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Planning as an function of Management
Chapter 7
PLANNING
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 P-O-L-C framework). 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. 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 man- agers engage in as they attempt to achieve

organizational goals

FIGURE 1.7 the P-O-L-Framework

Planning
Planning is the job 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.

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Reference: Carpenter (2024).Principles of Management handbook.
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Planning is a process consisting of several steps.

The decision-making process involves the following steps:

1. Define the problem.

2. Identify limiting factors.

3. Develop potential alternatives.

4. Analyse the alternatives.

5. Select the best alternative.

6. Implement the decision.

7. Establish a control and evaluation system

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.

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Reference: Carpenter (2024).Principles of Management handbook.
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There are many different types of plans and planning

1. Strategic planning Involves analysing 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 areas on for existence. An

organization’s top management most often conducts strategic planning.

2. 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 en- gage in tactical planning.

3. 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.

Compiled: Mr Liyerenge
Reference: Carpenter (2024).Principles of Management handbook.
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Functions of Management

Organizing
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 depart- metalized, 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 labour 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

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Reference: Carpenter (2024).Principles of Management handbook.
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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.

Leading

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 behavioural 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 can 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?”

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Reference: Carpenter (2024).Principles of Management handbook.
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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. 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.

Compiled: Mr Liyerenge
Reference: Carpenter (2024).Principles of Management handbook.
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Compiled: Mr Liyerenge
Reference: Carpenter (2024).Principles of Management handbook.
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