The Nature and Purpose of Planning

The most basic of management functions is planning, the selection from among alternatives of future courses of action for the enterprise as a whole and each department within it. Every manager plans and his other functions depend upon his planning. Plans involve selecting enterprise objectives and departments goals and programs, and determining ways of reaching them. Plans thus provide a rational approach to preselected objectives.

As Billy E. Goetz has said, “a planning problem arises only when an alternative course of action is discovered.” In this, range, it is essentially decision making, although, it is also more than this. Indeed, choosing between alternatives may be the easiest part of planning. Planning depends on the existence of alternatives, and there are few business decisions for which some kind of alternative does not exist – even when it comes to meeting legal or other requirements imposed by forces beyond the manager’s control.

Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen. Although the exact future can seldom be predicted and factors beyond control may interfere with the best-laid plans, without planning events are left to chance. Planning is an intellectual process, the conscious determination of courses of action, the basing of decisions on purpose, facts, and considered estimates.

Production managers found early that, without planning, their mistakes showed up within days as production lines came to a halt through a misfit part or absence of a needed component. Also, well-managed companies have long planned to meet cash needs before their checks bounced.

Now, everyone plans. Enterprises of all kinds plan further into the future, plan more aspects of their operations, plan less by intuition or hunch, and lean more heavily on forecasts and studies.

Change and economic growth bring opportunities, but they also bring risk, particularly in an era of world-wide rivalry for markets, resources, and influence. It is exactly the task of planning to minimize risk while taking advantage of opportunities.

Every plan and its derivatives must contribute in some positive way to the accomplishment of group objectives. Plans alone cannot make an enterprise successful. Action is required; the enterprise must operate. Plans can, however, focus action on purposes. They can forecast which actions will tend toward the ultimate objective, which tend away, which will likely offset one another, and which are merely irrelevant. Managerial planning seeks to achieve a consistent, coordinated structure of operations focused on desired ends. Without plans, action must become merely random activity, producing nothing but chaos.

Topic #3

Committees

Whether referred to as a committee, board, commission, task group, or team, its essential nature is the same, for the committee is a group of persons to whom, as a group, some matter is committed. It is this characteristic of group action that sets the committee apart from other organization devices.

Some committees undertake managerial functions, and others not. Some make decisions, and others merely deliberate on problems without authority to decide. Some have authority to make recommendations to a manager, who may or may not accept them, while others are formed purely to receive information, without making recommendations or decisions.

A committee may be either line or staff, depending upon its authority. If its authority involves decision making effecting subordinates responsible to it, it is a plural executive (коллегиальный орган верховной исполнительной власти) and a line committee; if its authority relationship to a superior is advisory, then it is a staff committee (комитет персонала).

Committees may also be formal or informal. If established as part of organization structure, with specifically delegated duties and authority, they are formal. Or may be informal, that is, organized without specific delegation of authority and usually by some person desiring group thinking or group decision on a particular problem. Thus, a manager may have a problem on which he needs advice from other managers or specialists outside his department and call a special meeting for the purpose. Indeed, this kind of motivation, plus the occasional need for gathering together in one room all the authority available to deal with an unusual problem, gives rise to many of the numerous conferences in organizational life.

Moreover, committees may be relatively permanent, or they may be temporary. One would expect the formal committee to be more permanent than the informal, although this is not necessarily so.

However, the executive who calls his assistants into his office or confers with his department heads is not creating a committee. Although it may sometimes be difficult to draw a sharp distinction between committees and other group meetings, the essential characteristic of a committee is group action in dealing with a specific problem. The committee is in wide use in all types of organization.

The board of directors is a committee, as are its various constituent groups such as the executive committee, the finance committee, the audit committee, and the bonus committee. Occasionally, one finds a business managed by a management committee instead of a president. Moreover, at each level of the organization structure, one or more committees are likely to be found.

A group of people can bring to bear on a problem a wider range of experience than can a single person, a greater variety of opinion, a more thorough probing of the facts, and a more diverse training in specialized aspects. Most problems require more knowledge, experience, and judgment than any individual possesses.

One of the advantages of group deliberation and judgment, not to be obtained without an actual meeting, is the stimulation resulting from oral interchange of ideas and the cross-examination techniques of the committee meeting. This interchange has been found to be especially enlightening in policy matters. The results obtained by group judgment are superior to those obtained by individual judgment.

Topic#4