The Importance of Planning, Organizing, and Controlling in an Organization - Literature review Example

The importance of planning, organizing and controlling in an organisation It is obvious that planning, organising, and controlling is important in any enterprise, but in order to do those things successfully, it is important to understand why they are important. A simple definition of planning is “identifying and employing present means to achieve a future goal or objective” (Benowitz, 2001, pp. 47-48). Planning and strategy are often thought of as the same thing; for example, from a survey of marketing managers, Morris and Pitt (1993, p. 44) combined responses from the survey to define strategy as “a plan to maximize the probability of capturing targeted business through manipulation of controllable factors such as product design, advertising, cost control, and market knowledge.” That definition seems to say that strategy is a combination of different plans; product design would have a plan, advertising would have a plan, cost control would have a plan, and the organisation would need a plan about how to gain the market knowledge it needs. Porter (1987, p. 43) describes this as being two different forms of strategy: Competitive strategy, which is the strategy of each of the organisation’s parts, and corporate strategy, which is the overall strategy that binds the competitive strategies together into something which will give the organisation as a whole a competitive advantage. The “mission” and “vision” of an organisation could be considered an expression of the organisation’s overall strategy, what Porter calls the corporate strategy. The competitive strategies of individual parts of the enterprise are more narrowly-focused and apply to shorter periods of time, and are used to carry out the corporate strategy (French, Kelly & Harrison, 2004, pp. 767, 774). So the importance of planning is that it is the means by which the activities of the individual parts of the business which support the corporate strategy are identified. The importance of organising is that it is the means by which the separate activities are managed, so that things are done in the right sequence and in the right amount in order to fulfil the plan and meet the strategic objectives. Controlling, of course, is the necessary activity of monitoring the implementation of the plan, and making changes to correct operations if they are not performing according to the plan or if market circumstances require a change. Controlling is probably the most challenging of the three concepts, because it can be difficult to correctly identify why results are not meeting expectations (French, et al., 2004); the fault could lie in the overall strategy, in the planning, in the performance of people in the organisation, or in external conditions that have not been anticipated or interpreted correctly. Identifying the problem and then deciding on the proper fix for it also requires assessing how it will affect other parts of the plan. By developing a sound strategy first and then organising the enterprise according to the correct plan helps to make the organisation flexible to implement changes later if needed (French, et al., 2004). The importance of team management and communication in achieving organisational goals Team management and communication suggest two important concepts that should be considered in effectively managing an organisation to achieve its goals: Motivation of workers in the organisation, and conflict in the work group. A large part of motivation is intrinsic motivation, mostly internalised, emotional benefits the worker receives from his job; employees who have a high degree of intrinsic motivation are described as “engaged employees”: emotionally-involved, enthusiastic, optimistic, and satisfied with their work (Medlin & Green, 2009, p. 944; Whittington & Galpin, 2010). Things that support employee engagement are specific and challenging performance measures, variety in job duties, and some other factors that relate directly to the employee’s role in the organisation and in a work team: clear contribution of his work to the organisation’s goals, reliable communications pathways between the worker and management, and overall trust that the organisation values the employee (Whittington & Galpin, 2010, p. 16). Unless the enterprise consists of just one person, however, there is a risk – a likelihood, really – that some conflict between people in the group will arise. Differences in personalities, miscommunications between people such as information being misinterpreted or not transmitted properly, and differences in personal or job goals and objectives can all cause conflicts. The conflicts occur because different interests – needs and desires of different people – lead to opposing positions and demands (Rahim, Garrett & Buntzman, 1992). Conflict cannot always be prevented, and in some respects, it can be helpful; from disagreements between people, new ideas can sometimes be revealed. The goal of the manager should not necessarily be to always prevent conflict, but to manage it (Rahim, 2001). People react to conflict by avoiding it, by competing with one another, by making accommodations, by compromising, or by collaborating (Rahim, et al., 1992). Of these natural reactions, compromise and collaboration are the most productive, because they lead to solutions that have the most acceptable possible resolutions for all concerned. In order to achieve a consensus, good communications skills are needed to make sure there is a balance of views in the conflict resolution – not only drawing out those who do not share their positions at first (i.e., the ones whose reaction is to avoid the conflict), but making sure some views do not dominate the entire dispute (Fogler & LeBlanc, 2008, p. 29). From the point of view of the organisation – either the entire enterprise, or the team in which the conflict takes place – a consensus is the best result because all members of the group share an interest in the resolution. In other words, the function of the group as a unit made up of separate individuals continues; in a ‘normal’, non-conflict situation the group would not function correctly if one member was not doing his part, so the same would be true in resolving a conflict. Thus, this should be the priority of the manager: maintaining good team communication and management in all circumstances, because conflicts are unavoidable. How ethical behaviour and social responsibility contribute to the effectiveness of management The simple answer to how ethical behaviour and social responsibility contribute to the effectiveness of management is that any manager is unlikely to be able to maintain an ethically- and socially-responsible perspective on how his organisation should relate to its external environment, while at the same time taking a different perspective towards the internal environment of the organisation and its people. Corporate social responsibility is defined as “a collection of concepts that describe how managers should handle public policy and social issues” (Windsor, 2006, p. 93), which if taken at face value includes not only the external environment of the organisation but also the internal environment. For example, good environmental practises are a public policy issue because the organisation presumably does not want to damage the environment for its community. They are also a social issue, because the company’s environmental practises have to be carried out by its people; in doing this part of their jobs, they are being educated about sound environmental practises, and adopting a positive environmental perspective as personal habits. Likewise, fair employment practises, such as avoiding discrimination, preventing sexual harassment, providing a safe and healthy work environment, and maintaining fair and productive employment policies in other respects is also a public policy issue, and probably a legal requirement. By the same token, it is also an internal social issue because of the intrinsic motivation factor discussed in the previous section; employees can be confident that they will be treated fairly and given a good environment in which to work, which supports morale and employee satisfaction. One problem, however, is that ethical responsibility and economic responsibility – that is, the goal every organisation has to be profitable and benefit its stakeholders – are in many ways competing objectives (Windsor, 2006, pp. 93-94); maximising ethical performance does not always benefit economic performance, and vice versa. Therefore, the manager must balance ethical behaviour and social responsibility with economic objectives. This is an area in which planning, as discussed in the first section, is critical to the organisation. In order to satisfy the requirement for economic performance, the ethical performance must in some way support it; otherwise, economic benefits are sacrificed for social responsibility, and the organisation’s stakeholders could quite rightly question why the firm is in business in the first place. Of course, much of the time the balance between ethical and economic priorities is very simple; for instance, a firm that pollutes the environment or mistreats its workers will have a poor reputation and lose customers, so the solution in planning is rather obvious. Other times the choice may not be so clear. For example, a firm may decide to upgrade some equipment to newer, more expensive machinery that requires significant retraining of the workers who operate it, but in the long run will lower energy costs. The manager with a good ethical and social responsibility perspective – and who can also communicate well, as discussed in the previous section – will be able to ‘bring the workforce and stakeholders on board’ with the decision even though it will cost more in money and effort in the short term, because he can explain the long term benefits of increasing worker skills and knowledge, lowering energy costs, and reducing environmental impact. If the manager is also planning well, he can develop a way in which the decision can be marketed as an advantage over the firm’s competitors, using the positive social impacts to boost economic performance. Effective leadership is important for organisational success In much of the academic literature about management and leadership, “leadership” is defined as something different than management. For example, Alvesson and Sveningsson (2003, p. 1439) define leadership as attributes or activities that can produce change and inspire innovation and new ideas; leaders have the qualities of ‘passion,’ ‘creativity,’ ‘vision,’ and are ‘inspiring,’ while managers are ‘rational,’ ‘analytical,’ and ‘structured’. The whole point of Alvesson’s and Sveningsson’s work is that ordinary tasks and regular management functions, such as simple communications with others, somehow become special when they are done by someone who is perceived to be “a leader” (Alvesson & Sveningsson, 2003). In classical management theory, however, such as the work of Adam Smith or Henri Fayol, ‘leadership’ is considered a part of, or a consequence of management functions, in the context of management being the work of identifying, developing, and supporting human resources so that their contributions help to move the organisation towards a common goal (Pearson & Parker, 2008, pp. 46-47). In other words, if the job of management is properly done, the manager’s results serve as evidence that he is “a leader.” Certain ‘leadership traits’ can make some managers better than others, but only if those traits are correctly applied in relevant circumstances (Kirkpatrick & Locke, 1991, p. 49). Leadership seems to be where the other concepts discussed in the sections above all come together: planning, organisation, controlling, managing teams and communication, and maintaining ethical and socially-responsible perspectives. The classic definition of management applies here. Planning is the first step, where the common goal of the organisation is identified, and where the human and other resources needed to carry it out are also determined. Organising involves developing those resources, in terms of planning at lower levels, and organising how and in what order the different parts of the organisation will work together. Supporting the human resources involves providing the people with a good work environment – which also includes maintaining the organisation’s good reputation with its community – helping to resolve conflicts, and recognising the contributions of individuals to the overall success of the organisation. It is suggested that one of the biggest factors in good leadership is “inclusiveness”; that leadership is not so much maintaining a superior position, but in demonstrating willingness to lower boundaries between the workforce and management. This can be accomplished in different ways, such as ‘power-sharing’, giving people greater responsibilities according to their talents and experience, and by engaging with employees on more personal, emotional terms to encourage emotional investment in the organisation and improve communications (Bryan, 2009, p. 5; Dean, 2009, p. 31). This kind of leadership is sometimes called “transformational leadership”, which has in at least one study been experimentally shown to be superior – in measures of employee knowledge and motivation – to more ‘conventional’ management methods (Dvir, Eden, Avolio, & Shamir, 2002, pp. 737-739). References Alvesson, M., and Sveningsson, S. (2003). “Managers Doing Leadership: The Extra-Ordinarization of the Mundane”, Human Relations, vol. 56, no. 12, pp. 1435-1459. Benowitz, E. (2001). Principles of Management. New York: Hungry Minds Books. Bryan, L. 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(2009). “Enhancing performance through goal setting, engagement, and optimism”, Industrial Management & Data Systems, vol. 109, no. 7, pp. 943-956. DOI: 10.1108/02635570910982292. Morris, M.H., and Pitt, L.F. (1993). “The Contemporary Use of Strategy, Strategic Planning, and Planning Tools by Marketers: A Cross-national Comparison”, European Journal of Marketing, vol. 27, no. 9, pp. 36-57. Pearson, G., and Parker, M. (2008). “Management or Organizing? A Dialogue”, Business and Society Review, vol. 113, no. 1, pp. 43-61. Porter, M.E. (1987). “From Competitive Advantage to Corporate Strategy”, Harvard Business Review, May-June 1987, pp. 43-59. Rahim, M.A. (2001). Managing Conflict in Organizations, 3rd Ed. Westport, Connecticut: Quorum Books. Rahim, M.A., Garrett, J.E., and Buntzman, G.F. (1992). “Ethics of Managing Interpersonal Conflict in Organizations”, Journal of Business Ethics, vol. 11, pp. 423-432. Whittington, J.L, and Galpin, T.J. (2010). “The engagement factor: building a high-commitment organization in a low-commitment world”, Journal of Business Strategy, vol. 31, no. 5, pp. 14-24. DOI: 10.1108/02756661011076282. Windsor, D. (2006). “Corporate Social Responsibility: Three Key Approaches”, Journal of Management Studies, vol. 43, no. 1, pp. 93-114. Read More