Unit 8 Organizational Planning and Controlling

Overview

Welcome to Unit 8.

You may recall our discussion in Unit 1 on the POLC frame, also known as the POLC cycle. POLC stands for the management functions of Planning, Organizing, Leading and Controlling and is the basic platform on which managing projects and organizations are built on. Most management textbooks refer to the use of this frame by firms (see diagram below and review notes on Unit 1 if needed). The diagram below by Bartol et al (2011) captures a helpful summary of the four functions.

Figure 8.1 Organisational Goals. McGraw Hill Australia Pty Ltd (2011), Management Foundations, Bartol et al

Do you think that the POLC framework has value for use outside of business?

Yes of course!

If we think about it, we use the POLC frame in many ways in our day to day lives. For instance, setting out on a long-distance trip, with weight management, financial management, time management, anger management etc., we use four steps to move to our goals from where we are at present.

Planning: What is our desired outcome, target, desired results, or goal? How much weight we wish to lose and by when, how much money we wish to save and by when, reducing the frequency of our outbursts of anger, how many hours of productive work per day, etc.
Organizing: Steps and resources needed for us to reach our goal.e.g. signing up for the gym, buying and eating healthy food, avoiding junk food, setting aside time needed for exercises, buying exercise equipment, setting apart a fixed amount of money for saving, attending special training sessions on anger management, projecting the costs for these steps, deciding the weekly/monthly targets to reach the grand goal, etc.
Leading: Motivation: Maintaining persistence and consistency to reach my goal, establishing daily routines, celebrating small wins, engaging in self talk that this can be done, surrounding oneself with a support network etc.
Controlling: Periodic Evaluation: checking my progress every week/ every month, assessing the need to step up the pace to catch up with my goals, avoiding any activities that do not help, assessing the need to recalibrate weekly/monthly goals, other corrective action I need to take etc.

In this unit, we take a detailed look at the P and the C of the POLC frame – Planning and Controlling – and discuss why planning and controlling are vital to organizational success.

Topics

This unit is divided into the following topics:

Is Planning Important?
The Planning Process
Types of Plans
Goals or Outcome Statements
Formal Organizational Planning in Practice
Employees Response to Planning
Management by Objective
The Controlled and Involvement – Oriented Approach to Planning and Controlling

Learning Outcomes

When you have completed this unit, you should be able to:

Describe the importance of planning and the elements of the planning process
Explain types of plans employed by organizations
Apply the planning process to a project in their organization
Explain when and how to use effective control mechanisms to ensure goals are reached
Identify when to use control oriented and involvement-oriented approaches in planning

Activity Checklist

Here is a checklist of learning activities you will benefit from in completing this unit. You may find it useful for planning your work. Expected time commitment: 3 hours

Learning Activities

Read section 17.1 of Principles of Management and the case study provided. Also see the article: “Seven Reasons Why Managers Fail to Plan” by Robert Tanner.
Read section 17.2 of your course text and apply the planning steps to a pressing matter for you.
Read section 17.3 of your course text and analyze your 5 step plan.
Read section 17.4 of your course text and create a goal statement that defines the results you seek to produce when implementing your plan.
Read section 17.5 of your course text and read the 3 articles listed.
Read section 17.6 of your course text and watch Simon Sinek as he explains the managers role in creating the right environment for emotional engagement of employees in reaching organizational goals.
-Play the Strategy Simulation Game and recapture your castle!
Read section 17.7 of your course text and watch the video Management by Objectives for Managers.
Read section 17.8 of your course text and analyze the Critical Thinking case study.

Assessment

Unit 8 Team Memo (Please confirm assignment instructions in Moodle)

Resources

Here are the resources you will need to complete this unit.

Bright, D. S. & Cortes, A. H. (2019). Principles of Management.
Other online resources will be provided in the unit.

8.1 Is Planning Important?

This question sounds like the proverbial rhetorical question, “Is the Pope Catholic?” to which the expected answer is a resounding “Yes!” Yes – planning is important in every aspect of personal and organizational life. You fail to plan, you plan to fail.

Simply put, planning is the process by which goals are established and attained. Controlling has to do with steps taken to ensure progress towards goal are on track and in a timely manner. Controlling also involves corrective measures taken by an organization to get back on track with desired progress.

Managers know the importance of planning and controlling, so they plan systematically and have control mechanisms and measures in place. However, it might come as a surprise to us that there are some managers who stay away from planning. One possible reason is that managers are very busy people, with years of experience behind them, they know the terrain very well, and so may decide to “wing it”, rather than go through the time-consuming process of planning and controlling.

Activity: Planning Case Study

First, read section 17.1 of your course text, Principles of Management. Next, read the following case study. It will help you warm up to the need for planning and controlling:

You are managing a small manufacturing operation that involves the final assembly of child sippy cups. There are two components to the sippy cup: the cup, a lid, and a straw as well as the box that will hold the product. You have two people reporting to you and you assign them to assemble the product. You also have a dotted-line report with the purchasing agent for the company that procures the components of the product (a dotted-line report is where one employee must work for and report to more than one manager) as well as the boxes and material needed (e.g., plastic that is used on the shrink-wrapping machine) to complete the product for sale. You have been given the following metrics.

You have been given a goal of producing 2,300 units per week.
It takes 1 minute to assemble the sippy cup.
It takes 45 seconds to place the sippy cup in the box and shrink-wrap the product.
It takes 15 seconds to examine the product for meeting quality, and you expect that 99.5% of the products will meet or exceed expectations.
The employees work for 8 hours per day.

Write up a plan that has achievable goals for your two direct reports and your dotted-line report so that you are meeting your overall goal. Also include any steps to evaluate/control progress along the way (adapted from Chapter 17 of text).

For further study on why managers may stay away from planning and controlling, read the following article: “Seven Reasons Why Managers Fail to Plan” by Robert Tanner.

Questions to Consider

After completing the activities above, consider the following questions:

How does controlling complement the planning efforts of an organization?
Why would managers not want to plan and control? What are some reasons?

Note that the learning activities in this course are ungraded, unless specified. They are designed to help you succeed in your assessments in this course, so you are strongly encouraged to complete them.

8.2 The Planning Process

The planning process involves 5-steps that follows a logical approach:

current status of organization, or where we are now (Step 1)
desired outcomes, or where do we want to be (Steps 2 and 3)
what steps do we take to get us there, and checking if we are on track (Steps 4 and 5).

See the steps below from section 17.2 of the course text. Note: the direction of the arrows in the diagram show that this is a continuous process and a journey.

Figure 8.1 The Planning Process Source: Adapted from H. Koontz and C. O’Donnell, 1972. Principles of management: An analysis of managerial functions. New York: McGraw-Hill, 113.

Activity: Plan Your Time!

First, read section 17.2 of Principles of Management. Then, take a couple minutes to apply the planning steps to a pressing matter for you. It could be planning your time to complete this unit, mapping out the next courses you’ll take, scheduling your errands for this week, or planning an ideal vacation for next year!

8.3 Types of Plans

There are many types of plans that organizations use on their journey to success (see list in Section 17.3). The type of plan utilized depends on many factors:

The type of organizational structure – mechanistic or organic structure (see notes on Unit 2 and unit 6)
Current organizational culture – hierarchical, team etc.
Long range strategic plan or short-term plan
Contingency plans – to deal with emergencies
Other unique dynamics the organization is facing
One time use or continual usage

The readings provide a detailed view and usage of the different types of plans.

Figure 8.2 Types of Plans from Management by Stephen P. Robbins and Mary A. Coulter

Activity: What Plan Do You Have?

First, read section 17.3 of Principles of Management. Then, refer back to your 5 step plan you created in the previous activity. What type of plan is it? For example, the steps you’ll take to complete this unit, will likely be repeated for the next unit. Consider the breadth, timeframe, specificity, and frequency of use of the plan you made.

8.4 Goals or Outcome Statements

Successful organizations have a goal statement that defines the results the organization seeks to produce. It describes the purpose, outcome, or activity that must be accomplished. A goal statement typically answers questions like:

What does the organization seek to accomplish?
Whom are we serving? What is the target population of the organization?
What specific measures will you use? How will you know that an improvement has been made?
What changes can you make that will result in further improvement?

Figure 8.3 Components of a Goal Statement. From Bujak, C. & Vecellio, P. What are goal and aim statements and why are they important? Wed, 08/12/2015.

Activity: What Is Your Goal?

First, read section 17.4 of Principles of Management. Then, refer back to your 5 step plan one more time. Create a goal statement that defines the results you seek to produce when implementing your plan.

8.5 Formal Organizational Planning in Practice

Despite the importance of long-range planning to the continued success of an organization, it may come as a surprise that some managers resist long range planning. This could be because planning involves too much time and resources, or it is too complicated a process. Some managers resort to in-process planning, which is in essence next step planning and far removed from the effectiveness of long-range planning.

Planning must be woven into the culture and fabric of the organization and does take time and effort. Some organizations employ a full-time long-range planner, while others use the services of an external long-range planner.

In planning, another question that comes up is the attainability of goals and the motivation level of the employees. If the goal is too high, team members will feel the goal is beyond their reach and will not put in their full effort. On the other hand, if the goals are easily attainable, team members will be unmotivated.

Activity: Goal Setting

Read section 17.5 of Principles of Management*. For further study on the discovering the balance in goal setting, read the following 3 articles. The first two articles deal with the two ends of the spectrum – setting very goals and setting unattainable goals. Article 3 provides thinking on balance.

“Why You Should Stop Setting Easy Goals” by Amitava Chattopadhyay, Antonios Stamatogiannakis, and Dipankar Chakravarti.
“Why We Set Unattainable Goals” by Haiyang Yang, Antonios Stamatogiannakis, Amitava Chattopadhyay, and Dipankar Chakravarti.
“What Separates Goals We Achieve from Goals We Don’t” by Kaitlin Woolley and Ayelet Fishbach.

8.6 Employees Response to Planning

Continuing from Topic 5, and our previous discussions on motivation in Unit 7, it follows that planning must factor in the “hearts and souls” or the emotional engagement of the team members. Planning is not about setting the goals and “squeezing” the best out of employees or “slave driving” them towards the goals. A sense of “buy-in” has to be created in the hearts of the team members. Managers use a variety of approaches to create this “buy-in” and to minimize employee disengagement with the goal: explaining the goals in simple language, breaking the goals down to smaller achievable units, creating and celebrating small wins, ensuring that goals are specific and measurable, creating a culture where you catch them doing the right thing (instead of the wrong thing like a policemen), conducting frequent feedback meetings, giving employees latitude on figuring out how to reach the goals, etc., are some of the techniques used by managers.

Activity: Engaging with Goals

Read section 17.6 of Principles of Management.

For further study, watch Trusting Teams | THE 5 PRACTICES by Simon Sinek as he explains the managers role in creating the right environment for emotional engagement of employees in reaching organizational goals.

Activity: Recapture Your Castle!

In this Strategy Simulation Game, players learn how to scan the internal and external environment, set goals and develop a strategy which achieves a “best fit” to the situation. It emphasizes the wisdom of “Know yourself, study your enemy and mind your surroundings.”

8.7 Management by Objectives

As we’ve discussed involving the employees in the planning, here in Topic 7 we deal with a specific planning and controlling instrument that also encourages and measures employee involvement – Management by Objectives (MBO). MBO is anchored in McGregor’s theory Y and Maslow’s theory of motivation.

Activity: Engaging with Goals

Read Section 17.7 of Principles of Management, as it provides a clear description of the MBO.

Next, watch the following video Management by Objectives for Managers for a simple presentation of MBO and its benefits to managers.

8.8 The Control-Oriented and Involvement–Oriented Approach to Planning and Controlling

In this topic we will discuss two approaches to planning and controlling:

Control-Oriented approach
Involvement-Oriented approach.

The control-oriented approach, as the name suggests, is driven by top management, while the involvement-oriented approach calls for participation of the team members across all levels of organization. The approach undertaken depends on the structure of the organization (see Unit 6 on mechanistic vs. organic structures). If the firm has a mechanistic structure, centralized, formal, bureaucratic approaches are the norms, then the firm will opt for a controlled-oriented approach to planning and controlling. However, if the firm has an organic structure, where decentralization, team-based responses, nimbleness are the norms, the firm will opt for an involvement-oriented approach to planning and controlling. Each approach has its advantages and disadvantages. Some firms use a hybrid or integrated approach that draws the best of both.

Controlled Oriented Approach		Involvement Oriented Approach
Advantages	Disadvantages	Advantages	Disadvantages

Activity: Case Study

Read the Critical Thinking Case (end of chapter 17) titled, “How Do Amazon, UPS, and FedEx Manage Peak Seasons?” and work through the 4 questions and consider what you would do in the situation. What ethical issues arise?

What do you think are some of the difficulties of adding 25 percent more employees for the holiday season? What kind of planning do you think would be needed?
China effectively shuts down for two weeks each year and celebrates the lunar new year. How does that resemble (or not) peak season in Western countries?
The case focuses on U.S. markets. How are European markets affected by holiday shopping?
Have your own shopping habits changed with the ease of online shopping? If so, how? Do you expect them to change when you graduate and have more disposable income?

Unit 8 Summary

In this unit we have had the opportunity to learn about the need for planning and controlling, and discussed why sometimes managers fail to plan. We also surveyed the different types of plans available to managers to effectively guide organizations in their endeavours and the impact of organizational structure and culture on these plans. As you complete this unit, consider how you can apply the planning process to your personal and professional contexts, the type of plan you will use in order to reach your goals, and explain your rationale for the choice of plan.

Personal Application

Before participating in the assessment for this unit, consider how you might apply what you have learned.

Assume you are leading/managing a: (a) small division in an organization, (b) small scale start up, or (c) ministry team in church.
You will pick one of these three scenarios, prepare a 3 – 5-minute video, addressing your team on the importance of one topic covered during this unit.
The 3–5-minute video to the team will emphasize the importance of applying this topic/ practice for organizational success and will include specific steps to motivate team members to implement these initiatives.

Please see the Assessments section in Moodle to confirm assignment instructions, including the grading criteria.

Checking Your Learning

Before you move on to the next unit, you may want to check to make sure that you are able to:

Describe the importance of planning and the elements of the planning process
Explain types of plans employed by organizations
Apply the planning process to a project in their organization
Explain when and how to use effective control mechanisms to ensure goals are reached
Identify when to use control oriented and involvement-oriented approaches in planning