CHAPTER ONE

GENERAL INTRODUCTION

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…