Types of Management Planning: TYCO - Case Study Example

Running Head Management Planning Paper Management Planning Paper TYCO is one of the companies operating on a global scale. Planning function of management is vital for this company because it ensures its profitability and effective performance of all departments. One of the dominant characteristics of the planning in this organization is its tremendous emphasis on the external environment. It is demand forecasts, economic conditions, industry trends, population trends, style trends, technological developments, and so forth. Tyco’s planners tend to look on these factors as "givens" in the strategic problems they try to solve, forgetting that able, purposeful people can change the external environment by the actions and programs they undertake. Tyco’s management states: ‘implement initiatives across our business segments to achieve best-in-class operating practices and leverage company-wide opportunities, utilizing six sigma measurements” (Tyco Home Page 2007). In planning, a good part of "the business" is the link between programs and people, between procedures on paper and operations in reality, between planned goals and the proven abilities and desires of the human organization. Unless these links are made carefully, thoughtfully, and realistically, all the numbers, ratios, projections, criteria, alternative programs, simulations, and schedules are of little value. According to Carroll (1993): “Planning is a process that entails an assessment of the organization, its resources, and its environment, and encompasses the setting of objectives. Using that assessment as a backdrop, Planning entails looking at the past, the present, and the future” (p. 32). In Tyco, planning is influenced by legal and ethical issues, and is bounded by corporate social responsibility. The economic responsibilities of corporations have been defined in many ways. In Tyco, the economic responsibility of the firm is defined by the overriding goal. Corporate overriding goal is maximum returns to investors. As long as a corporation works toward achieving this goal, it is deemed economically responsible. The overriding goal of the corporation is to maximize shareholders profits. In the majority of instances, maximizing investors returns would lead to maximum profits, and vice versa. Tyco’s executives and management respond to a number of other objectives, factors, and constraints, and must do so in the context of what he calls "bounded rationality," they actually seek to reach a mere satisfactory level of profit. Whether maximization or satisfying, economic responsibility proponents believe that the number one responsibility of businesses is, first, its shareholders, and then other constituents (Corporate Responsibility Index 2007). The main principles of social corporate responsibility are integrity, excellence, teamwork and accountability. Tyco states: “We must demand of ourselves and of each other the highest standards of individual and corporate integrity. We safeguard company assets. We comply with all company policies and laws” (Tyco Home Page 2007). This principles influence planning function of management and determine strategic development of the company.. Ethical issues influence decision making and company’s orientation. In planning, tyco pays a special attention to the role of business in society and what obligation business has to society. Tyco is not only concerned about the role of the corporation as a social entity but even more concerned about how the corporate revolution has transformed social life. In this case, Tyco is “driven by a strategy focusing resources on issues and opportunities where Tyco can have an impact – Health, Education and Environmental Sustainability.” (Tyco Home Page 2007). Charity and philanthropy are the main activities aimed to support a global community (Robbins, 2002). Legal issues influence direction and methods of Tyco’s management. Tyco pays a special attention to workforce diversity and equality of employment, workplace safety, harassment matters and substance abuse. In order to ensure high quality of products and services provided by the company, it eliminates negative behavior patterns and possible violence at the workplace. For instance, the company supposes that: ”its employees, customers and shareholders benefit from a workplace free of alcohol and drug abuse” (Tyco Home Page 2007). In this case planning function of management is bounded by legal rules and industry regulations, ethical guidelines and duties. The planning function is based on the idea that social obligation means that the corporation engages in socially responsible behavior when it pursues a profit within the constraints of law as imposed by society. Thus legal behavior in pursuit of profit is a socially responsible behavior, and any behavior not legal is socially irresponsible. In order to meet legal, ethical and social corporate responsibility issues, Tyco takes into account corporate and social interests of its stakeholders. The planning function of management is based on the notion that managers have the responsibility to manage the corporation in a way that would maximize owners interests. Socially responsible projects such as social improvement programs are determined by law and left to the contributions of private individuals. For instance, Tyco has introduced a supplier diversity programs aimed to “sustain competitive advantage in the markets by integrating minority, woman, veteran owned, disable-owned and HUBZone businesses into strategic sourcing process” (Tyco Home Page 2007). Also, Tyco contributes in this regard by paying taxes to the government that rightfully determines how they should be allocated. Tyco tries to meet societys expectations and goes beyond the provision of goods and services. It is accountable for the ecological, environmental, and social costs incurred; it reacts and contributes to solving societys problems. This interpretation seeks to separate corporate actions that are required by economic or legal imperative and those that are initiated voluntarily. Whether corporate actions are voluntary or involuntary, a broader interpretation of the social action view identifies as socially responsible those actions that go beyond the law. Typically, these actions are reactions to the expectations of specific corporate constituents, shareholders, social activists, unions, and so on (Corporate Responsibility Index 2007). External and internal environments have a vital role and impact on strategic, tactical, operational and contingency planning. Strategic planning is determined by fierce competition, market demands and industry’s rules and regulations. Tyco’s plans become a tightly organized set of specific tasks that put carefully selected strategies into action to accomplish stated objectives that represent organization goals that enable an organization to achieve its mission. The strategy for the campaign included the development of a multiyear plans focusing on increasing knowledge which can be the most powerful deterrent and source of help (Project Planning 2007). Tactical planning is determined by marketing goals, positioning of the company and budgets. This planning includes securing cooperative funding sources to sustain the campaign; to maintain high visibility through the use of public relations and media relations activities throughout the campaign; and to coordinate all campaign activities to ensure a successful launch. These strategies can be interpreted as ideas for guidance instead of a list of actions to implement. They are, in fact, counterparts to goals, which are ideas about campaign results. For Tyco, tactics means tasks that must be accomplished to achieve a stated objective (Robbins 2002). Operational planning is influenced by communication, effective team work and technology. Communication has a great impact on planning because it determines who needs to know something, what they need to know, and how best to interact with them. Effective team work and group communication ensures effective performance and coordination, it determines who will take responsibility for designated tasks, and how to work together as departments, individuals, or organizations to accomplish a plan (Tyco Home Page 2007). Technology helps to simplify every day activities and improve communication Contingency planning is determined by economic and legal uncertainty, natural disasters and technology breakdown. This planning helps Tyco develop strategies focused on the main threats and weaknesses that require the cooperation of a wide spectrum of individuals from organizations with various agendas and perspectives. Contingency planning embodies all of the essential elements of planning, from the development of the situation analysis at the beginning of the campaign to the demonstration of accountability at the end of the campaign (Tyco Home Page 2007). The use of careful research and a clear plan ensured that every campaign tactic fulfilled a necessary strategy and that every strategy responded to a desired objective. The aim of this planning to consider what elements Tyco can control and what elements it cannot control (Project Planning 2007) In sum, Tyco’s planning function of management is influenced and determined by legal and ethical rules, internal and external business factors. Careful analysis of these issues and regulations can help the strategic manager develop the understanding necessary to design and maintain successful programs and goals. References 1. Carroll, A.B. (1993). Three Types of Management Planning: Making Organizations Work. Management Quarterly, 34 (1), 32. 2. Corporate Responsibility Index (2007). Retrieved 22 August 2007, from http://www.corporate-responsibility.com.au/about/corporate_social_responsibility/what_is_csr.asp 3. Project Planning and Management Tools (2007). Retrieved 22 August 2007 http://www.mindtools.com/pages/main/newMN_PPM.htm 4. Robbins, S. (2002). Organizational Behavior. Pearson Higher. 5. Tyco Home Page (2007). Retrieved 22 August 2007, from www.tyco.com Read More