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AUI2601 EXAM PACK
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,These four functions will now be discussed in more detail:PLANNING
Planning relates to the main purpose(s) of the organisation and includes the
setting of both short-term and long-term objectives. It requires knowledge of or
research into the technological aspects of the business that the organisation is in,
the physical and mechanical resources available, the operating methods,
techniques or strategies, and policy and t h e staff situation. All of these
elements must be considered within the limits imposed by the capacity and
marketing potential of the products that the organisation manufactures or
trades in, or the service that the organisation renders. Organising, directing and
controlling should always be planned properly in advance to ensure the most
harmonious relationship possible between these basic elements of successful
management.
Sawyer and Dittenhofer (2003) have the following to say about the planning
function of management:
Planning precedes all other management functions. It is necessarily
the first of the four functions of management, because from plans flow
organisation, direction, and control. Every organisation must fit the
plans of the entity. All direction is pointed at moving people toward
planned objectives and goals. All controls should be designed to make
sure that plans will be carried out effectively, efficiently, and
economically.
All planning is strategic or tactical. Strategic planning is long range, whereas
tactical planning is short range. A primary purpose of strategic planning is to
help managers cope with future contingencies. It involves developing the
organisational mission and objectives, and the means to achieve them.
Strategic plans include tax planning, capital budgeting, personnel planning,
and product planning. Tactical plans relate to the day-to-day operations of the
enterprise; production scheduling is an example.
Planning involves managers at all levels of the organisation. Plans are
decisions to take certain steps. However, they should be flexible, adjusting to
,circumstances. If they are to be successful, they should be coordinated
among functions and cost effective.
Planning addresses a number of management fundamentals, such as setting
and determining the following:
• mission, that is, the basic function or task of an organisation.
• objectives and goals of the organisation that guide the enterprise
toward its mission.
• authoritative direction and control (governance) of the organisation, of
which risk management is an important aspect.
• strategies that implement the objectives and are the broad, overall
concepts of an operation.
• principles that are general guides for action.
• policies that are general guides, namely, individual thinking
for action.
• procedures are specific guides that prescribe action, a sequence of
steps to accomplish a task.
• rules are the simplest form of plans, which must be followed as stated
and allow for no discretion. Standards are norms against which
activities are measured.
• premises are the assumptions on which plans are based.
• budgets give quantitative expression to an entity's plans.
• decision making is problem solving. It is a planning function and is
therefore future-oriented.
ORGANISING
Organising brings together people and processes in logical groupings to carry
out plans and meet objectives. Good organisation is no guarantee of success, but
poor organisation will almost inevitably bring about failure, because it breeds
conflict and frustration.
, Organisation charts show the structure of the organisation. However, they illustrate
only a small part of an executive's activities and interfaces. Since they are static
representations, they need to be revised constantly if the organisation is dynamic.
They may imply what is not stated, namely that departments on the same level of
the hierarchy do not have the same status. Some executives feel that organisation
charts do more harm than good because of the danger of misinterpretation, rigidity,
and the failure to record changing and complex relationships.
Organisation charts do have benefits, however: they can show the chain of
command – the hierarchy, accountability, and responsibility of the organisation's
executives. They can be designed to show the basic function of each position, and
they do provide a valuable overview of the organisation.
The following basic management concepts fall under “organising”:
• Responsibility, the obligation to
perform.
• Authority, the right to perform, to command, to enforce compliance, derived
from responsibility.
• Accountability, the obligation of workers and managers to give a
reckoning/feedback and take responsibility for what they have accomplished
or failed to accomplish, derived from responsibility.
• Delegation includes assigning responsibility, granting authority, and exacting
accountability.
• Span of Control refers to the number of subordinates a supervisor can
efficiently and effectively manage.
• Staff and Line – Line people make “line decisions”. Staff people advise them.
Functional authority is the assignment of some of the chief executive's
authority to a staff organisation or an individual.
• Departmentalisation divides the organisation into distinct groupings to
perform assigned tasks.
• Decentralisation divides large complex organisations into smaller business
units that are relatively compact and simple.
• Committees, a committee is a group of people who work together on some
aspect of a management function.
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