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Planning,Organizing,Leading,andControlling

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1.4Planning,Organizing,Leading,andControlling
LEARNINGOBJECTIVES
1.Knowthedimensionsoftheplanningorganizingleadingcontrolling(POLC)framework.
2.KnowthegeneralinputsintoeachPOLCdimension.

Amanagersprimarychallengeistosolveproblemscreatively.Whiledrawingfromavarietyof
academicdisciplines,andtohelpmanagersrespondtothechallengeofcreativeproblemsolving,
principlesofmanagementhavelongbeencategorizedintothefourmajorfunctionsofplanning,
organizing,leading,andcontrolling(thePOLCframework).Thefourfunctions,summarizedinthe
POLCfigure,areactuallyhighlyintegratedwhencarriedoutinthedaytodayrealitiesofrunningan
organization.Therefore,youshouldnotgetcaughtupintryingtoanalyzeandunderstandacomplete,
clearrationaleforcategorizingskillsandpracticesthatcomposethewholeofthePOLCframework.

Itisimportanttonotethatthisframeworkisnotwithoutcriticism.Specifically,thesecriticismsstem
fromtheobservationthatthePOLCfunctionsmightbeidealbutthattheydonotaccuratelydepict
thedaytodayactionsofactualmanagers.H.Mintzberg,TheNatureofManagerialWork(NewYork:
Harper&Row,1973)D.Lamond,AMatterofStyle:ReconcilingHenriandHenry,Management
Decision42,no.2(2004):33056.Thetypicaldayinthelifeofamanageratanylevelcanbe
fragmentedandhectic,withtheconstantthreatofhavingprioritiesdictatedbythelawofthetrivial
manyandimportantfew(i.e.,the80/20rule).However,thegeneralconclusionseemstobethattheP
OLCfunctionsofmanagementstillprovideaveryusefulwayofclassifyingtheactivitiesmanagers
engageinastheyattempttoachieveorganizationalgoals.D.Lamond,AMatterofStyle:Reconciling
HenriandHenry,ManagementDecision42,no.2(2004):33056.

Figure1.7 ThePOLCFramework

Planning

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Planning,Organizing,Leading,andControlling
Planningisthefunctionofmanagementthatinvolvessettingobjectivesanddeterminingacourseof
actionforachievingthoseobjectives.Planningrequiresthatmanagersbeawareofenvironmental
conditionsfacingtheirorganizationandforecastfutureconditions.Italsorequiresthatmanagersbe
gooddecisionmakers.

Planningisaprocessconsistingofseveralsteps.Theprocessbeginswithenvironmentalscanning
whichsimplymeansthatplannersmustbeawareofthecriticalcontingenciesfacingtheirorganization
intermsofeconomicconditions,theircompetitors,andtheircustomers.Plannersmustthenattempt
toforecastfutureconditions.Theseforecastsformthebasisforplanning.

Plannersmustestablishobjectives,whicharestatementsofwhatneedstobeachievedandwhen.
Plannersmustthenidentifyalternativecoursesofactionforachievingobjectives.Afterevaluatingthe
variousalternatives,plannersmustmakedecisionsaboutthebestcoursesofactionforachieving
objectives.Theymustthenformulatenecessarystepsandensureeffectiveimplementationofplans.
Finally,plannersmustconstantlyevaluatethesuccessoftheirplansandtakecorrectiveactionwhen
necessary.

Therearemanydifferenttypesofplansandplanning.

Strategicplanninginvolvesanalyzingcompetitiveopportunitiesandthreats,aswellasthestrengths
andweaknessesoftheorganization,andthendetermininghowtopositiontheorganizationtocompete
effectivelyintheirenvironment.Strategicplanninghasalongtimeframe,oftenthreeyearsormore.
Strategicplanninggenerallyincludestheentireorganizationandincludesformulationofobjectives.
Strategicplanningisoftenbasedontheorganizationsmission,whichisitsfundamentalreasonfor
existence.Anorganizationstopmanagementmostoftenconductsstrategicplanning.

Tacticalplanningisintermediaterange(onetothreeyears)planningthatisdesignedtodevelop
relativelyconcreteandspecificmeanstoimplementthestrategicplan.Middlelevelmanagersoften
engageintacticalplanning.

Operationalplanninggenerallyassumestheexistenceoforganizationwideorsubunitgoalsand
objectivesandspecifieswaystoachievethem.Operationalplanningisshortrange(lessthanayear)
planningthatisdesignedtodevelopspecificactionstepsthatsupportthestrategicandtacticalplans.

Organizing
Organizingisthefunctionofmanagementthatinvolvesdevelopinganorganizationalstructureand
allocatinghumanresourcestoensuretheaccomplishmentofobjectives.Thestructureofthe
organizationistheframeworkwithinwhicheffortiscoordinated.Thestructureisusuallyrepresented
byanorganizationchart,whichprovidesagraphicrepresentationofthechainofcommandwithinan
organization.Decisionsmadeaboutthestructureofanorganizationaregenerallyreferredtoas
organizationaldesigndecisions.

Organizingalsoinvolvesthedesignofindividualjobswithintheorganization.Decisionsmustbemade
aboutthedutiesandresponsibilitiesofindividualjobs,aswellasthemannerinwhichthedutiesshould
becarriedout.Decisionsmadeaboutthenatureofjobswithintheorganizationaregenerallycalledjob
designdecisions.

Organizingattheleveloftheorganizationinvolvesdecidinghowbesttodepartmentalize,orcluster,
jobsintodepartmentstocoordinateefforteffectively.Therearemanydifferentwaysto
departmentalize,includingorganizingbyfunction,product,geography,orcustomer.Manylarger
organizationsusemultiplemethodsofdepartmentalization.

Organizingatthelevelofaparticularjobinvolveshowbesttodesignindividualjobstomosteffectively
usehumanresources.Traditionally,jobdesignwasbasedonprinciplesofdivisionoflaborand
specialization,whichassumedthatthemorenarrowthejobcontent,themoreproficienttheindividual

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Planning,Organizing,Leading,andControlling
performingthejobcouldbecome.However,experiencehasshownthatitispossibleforjobstobecome
toonarrowandspecialized.Forexample,howwouldyouliketoscrewlidsonjarsonedayafter
another,asyoumighthavedonemanydecadesagoifyouworkedincompanythatmadeandsoldjellies
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andjams?Whenthishappens,negativeoutcomesresult,includingdecreasedjobsatisfactionand
organizationalcommitment,increasedabsenteeism,andturnover.

Recently,manyorganizationshaveattemptedtostrikeabalancebetweentheneedforworker
specializationandtheneedforworkerstohavejobsthatentailvarietyandautonomy.Manyjobsare
nowdesignedbasedonsuchprinciplesasempowerment,jobenrichmentandteamwork.For
example,HUIManufacturing,acustomsheetmetalfabricator,hasdoneawaywithtraditional
departmentstofocusonlisteningandrespondingtocustomerneeds.Fromcompanywidemeetings
toteamhuddles,HUIemployeesknowandunderstandtheircustomersandhowHUImightservice
thembest.http://www.huimfg.com/abouthuiyourteams.aspx(accessedOctober15,2008).

Leading
Leadinginvolvesthesocialandinformalsourcesofinfluencethatyouusetoinspireactiontakenby
others.Ifmanagersareeffectiveleaders,theirsubordinateswillbeenthusiasticaboutexertingeffortto
attainorganizationalobjectives.

Thebehavioralscienceshavemademanycontributionstounderstandingthisfunctionofmanagement.
Personalityresearchandstudiesofjobattitudesprovideimportantinformationastohowmanagers
canmosteffectivelyleadsubordinates.Forexample,thisresearchtellsusthattobecomeeffectiveat
leading,managersmustfirstunderstandtheirsubordinatespersonalities,values,attitudes,and
emotions.

Studiesofmotivationandmotivationtheoryprovideimportantinformationaboutthewaysinwhich
workerscanbeenergizedtoputforthproductiveeffort.Studiesofcommunicationprovidedirectionas
tohowmanagerscaneffectivelyandpersuasivelycommunicate.Studiesofleadershipandleadership
styleprovideinformationregardingquestions,suchas,Whatmakesamanageragoodleader?and
Inwhatsituationsarecertainleadershipstylesmostappropriateandeffective?

Controlling
Figure1.8

Controllinginvolvesensuringthatperformancedoesnotdeviatefrom
standards.Controllingconsistsofthreesteps,whichinclude(1)establishing
performancestandards,(2)comparingactualperformanceagainst
standards,and(3)takingcorrectiveactionwhennecessary.Performance
standardsareoftenstatedinmonetarytermssuchasrevenue,costs,or
profitsbutmayalsobestatedinotherterms,suchasunitsproduced,
numberofdefectiveproducts,orlevelsofqualityorcustomerservice.

Themeasurementofperformancecanbedoneinseveralways,depending
ontheperformancestandards,includingfinancialstatements,salesreports,
productionresults,customersatisfaction,andformalperformance

Qualitycontrolensures

appraisals.Managersatalllevelsengageinthemanagerialfunctionof

thattheorganization

controllingtosomedegree.

deliversonitspromises.

Themanagerialfunctionofcontrollingshouldnotbeconfusedwithcontrol
inthebehavioralormanipulativesense.Thisfunctiondoesnotimplythat

2010Jupiterimages
Corporation

managersshouldattempttocontrolortomanipulatethepersonalities,
values,attitudes,oremotionsoftheirsubordinates.Instead,thisfunction
ofmanagementconcernsthemanagersroleintakingnecessaryactionstoensurethattheworkrelated
activitiesofsubordinatesareconsistentwithandcontributingtowardtheaccomplishmentof
organizationalanddepartmentalobjectives.

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Effectivecontrollingrequirestheexistenceofplans,sinceplanningprovidesthenecessaryperformance
standardsorobjectives.Controllingalsorequiresaclearunderstandingofwhereresponsibilityfor

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deviationsfromstandardslies.Twotraditionalcontroltechniquesarebudgetandperformanceaudits.

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Anauditinvolvesanexaminationandverificationofrecordsandsupportingdocuments.Abudgetaudit
providesinformationaboutwheretheorganizationiswithrespecttowhatwasplannedorbudgetedfor,
whereasaperformanceauditmighttrytodeterminewhetherthefiguresreportedareareflectionof
actualperformance.Althoughcontrollingisoftenthoughtofintermsoffinancialcriteria,managers
mustalsocontrolproductionandoperationsprocesses,proceduresfordeliveryofservices,compliance
withcompanypolicies,andmanyotheractivitieswithintheorganization.

Themanagementfunctionsofplanning,organizing,leading,andcontrollingarewidelyconsideredtobe
thebestmeansofdescribingthemanagersjob,aswellasthebestwaytoclassifyaccumulated
knowledgeaboutthestudyofmanagement.Althoughtherehavebeentremendouschangesinthe
environmentfacedbymanagersandthetoolsusedbymanagerstoperformtheirroles,managersstill
performtheseessentialfunctions.

K E Y TA K E AWAY
Theprinciplesofmanagementcanbedislleddowntofourcricalfuncons.Thesefunconsare
planning,organizing,leading,andcontrolling.ThisPOLCframeworkprovidesusefulguidanceinto
whattheidealjobofamanagershouldlooklike.

EXERCISES
1.WhatarethemanagementfunconsthatcomprisethePOLCframework?
2.Arethereanycricismsofthisframework?
3.Whatfuncondoesplanningserve?
4.Whatfuncondoesorganizingserve?
5.Whatfuncondoesleadingserve?
6.Whatfuncondoescontrollingserve?

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