Function and Activity of an Organization Management - Chapter 1 - Part 3

Function and Activity of an Organization Management

Management has been described as a process whereby the resources of an organization are used to achieve organizational objectives. The traditional approach, which is used to examine this process, is to condense it down to planning, organizing, leading and controlling activities which is known as POLC approach. These four functions are interrelated and are equally important in achieving the organization’s goals. For instance, a manager cannot just do the planning and ignore the other aspects.

I. PLANNING:

Planning is usually listed as the first function of management. This is because we must have a plan before we can organize. Planning can be defined as the management function which involves setting the company's goals and then determining the means to achieve these goals. In other words planning is about deciding how best to achieve goals and objectives. In simpler terms, planning is to decide what to do and then find out how to do it.

Planning is a process consisting of several steps. The process begins with environmental scanning, which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

A. STRATEGIC PLANNING

Strategic planning involves analyzing (SWOT analysis) competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization's mission, which is its fundamental reason for existence. An organization's top management most often conducts strategic planning.

B. TACTICAL PLANNING

Tactical planning is intermediate-range planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Tactical planning often has a one- to three-year time horizon.

C. OPERATIONAL PLANNING

Operational planning generally assumes the existence of objectives and specifies ways to achieve them. Operational planning is short-range planning that is designed to develop specific action steps that support the strategic and tactical plans. Operational planning usually has a very short time horizon, from one week to one year.

II. ORGANIZING:

Organizing is the management function which focuses on arranging and allocating work, authority, and resources among an organization’s members so that plans may be successfully carried out. This function involves the setting up of an organizational structure whereby work is allocated, lines of authority and responsibility is defined, and a system of rules and regulations which guide the conduct of employees lay down. This structure should constantly change to suit the organization’s needs.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called "job design" decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or cluster jobs into departments to effectively coordinate effort. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations utilize multiple methods of departmentalization. Organizing at the level of job involves how best to design individual jobs to most effectively use human resources.

III. LEADING:

The next management function is leading. Leading involves influencing others to engage in the work behaviors necessary to reach organizational goals. The manager must communicate with his/her subordinates, explain his/her plans to them, and lead and motivate them to exert their maximum efforts to achieve the goals.

To become effective at leading, managers must first understand their subordinates' personalities, values, attitudes, and emotions. Therefore, the behavioral sciences have made many contributions to the understanding of this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates.

IV. CONTROLLING: Controlling is the management function aimed at regulating organizational activities so that actual performance will conform to expected organizational standards and goals. Therefore, the controlling function consists of three steps:

o   Establishing a performance standard or target,

o   Measuring actual performance  and comparing it with the performance standard, and

o   Taking corrective actions if deviations are detected.

Performance standards are often stated in monetary terms such as revenue, costs, or profits, but may also be stated in other terms, such as units produced, number of defective products, or levels of customer service.

The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.