Planning as a Managerial Function - Essay Example

? Role of Planning Introduction Managerial task has always been associated with unpredictability and complexity even though it has massive opportunities for an organisation. In characterising the works of managers, their activities would be reflected in terms of the four basic functions of management: planning, leading, controlling and organising. Other scholars have also included staffing, decision making, execution and coordination as other managerial functions (DuBrin 2009; Sims 2002). Despite being often described sequentially, managers employ them simultaneously. Of importance in this paper would be planning as a managerial function, defined by Griffin and Moorhead (2010) as the process in which organisations determine the desired future position and thereafter decide on how best to attain that position. Managers as planners would be charged with the duty of establishing the organisation’s objectives and determining what needs to be achieved and setting the timelines. This calls for sensitivity to the environment of operation and appropriate decision making skills. While this function would be handled by top management in large corporate organisations, owners handle it in smaller firms. Discussion To explain this managerial function, Xerox Corporation provides an appropriate example. The history of this copier and printing equipment firm dates back to the 1930s with the first xerographic image being made in the US. The firm grew over years by merging with other similar firms with the 1960s marking the climax of its growth. Between 1960 and 1965, the corporation’s revenues grew from $37 million to $268 million (Dragolea & Cotirlea 2009). In the 1980s, the firm faced intense competition from its competitors from Japan and the US with its market share dropping from 86% to 17% between 1974 and 1984. This was largely attributed to the lack of strategic direction from the management. In order to return to profitability, the management sought to understand the operations of its rivals so as to adopt some of the best practices. The firm sought to implement competitive benchmarking after the study which was found to be ineffective because most of the copier companies in the market did not use most of those recommended operations. As such, through studying a supplier of outdoor clothing and sporting products, L. L. Bean, the firm implemented functional benchmarking. This saw the company spring back with customer satisfaction for Xerox’s printing copier systems rising by 39% and 38% respectively. Customer complaints were cut by over 60% with sales process recording 40% improvement. This success was a result of effectively planned turn-around strategy. Indeed, Xerox identified its weaknesses which made it uncompetitive in the market shared with its US and Japanese rivals. Its market share had greatly dropped and it therefore sought to recapture its status as a market leader in copier business. With this vision in mind, the next task for the chief executive, David Kearns was to determine how to get to that position as suggested by scholars defining planning (DuBrin 2009; Sims 2002). The chief executive crafted a program referred to as Leadership Through Quality that would see the firm mine information on what makes its rivals more effective and how they would adopt some of the identified best practices. Data on the operations of Xerox’s rivals was collected through mining information from relevant databases, trade journals and magazines, use of questionnaires and engagement of consultants (Dragolea & Cotirlea 2009). This was followed by a well planned strategy to see the firm regain its quality leadership in the market. Analysis According to DuBrin (2009), planning could be said to be either strategic or operational. The author differentiates strategic planning as top level management engagement with the input of other members of an organisation from operational planning as one that relates to everyday operations of a unit or the whole organisation. The planning that saw Xerox recover from its loss making period best fits the description of strategic planning. The role of planning that saw the top management at Xerox decide to restructure business operations sought to bring back Xerox to profitability and competitiveness in the market. Dragolea and Cotirlea quote the firm’s chief executive noting that “our goal is always to achieve superiority in quality, product reliability and cost” (2009, p.821). This goal would help the firm tackle the external environment, particularly its US and Japanese competitors. Strategic planning encompasses analysis of the company’s mission and vision which guides on identification of the goals that guides activities to be undertaken. Similarly, a strategic plan could play an important role in helping a firm troubleshoot its outstanding issues and appropriately respond to changes. Therefore, the planning led to development of corporate policies which yielded the Leadership Through Quality program. This benchmarking program aimed at measuring its services and the nature of its products against the toughest of its competitors and then identifies the gaps that exist and establish the appropriate goals. The firm thus came up with a five-step model that would see it achieve its objectives. In line with the basic scientific approach, the process involved planning, analysis, integration, action then maturity (Dragolea & Cotirlea 2009). To collect information on its rivals, the firm subscribed to technical and management databases, mined information from trade journals and magazines and further consulted consulting firms and professional associations. 55,000 questionnaires were sent to its customers on a monthly basis that gave feedback on their satisfaction and competitor’s performance. This was a long term process, characteristic of strategic planning (DuBrin 2009). The benefits that a firm reaps from planning could be vast and would include ensuring more productivity and adaptability to future eventualities (Griffin & Moorhead 2010). The changes in the business environment requires constant evaluation of the market to ensure that the business adopts strategies that would enable it attain a sustainable competitive advantage. Following the successful planning at Xerox, the company posted a 40% improvement in its sales processes with service processes and administrative processes improving by 18% and 21% respectively. By 1991, the ratings for customer satisfaction stood at 90% and became the leading firm in volume in the copier-duplicator market segment. It became the sole company that won three of the most prestigious quality awards including the European Quality Award, Malcolm Baldridge National Quality Award and the Deming Award (Dragolea & Cotirlea 2009). But planning could also have its drawbacks an example which includes involvement in an intensive planning activity that ends up being of little or no help to the organisation (Griffin & Moorhead 2010). Indeed, Xerox faced these drawbacks despite its realistic planning process. After analysing its competitors and understanding their operations, Xerox sought to implement the changes that deemed appropriate for achievement of its goals. However, after spending massive resources in understanding the operations of its toughest rivals, the firm realised that some of what it intended to implement through competitive benchmarking was not practiced by copier companies. Therefore, it ended up with some useless recommendations meaning a loss making venture for the firm. Despite this, the company restructured the recommendation by injecting further resources to study how a supplier of outdoor clothing and sporting goods, L. L. Bean operated its inventory management and warehousing system. This was aimed at reducing the inconvenience of having to fill in individual order forms thus increase both the speed and accuracy in order filling (Dragolea & Cotirlea 2009). The firm thus shelved its previous competitive benchmarking plan and adopted the new plan of functional benchmarking, despite the cost. On the other hand, this limitation points out to the flexibility of the planning process at Xerox which supports the flexibility of planning argument by Sims (2002). These achievements enabled Xerox to regain competitiveness in the market. Conclusion Basically, planning involves identifying an organisation’s mission and vision that guides on the goals which would initiate the development of a process to achieve these goals. Being a managerial task, it could either be a long term strategic planning or day-to-day operational planning. The management at Xerox Corporation, a copier-duplicator manufacturer was faced with the task of identifying how to regain its profitability after massive competition from its rivals from Japan and the US rendered its products costly in the market. With the goal of achieving superiority in reliability, quality and cost, the company sought to evaluate and understand the operations of its toughest rivals that made them superior in the market. This led Xerox’s chief executive to formulate the Leadership Through Quality program that saw the company, through functional benchmarking, successfully implement an effective plan amidst some challenges. The case of Xerox points out the roles of planning, including development of effective policies, troubleshooting issues and responding to changes, which give benefits such as helping the company to remain competitive in its industry, increasing its adaptability to the current and future market eventualities and more productive employment of the resources of the company. Recommendation The planning function of management stands out as a formalised and systematic approach to meeting the other management functions. Planning plays an important role in crystallising the objectives of an organisation. The benefits resulting from an effective planning process could be massive and would assist the firm gain a competitive edge over its rivals in the market. It would thus be appropriate for an organisation to undertake the appropriate steps in making planning its activities. Organisations should have effective visions that would appropriately guide them to achieving their goals. The planning process should be continuous due to constant changes in the market, flexible and realistic. It should be done following the basic scientific principles involving investigation, analysis then systematic decision making. To make it effective, all the levels of management and employees at large should be involved in the process. References Dragolea, L & Cotirlea, D 2009, ‘Benchmarking – a valid strategy for the long term?’ Annales Universitatis Apulensis Series Oeconomica, vol. 11, no. 2, pp. 813 – 827. DuBrin, AJ 2009, Essentials of management, 8th edn, South-Western Cengage Learning, Mason, OH. Griffin, RW & Moorhead, G 2010, Organisational behaviour: managing people and organisations, 9th edn, South-Western Cengage Learning, Mason, OH. Sims, RR 2002, Managing organisational behaviour, Greenwood Publishing Group, Inc., Westport, CT. Read More

 

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