NOTES ON MANAGEMENT PART 2 of 5 PARTS THE MANAGEMENT PROCESS

Musbri Mohamed DIL; ADIL ( ITM ) MBL ( UKM )1

The Planning Process If you dont know where you are going , any path will get you there ` Planning is the first of the managerial functions, because without it the rest cannot be carried out. Comprehensive planning consists of strategic, intermediate and operational plans. Most firms tend to be oriented too much toward the short run although prime attention was given to long run considerations.

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The formulation of the strategic plan depends on the firms basic socioeconomic mission, values of the top management and analysis of the organizations strengths and weakness. The analysis of strengths requires accurate economic and sales forecasting coupled with a frank, honest evaluation of the companys material resources and personnel competencies. Only in this way can a firm identify a niche and formulate long range objectives.

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Although the long-range plan provides general direction, the intermediate range and especially the operational plans are also important because they offer specific direction. The operational plan often consists of derivative functional plans such as marketing, production and finance plans, designed to attain short run objectives while harmonizing with the previously determined long range goals. Such shortrange plans provide management with a method for gauging progress, serving as a basis from which to adapt or modify current plans and construct future ones. Once objectives are established and plans have been drawn up, the organization is then in a position to formulate its organization design.

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The Organizing ProcessThe nature, purpose and function of organizing shall be examined thoroughly. These are the areas that present the nuts and bolts ideas involved in integrating the personnel and the structure.

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Organizing involves the assignment of duties and the coordination of efforts among all organizational personnel to ensure maximum efficiency in the attainment of predetermined objectives. The process covers a broad area and offers the manager many alternatives in both routine and critical situations. The numerous forms of departmentalization include functional, product, territorial, simple numbers, time, customer and equipment or process. Another common organizational form, often used in conjunction with departmentalization is a committee. The two general types of committees are ad hoc and standing. Sometime committees can be effectively used to complement the basic organizational structure.

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Span of control is the phrase used to refer to the numbers of people reporting to a given superior. A wide span of control results in a flat organization chart, while a narrow span results in a tall organization chart.

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There are three basic types of authority: line, staff and functional. Line authority is direct authority, as illustrated by a manager who gives orders directly to a subordinate. Staff authority is auxiliary authority that is supportive in nature, as in the case of the lawyer who has authority to advise the president on legal matters. Functional authority is authority in a department other than ones owns in the case of the vice president of finance who can give orders to the head of a product division in regard to financial matters.

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Organizing is certainly no mechanical function. Particular attention should be given to problem areas such as line staff conflict. Line people tend to be highly action oriented while staff people are concerned with studying problems in depth before making recommendations.

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Focus should also be given to topics of decentralization and informal organization. Decentralization is influenced by a number of factors including costs, uniform policy, company size, philosophy of top management, philosophy of subordinate managers and the functional area in which one works.

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The informal organization is the organizational arrangement created by the individuals who work in the structure. Their informal relationships supplement formal authority. Authority thus consists of two-factor i.e. formal authority that is delegated by ones superior and personal power which can be attained in a number of different ways including experience, drive and education.11

With the introduction of the informal organization, it becomes obvious that organizing is a dynamic process. New organization structures are now emerging. Modern structures are now adapting these concepts to meet the demands of the external environment. The result has been the emergence of adaptive structures.

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Adaptive Organization Structures The use of bureaucratic structures has begun to decline. One reason for this decline is that the inherent assumptions underlying bureaucracy are unrealistic. The organization cannot function with mechanical rules and regulations that have limited value in motivating and leading the modern worker.

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In overcoming bureaucratic deficiencies, many firms are turning to adaptive organization structures; new designs based on a number of assumptions. One such assumption is that the organization operates in a dynamic environment. A second is that personnel; task and environment are related and must be fit together properly for the best structure and output. Due attention should be given to the impact of technology and its effect on organizational personnel, from the workers right up to the managers. At the worker level, technology affects social relationships as well as job content. At the managerial level, it encourages greater integration of colleagues and of planning effort.

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Technology also affects the organization structure by causing changes in such factors as the length of the line of command, the span of control of the chief executive and the ratio of managers to total personnel. In addition, mechanistic designs tend to give way to organic ones, as has been seen in the research of Woodward, Zwerman, Lawrence and Lorsch and Meyer; the five prominent researchers in the organization study boom of recent times.

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What do these new organic structures look like? How do they work? Exactly when are they used? These questions are answered through examinations of project, matrix and free-form designs. The project organization form entails the gathering of the best available talent to accomplish a specific and complex understanding within time, cost and/or quality parameters, followed by the disbanding of the team upon completion of the undertaking ``. Project organization has been employed in numerous and diverse ways, from building dams and weapon systems to conducting research and development and designing bank credit card systems. The major advantage of this organizational form is that it allows the project manager and team to concentrate their attention on one specific undertaking.

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The matrix structure is a hybrid form of organization, containing characteristics of both project and functional structures. In a matrix design, employees are in a sense on partial loan to the matrix project manager. These employees, therefore, have a dual responsibility-to the line manager who lent them to the project manager for whom they work for the life of the project. The result is a uniquely horizontal and vertical flow of authority. Since the project manager has only project authority, this individual must rely on human relations assets and skills- for example negotiation, personality, persuasive ability, the aura of competence and the brokering of reciprocal favours. While the matrix structure has advantages, the organization considering its use must also weight the disadvantages inherent in it. Only after considering both aspects of the matrix can an organization make an intelligent decision regarding its overall value.

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Another adaptive organization design is the free form, or organic structure. This design can take any shape, but it always has two prime characteristics: the downplay of rigid bureaucratic rules and an emphasis on self-regulations. A number of conglomerates have adopted this organization form. There are four basic models of matrix structures: project, product-region and multidimensional. Perhaps the greatest advantage of a free form structure is its value to the manager who must cope with change.

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What kind of structure is best? The question has no single right answer. Best depends on the situation. For that reason, the area of contingency organization design is currently very important. Some firms need a mechanistic structure; others work better with an organic one. The answer to the question thus depends on forces operating on managers, subordinates, task and environment. Organizations are redesigning their structures in order to adapt more effectively to their environments. However, the organizing process only helps bring together the workers and the work. Management still needs a basis for comparing the plan and the results.

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The Controlling ProcessThe three basic steps in this process are the establishment of standards, the comparison of performance with these standards and the correction of deviations. The key to the entire process rests on effective feedback.

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In attaining feedback, the manager can use various control techniques. Some of the more traditional include budgeting, break-even analysis, personal observation and personnel performance evaluation. Some of the more specialized entail information design and time-event analyses, such as PERT and milestone scheduling. Since these analytic techniques are not designed to control overall performance, the manager needing overall performance control can simply turn to such other techniques as profit and loss, return on investment, key area control and auditing. Thank you.

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