What different types of decision a manager has to take in strategic planning process? Essay
What different types of decision a manager has to take in strategic planning process?
What different types of decision a manager has to take in strategic planning process? Strategic planning:
The process of determining a company’s long-term goals and then identifying the best approach for achieving those goals. A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling . The four functions, summarized in the P-O-L-C figure, are actually highly integrated when carried out in the day-to-day realities of running an organization. Therefore, you should not get caught up in trying to analyze and understand a complete, clear rationale for categorizing skills and practices that compose the whole of the P-O-L-C framework.
It is important to note that this framework is not without criticism. Specifically, these criticisms stem from the observation that the P-O-L-C functions might be ideal but that they do not accurately depict the day-to-day actions of actual managers.  The typical day in the life of a manager at any level can be fragmented and hectic, with the constant threat of having priorities dictated by the law of the trivial many and important few (i.e., the 80/20 rule). However, the general conclusion seems to be that the P-O-L-C functions of management still provide a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals.
Figure 1.6 The P-O-L-C Framework
Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.
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.
Strategic planning involves analyzing 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.
Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.
Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as organizational design decisions.
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 coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization.
Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources. Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. For example, how would you like to screw lids on jars one day after another, as you might have done many decades ago if you worked in company that made and sold jellies and jams? When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment, increased absenteeism, and turnover.
Recently, many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as empowerment, job enrichment and teamwork. For example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional “departments” to focus on listening and responding to customer needs. From company-wide meetings to team huddles, HUI employees know and understand their customers and how HUI might service them best.
Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives.
The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.
Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers scan effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions, such as, “What makes a manager a good leader?” and “In what situations are certain leadership styles most appropriate and effective? Controlling
Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. 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 quality or 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.
The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.
Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.
The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.
How a decision support system can become a point of a larger enterprise application?
How this integration of two systems can help a manger in routine decisions? Decision-making can be regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice. That may or may not prompt action. Decision making is one of the central activities of management and is a huge part of any process of implementation. Good decision making is an essential skill to become an effective leaders and for a successful career. Decision making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker. Making a decision implies that there are alternative choices to be considered, and in such a case we want not only to identify as many of these alternatives as possible but to choose the one that has the highest probability of success or effectiveness and best fits with our goals, desires, lifestyle, values, and so on. The main purpose of enterprise applications is to provides accurate and timely information necessary ,To facilitate the decision-making process and enable the organizations planning, control, and operational. Functions to be carried out effectively, basically concerned with Processing data into information and is then communicated to the various Departments in an organization.
For appropriate decision making. Enterprise application is a subset of the overall planning and control activities covering the application of humans, technologies, and procedures of the organization. . The system is the Mechanism to ensure that information is available to the managers in the form they want it and when they need it .Enterprise application provides several benefits to the business organization: the means of effective and efficient coordination
between Departments; quick and reliable referencing; access to relevant data and documents; use of less labor; improvement in organizational and departmental techniques; management of day-to-day activities (as accounts, stock control, payroll, etc.); day-to-day assistance in a Department and closer contact with the rest of the world. Enterprise application provides a valuable time-saving benefit to the workforce. Instead, that information can be entered quickly and easily into a computer program.
As the amount of raw data grows too large for employees to analyze, business analysts can build programs to access the data and information in response to queries by management. With faster access to needed information, managers can make better decisions about procedures, future directions, and developments by competitors, and make them more quickly. Managers have to assimilate masses of data, convert that data into information, form conclusions about that information and make decisions leading to the achievement of business objectives. It is essential for the survival of the enterprise, basically concerned with processing data into information. Data collection involves the use of Information Technology (IT) comprising: computers and telecommunications networks (E- Mail, Voice Mail, Internet, telephone, etc.).Computers are important for more quantitative, than qualitative, data collection, storage and retrieval; Special features are speed and accuracy, and storage of large amount of data. Telecommunications provide the means for one-way or two-way communication and for the transmission of messages. A combination of IT is used: telephone, computer, processor, printer, etc. A lot of time and money are saved and the security of data and messages is ensured. An enterprise application enables businesses to provide answers to managers in search of knowledge. Enterprise application does this by combining raw data about the organization’s operations (contained in its basic information technology systems) with information gathered from employees in expert systems that reflect the organization’s procedures.
Before the widespread use of computers, many organizations found difficulties in gathering, storing, organizing and distributing large amounts of data and information. Developments in computer technology made possible for managers to select the information they require, in the form best suited for their needs and in time they want. This information must be current and in many cases is needed by many people at the same time. So it has to be accurate, concise, timely, complete, well presented and storable. Most firms nowadays depend on IT. But personal computers (PCs) themselves will not improve organizational productivity: this only comes about if they are used efficiently and effectively. Putting in place the advanced technological systems needed to collect and sort data and employee information can be costly unless senior management, especially the CFO, controls the purchasing of the basic systems needed by different functional areas from the outset. The information system is the mechanism to ensure that information is available to the managers in the form they want it and when they Need it. It is designed to support their work
Through providing relevant information for their decision-making. Computer systems can clearly aid organizations in the processing of data into accurate, well presented, up-to-date and cost- effective information. Weather that information is also concise, relevant, timely and complete will depend largely on the capabilities of the people involved in its processing and selection. The term management information system made its first appearance in U.S. navy report on the use of computers to construct a single integrated system to manage all navy resources The MIS idea spread rapidly throughout the administrative systems community, encouraged by a spate of subsequent reports and conferences sponsored by the American Management Association. MIS was an “information” system because it informed managers, not because it was full of information in technical sense, though the distinction soon blurred as the idea of Enterprise application spread.
The term Enterprise application is synonymous with computer- based systems. Used broadly, it is seen as the system satisfying all the information needs of managers. Enterprise application is the study of providing information to people who make choices about the disposition of valuable resources in a timely, accurate, and complete manner at a minimum of cognitive and economic cost for acquisition, processing, storage, and retrieval. Another definition emphasizes the use to which the information is put, rather than the way it is produced: “A system to convert data from internal and external sources into information and communicate that information in an appropriate form, to managers at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible.” Others, however, give it more limited scope. They see it as a system collecting and analyzing data and producing reports.
Its purpose is to help managers to solve structured problems. But it should also fulfill a number of other purposes: • It should provide the information necessary to make non-routine decisions; • It should serve as a strategic weapon to gain competitive advantages • It should provide a basis to analyze warning signals that can originate both externally and internally; this is the main function of data base ; • It should automate routine operations thus avoiding human work in the processing tasks; • It should assist management in making routine decisions; Enterprise application is basically concerned with the process of collecting, processing, storing and transmitting relevant information to support the management operations in any organizations. Thus, the success of decision-making, which is the heart of administrative process, is highly dependent partly on available information, and partly on the functions that are the components of the process. For example, if managerial objectives are absent or unclear, probably due to inadequate information, there is no basis for a search. Without information obtained through a search, there are no alternatives to compare, and without a comparison of alternatives the choice of a particular course of action is unlikely to yield the desired result. According to Alabi (1997) the search could be through: • Undirected viewing—this involves a general exposure to information where. The search could be that the viewer has no specific purpose in mind. • Conditioned viewing—the directed exposure does not involve active search to a more or less clearly identified area or type of information. • Informal search—this is a relatively limited and unstructured effort to obtain specific information for a specific purpose. The information wanted is actively sought. • Formal search—this is a deliberate effort, usually following a pre- established plan, procedure or methodology to secure specific information relating to a specific issue.
Enterprise application may be viewed as a mean for transformation of data, which are used as Information in decision-making processes. There are so many definitions of Enterprise application. For the purpose of this research, enterprise application can be defined as a system providing management with accurate and timely information necessary to facilitate the decision-making process and enable the organizations planning, control, and operational functions to be carried out effectively. So in this way Increase competitiveness of the firm by reducing cost and improving processing speed. Almost all business organizations normally have some kind of information system for management. Accounting rules, stock control and market monitoring systems are the most traditional and common examples. The power of technology has transformed the role of information in business firm. Now information has become recognized as the lifeblood of an organization. Without information, the modern company is dead.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 27 February 2016
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