that the system still fall short in the following, areas posses as the problem leading to the research work, which include the following:
- Can the effectiveness of planning and control in Cotton Mill Ltd be examined?
- Can the level of performance of cotton Mill Ltd be established?
- Can we establish a relationship between planning, and; control and performance in Cotton Mill Ltd?
1.3 Objectives of the Study
- To examine the effectiveness of planning and control used in Cotton Mill Ltd plc.
- To establish the level of performance in Cotton Mill Ltd plc.
- To establish a relationship between planning and control and performance in Cotton Mill Ltd plc.
1.4 Research Hypotheses
The following hypotheses were formulated for this research:
- That there is no effectiveness in planning and control in Cotton Mill Ltd.
- That the level of performance of Cotton Mill Ltdcannot be established.
- That there is no relationship between planning and control and performance in Cotton Mill Ltd.
1.5 Significance of the Study
- The study results will be useful to management, Board of directors, and all stakeholders of Cotton Mill Ltd, specifically they will use the findings from the study to redesign policies aimed at improving on the levels of performance.
- Findings will also be available for reference by academicians, researchers who seek to conduct further research under this study.
1.6 Scope and Limitations of the Study
In the process of conducting this research the study was confined on planning and control as an independent variable and the effectiveness will be measured base on control environment control activities, information and communication flow with the laws and regulations toward monitoring of operation and performance of Cotton Mill Ltd., Onitsha, Anambra State, Nigeria.
1.7 Scheme of Chapters
This project has been divided info five (5) chapters as follows:
- Chapter one focuses on the introductory aspect of the study comprising background to the study, statement of research problem, objective .of the study, research hypotheses, significance of the study, scope and limitation of the study, and scheme of chapters.
- Chapter two features the literature review which consist of, introduction, concept of planning and control, planning process, control system, components of control system, elements of control system, common weakness of control system, organizational performance, planning, control and organizational performance.
- Chapter three deals with the research methodology and means of data collection.
- Chapter four is based on data presentation and; data analysis. It also addresses and discusses findings.
- Chapter five highlights summary of the findings, proffer recommendation, and finally conclusions.
Summary, Conclusions and Recommendations of Findings
This chapter presents a summary of the study, the conclusions that are drawn from the findings and the recommendations appropriately.
Chapter one of this study contains the Introduction, background of planning and control on organizational performance. It also emphasis on the concept of planning and control on organizational performance on manufacturing industry which prudential guidelines means as – hazard experience by as a result of improper check on capital utilization. The statement- of problem deals with the company’s policy, toward’ hazard management, company’s resources/ facilities and employee’s performance and company’s asset safety and management. The main objective of the study is to examine the effectiveness of planning and control used in the company and to establish the level of performance in the company using any suitable techniques available. It also contains the significance of the study; the scope, of the study is limited to the areas only, and finally a hypothesis and chapter scheme.
Literature review of this study involves the reservoir if information existing in books, journals and articles as well as assertion written by various authors which have some relationship with our areas of study. It highlights several ways of planning and control to a bearable-limit as opine by Lambo (1987), Coso (1994). Teener (1993) Palmer (1993). Methodology employed by the research work to obtain the necessary data analyzing the data, was obtained from the secondary source which includes historical and record studying method. Chapter four deals with data analysis which was obtained during the course of the research work. It contains the interpretation of the discussion of the results as well as the testing of hypothesis. The last chapter five mainly summarizes the research work, present findings and conclusions, from which recommendations were made.
5.3 Findings and Conclusion.
- Findings indicated that the planning and control used in Cotton Mill Ltd were effective and satisfactory. Findings rhyme with studies by Coopers and Lybraud (1993) who argued that there was need to consider whether the following control objectives are met; management conveys the message that integrity and ethical cannot be compromised, the organization structure provides a moral framework for planning, directing, and controlling operations, management ensures that appropriate responsibility and delegation of authority is assigned to deal with goals and objectives and the Board of Directors and audit committee are sufficiently independent from management to construct a challenge to management decision and take an active role in ensuring that an appropriate “tone at the top exists”.
- The findings revealed a high level of organizational performance in Cotton Mill Ltd. Findings are in agreement with studies by Brown (1996) who argues that performance measures in organizations must focus, attention on what makes, identifies and communicates the drivers of success, support organizations learning and provide a basis for assessment and reward. Further more, Dixion (1990) adds that appropriate performance measures are those which enable organizations to direct their actions towards achieving their strategic objectives. This is because according to him a firm’s performance is central to the future well being and prosperity of any enterprise.
- The results in the table above indicate a significant positive relationship between controls and organizational performance of Cotton Mill Ltd (r = 0.618**, P value < 0.01), These findings, relate well with previous studies by Coso (1992) who provided a criteria against which effectiveness of planning and control can be assessed. He contends that internal control can be judged effective if the entity’s operations objectives are being achieved; published financial statements are being prepared, reliable and applicable ‘laws and regulations are being complied with. While planning and control is a process, its effectiveness is a state or condition of the process at a point in time.
Accordingly, the effective functioning of components of planning and control provides a reasonable assurance regarding achievement of one or more of the stated categories of objectives to ensure high levels of organizational performance. From the study findings, it is concluded that; the study findings indicated that the planning and control used in Cotton Mill Ltd were ‘effective and satisfactory, the level of organizational performance was found to be inadequate and a significant positive relationship between planning and control and organizational performance was established to exist.
- The management of Cotton Mill Ltd should design effective. planning and control systems by ensuring that adequate asset listings is done by management, capital assets purchased are approved by appropriate level of management and asset numbering is done to show location and protection of the assets.
- The management of Cotton Mill Ltd
should ensure that it strengthens strategies aimed .at improving organizational performance in all categories of staff and this should continuously be used to ensure that performance levels are satisfactory.
- The management of Cotton Mill Ltd should appreciate the findings in the relationship between planning and control and organizational performance to ensure its continued production in a competitive industry in Nigeria.
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