Management starts with planning and ends with planning. Hope those experts out there agree with this. This is why some see the planning function of management as the most important part in the cycle. It embodies the what, when and the how an organization will accomplish desires in a certain period or point in time. But what is management by the way?
There are lots of definitions about management but basically, it is the task of making other people accomplish a task and achieve certain purpose, goals and objective, utilizing in an effective and efficient way, available resources. And in order to do this, one has to follow a certain general cycle namely planning, implementing and controlling. People who manage an organization are always performing these functions inherently. Some people and authors say that organizing comes before implementing. But just the same, when you implement you can also organize at the same time. The only reason perhaps why organizing is being separately emphasized is that this function is done in both the planning and implementing stages. Known authors, like to use ‘directing’ instead of implementing. And others have included ‘leading’ before or after organizing as one of the major functions of management. The most important thing is we know that all of these are part and parcel of the functions of management and should be an inherent knowledge to managers or those who are practicing management.
The Planning Phase
The planning function involves three (3) basic major activities. These are:
(1) Setting of objectives,
(2) Formulating strategies and
(3) Laying down an action program.
Hence, after completing the planning stage, the output will obviously have three parts namely, the objectives, the strategies and the action program. The objectives are the basis where all the efforts of the people in the organization are directed and/or made. It is the purpose and goal for which the organization operates and desire to achieve. Strategies are the ways and means adopted towards achieving the objectives. While the action program embodies the detailed activities and the corresponding financial requirements needed to be undertaken and expend respectively.
Setting of objectives has but one aim and that is to come up with sound objectives. This means that in going about setting the objectives, several activities are needed to be accomplished depending on the characteristics of the organization. Some small organizations practice simple processes as scanning the environment and looking at the purpose for which the organization was created or just simply setting what they want to achieve. Others conduct situational analyses and resort to the use of the so called SWOT (strength, weakness, opportunities and threats) analysis. Still others employ strategic (not to be equated with strategies) planning to come up with their mission and vision and long-range objectives. Nevertheless, there are organizations that use all of the above tools in establishing their objectives.
In order for objectives to be sound, it has to have the SMART qualities which mean that objectives should pass the following criteria and hence should be:
- Time Bounded
Formulating strategies involves generating alternative ways on how objectives can be realized and deciding on the most appropriate one/s. Strategies require the commitment of resources known as the 4 Ms of management or money, materials, machine and men. Implications on organizational changes are usually associated with a strategy and entails risk in case of failure though benefits can also result in the event of success. Strategies are formulated in consideration of the competition and scarce resources. They are classified according to the nature of the organization and as such are usually unique, exclusive and translated into policies.
Action planning represents the detailed activities that the organization will have to undertake relative to the strategies. This activity further breaks down the “what to do” in each of the strategy that have been lined-up by management. The statements here are more elaborate and identify organizational responsibilities including the time frame to accomplish each task. The tasks are linked to a strategy and are geared towards the attainment of organizational objectives. Since this part of the plan involves action, it is in this section where committed resources are described in detail. This includes:
- the responsibilities of personnel
- the equipment and machineries required
- the type and quality of materials and corresponding sources
- the geographical location of operation, and
- the financial requirement
- the revenue and income targets
Organizations differ from each other in terms of planning process. But basically, the above described is generally part of every planning system.
The Implementation Stage
This stage is obviously the actualization of the plan with the action program as the guide and basis for all the actions that are needed to activate the plan. Similarly, the required resources are employed based on what is specified on the plan. Since the action program includes parameters such as timelines, quantities and cost, the action program is the basis for measuring how well the implementation is being done and if the desired accomplishments in a given timeline are realized. Organizations measure performance on the attainment of targeted quantities, budgeted expenditures and projected revenues as indicated in the plan. In project management, tools such as a PERT or Gantt chart that can be developed manually or structured using available project management software such as the MS Project are used for this purpose. Plans have to be detailed as possible and indicate targets and corresponding budgets for control purposes.
Management would not be able to control operations in the absence of a plan. Hence, the control prerequisite is for management to have a plan in order to have an effective control. This function is necessary because of the fact that the estimates and projections made during the planning stage were based on certain assumptions and/or forecast of the future and almost always the actual scenario deviates from what was expected. Hence, information on the actual results of the implementation or operation should be obtained. During the implementation stage, actual results of what transpired and accomplishments are recorded and reported for comparison with targets. Along with these, the corresponding actual expenditures are also compared with the budgeted expenses. An analysis of variance (Anova) is usually conducted to determine the cause/s of deviations from the plan. Unfavourable deviations from the plan are investigated further and appropriate actions are made to review the plans to include all the assumptions made and make revisions if necessary to adopt with the prevailing situation and make the organization’s current efforts in line and updated.