Management process

PLANNING

Planning involves defining the organization's goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. Planning can be either formal or informal.

 

In informal planning, nothing is written down, and there is little or no sharing of goals with others in the organization. This type of planning often is down in many small businesses and also exists in some large organizations as well.

 

When we use the term planning, we mean formal planning. In formal planning; specific goals covering a period of years are defined. Those goals are written down and shared with organizational members. Finally, specific action programs exist for the achievement of these goals.

PURPOSES OF PLANNING

1. Direction to managers.

   Planning establishes coordinated effort. It gives direction to managers and non-managers alike. When employees know where the organization or work unit is going and what they must contribute to reach goals, they can coordinate their activities, cooperate with each other, and do what it takes to accomplish those goals.

2. Reduce un-certainty.

   Planning also reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses.

3. Reduce overlapping.

   Planning reduces overlapping and wasteful activities. When work activities are coordinated around established plans, wasted time and resources and redundancy can be minimized.

4. Improve efficiency.

   When means and ends are made clear through planning, inefficiencies become obvious and can be corrected or eliminated.

5. Minimum wastage of sources.
6. Standardizes the controlling process.

   Planning establishes goals or standards that are used in controlling. If we're unsure of what we're trying to accomplish, how can we determine whether we have actually achieved it?

 

Planning depends upon two elements:

I – Goals: Goals are desired outcomes for individuals, groups, or entire organization. There are two types of goals:

Stated Goals: Official statements of what an organization says, and what it wants its various stakeholders to believe, its goals are.

Real Goals: Goals that an organization actually pursues, as defined by the actions of its members.

Ii – Plans: Documents that outline how goals are going to be met including resource allocations, schedules, and other necessary actions to accomplish the goals.

 

APPROACHES TO ESTABLISHING GOALS

TRADITIONAL GOAL SETTING

An approach to setting goals in which goals are set at the top level of the organization and then broken down into sub goals for each level of the organization.

    

Means-Ends Chain

An integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level.

MANAGEMENT BY OBJECTIVIES (MBO)

A management system in which specific performance goals are jointly determined by employees and their managers, progress toward accomplishing those goals is periodically reviewed, and rewards are allocated on the basis of this progress.

TYPES OF ORGANIZATIONAL STRATEGIES

Organizational strategies include strategies at the corporate level, business level, and functional level. Managers at the top level of the organization typically are responsible for corporate-level strategies. Managers at the middle level typically are the responsible for business-level strategies. And managers at the lower levels of the organization typically are responsible for the functional-level strategies.

 

1. CORPORATE-LEVEL STRATEGY

A corporate-level-strategy seeks to determine what business a company should be in or want to be in. It refers to make strategies for multiple (more than one) products under an organization.

 

2. BUSINESS-LEVEL STRATEGY

A business level strategy seeks to determine how an organization should compete in each of its business. When you as a manager makes strategies for your own product-line from multiple products in which your organization deals.

 

1. STRATEGIC BUSINESS UNIT

When an organization is in several different businesses, these single businesses that are independent and that formulate their own strategies are often called strategic business units.

1. COMPETITIVE ADVANTAGES

Competitive advantage is what sets an organization apart, that is, its distinct edge. You can check the resource of your business that competes to other companies and you can facilitate your customers to compete them. In any industry, five competitive forces dictate the rule of competition. Managers access an industry's attractiveness using the following five factors.

1. Threat of new entrants. Factors such as economies of scale, brand loyalty, and capital requirements determine how easy or hard it is for new competitors to enter an industry.

2. Threats of substitutes. Factors such as switching costs and buyer loyalty determine the degree to which customers are likely to buy a substitute product.

3. Bargaining power of buyer. Factors such as number of customers in the market, customer information, and the availability of substitutes determine the amount of influence that buyer have in an industry.

4. Bargaining power of suppliers. Factors such as the degree of supplier concentration and availability of substitute inputs determine the amount of power that suppliers have over firms in the industry.

5. Existing rivalry. Factors such as industry growth rate, increasing or failing demand, and product differences determine how intense the competitive rivalry will be among existing forms in the industry.

 

3) COST LEADERSHIP STRATEGY

A business level strategy in which the organization is the lowest-cost produces in its industry.

4) DIFFERENTATION STRATEGY

The company that seeks to offer unique products that are widely valued by customers is following a differentiation strategy.

3. FUNCTIONAL-LEVEL STRATEGY

A functional-level strategy seeks to determine how to support the business-level strategy. It means all sub departments of your organization should have such kind of strategies that are supporting your business-level strategies. These strategies facilitate you to achieve both corporate level strategies and business level strategies.

CONTROL

Control is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations. Three different approaches to designing control system have been identified.

1. MARKET CONTROL

Market control is an approach to control that emphasizes the use of external market mechanisms, such as price competition and relative market share, to establish the standards used in the control system.

1. BUEARUCRATIC CONTROL

Bureaucratic control is an approach to control that emphasizes organizational authority and relies on administrative rules, regulations, procedures, and policies.

1. CLEAN CONTROL

Under clean control, employee behaviors are regulated by the shared values, norms, traditions, rituals, beliefs, and other aspects of the organization's culture.

 

WHY IS CONTROL IMPORTANT?

• To maintain quality.
• To achieve goals.
• To reduce cost.
• To keep standard output.

 

CONTOL PROCESS

The control process is a three-step process including measuring actual performance, comparing actual performance against a standard, and talking managerial action to correct deviations or inadequate standards.

 

STEP1: MEASURING

To determine what actual performance is, a manager must acquire information about it.

How We Measure Four common sources of information frequently used by managers to measure actual performance are personal observation, statistical reports, oral reports and written reports. Management by walking around (MBWA) is a phase used to describe when a manager is out in the work area, interacting directly with employees, and exchanging information about what's going on.

What We Measure What we measure is probably more critical to the control process than how we measure. Why? The selection of the wrong criteria can result in serious dysfunctional consequences.

STEP2: COMPARING

The comparing step determines the degree of variation between actual performance and the standard. Some variation in performance can be expected in all activities. It's critical, therefore, to determine the acceptable range of variation. The range of variation is the acceptable parameters of variance between actual performance and the standards.

STEP3: TAKING MANAGERIAL ACTION

The third and final step in the control process is taking managerial action. Managers can choose among three possible courses of action.

1. Do Nothing

Managers can leave the deviations. "Do nothing" is fairly self-explanatory.

1. Correct Actual Performance

If the source of the performance variation is unsatisfactory work, the manager will want to take corrective action such as changing strategy, structure, compensation practice, or training programs; redesigning jobs; or firing employees.

Immediate Corrective Action. Corrective action that corrects problems at once to get performance back on track.

Basic Corrective Action. Corrective action that looks at how and why performance deviated and then proceeds to correct the source of deviation.

1. Revise the Standard

It's possible that the variance was a result of an unrealistic standard; that is, the goal may have been too high or too low. In such cases, it's the standard that needs corrective attention, not the performance.

DECISION-MAKING

A decision is a choice from two or more alternatives. Making good decisions is something that every manager should have. Decisions have a major influence in organizational success or failure. Top-level managers make decisions about their organization's goals, middle and lower-level managers make decisions about setting production schedules, handling problems and employee hiring and firing.

DECISION-MAKING PROCESS

Decision making process is a set of eight steps that are following:

STEP 1: IDENTIFYING A PROBLEM

The decision-making process begins with the existence of a problem. A problem is a discrepancy between an existing and a desired state of affairs.

 

STEP 2: IDENTIFYING DECISION CRITERIA

Once a manager has identified a problem that needs attention, the decision criteria important to resolving the problem must be identified. That is, managers must determine what's relevant in making a decision.

 

STEP 3: ALLOCATING WEIGHTS TO THE CRITERIA

The decision maker must weight the items in order to give them the correct priority in the decision. A simple approach of allocating weights is to give the most important criterion a weight of 10 and then assign weights to the rest against that standard.

 

STEP 4: DEVELOPING ALTERNATIVES

Then the decision maker should list the variable alternatives that could resolve the problem. In this step the manager doesn't has to evaluate the alternatives. He only has to list out them.

 

STEP 5: ANALYZING ALTERNATIVES

Once the alternatives have been identified, the decision maker must critically analyze each one. Each alternative is evaluated by appraising it against the criteria established. From his comparison, the strengths and weaknesses of each alternative become evident.

 

STEP 6: SELECTING AN ALTERNATIVE

The sixth step is the important act of choosing the best alternative from among those considered. We have determined all the pertinent criteria in the decision, weighted them, and identified and analyzed viable alternatives. Now we merely have to choose the alternatives that generated the highest score in previous step.

 

STEP 7: IMPLEMENTING THE ALTERNATIVE

Although the choice process is completed in the previous step, the decision may still fall if it isn't implemented properly. Implementation involves conveying the decision to those affected by it and getting their commitment to it.

 

STEP 8: EVALUATING DECISION EFFECTIVENESS

The last step in decision-making process involves appraising the outcome of the decision see if the problem has been resolved. Did the alternative chosen and implemented accomplish the desired results?

If the problem still exists then the manager would need to carefully assess what went wrong. Was the problem incorrectly defined? Were errors made in the evaluation of the various alternatives? Was the right alternative selected but poorly implemented. It might even require starting the whole decision process over.

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DECISION-MAKING STYLES

Four decision making styles are evident: directive, analytical, conceptual and behavioral.

• Directive style. People using the directive style have tolerance for ambiguity and are rational in their way of thinking. They're efficient and logical. Directive types make fast decision and focus on the short run. Their efficiency and speed in making decisions often results in their making decisions with minimal information and assessing few alternatives.
• Analytical style. Decision makers with an analytical style have much greater tolerance for ambiguity than do directive types. They want more information before making a decision and consider more alternatives than a directive-style decision maker does. Analytical decision makers are best characterized careful decision makers with the ability to adopt or cope with unique situations.
• Conceptual style. Individuals with conceptual style tend to be very broad in their outlook and will look at many alternatives. They focus on the long run and are very good at finding creative solutions to problems.
• Behavioral style. Decision makers with behavioral style work well with others. They're concerned about the achievements of subordinates and are receptive to suggestions from others. They often use meetings to communicate, although they try to avoid conflicts