Week 13 Notes

Principles of Management
Organisational Planning and Controlling

 Planning Process
1. Developing Awareness of the Present State

Before an organization can set objectives or plan for the future, it must have a clear
understanding of its current situation. This involves:

 Assessing internal resources such as financial position, workforce capability, and

operational efficiency.
 Analyzing external factors like market trends, customer demands, competition, and
economic conditions.
 Conducting SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to
identify areas of improvement and potential risks.

This stage serves as the foundation for strategic planning by ensuring that goals are realistic
and aligned with the organization’s actual capabilities.

2. Establishing Outcome Statement (Goal Planning, Domain Planning, Hybrid

Planning)

Once the current state is understood, the next step is to define the desired future state. This is
done through different approaches to planning:

 Goal Planning:
o Focuses on setting specific, measurable, achievable, relevant, and time-
bound (SMART) objectives.
o Examples: Increasing sales by 20% in the next year, expanding market reach,
or launching a new product.
 Domain Planning:
o Involves setting goals for specific functions or departments within the
organization.
 o Example: The HR department may focus on employee retention, while the
marketing team sets digital branding targets.
 Hybrid Planning:
o A combination of goal planning and domain planning to ensure alignment
between overall organizational objectives and departmental goals.
o Ensures flexibility by integrating long-term vision with specific functional
goals.

3. Premising (Forecasting and Formulating Assumptions)

Planning involves making assumptions about the future, known as premises. These premises
help in decision-making by reducing uncertainties. This step includes:

 Forecasting:
o Predicting future market trends, customer behavior, and industry
developments based on past data and analytics.
o Example: Forecasting demand for a product in the next five years using
historical sales data.
 Formulating Assumptions:
o Establishing conditions that may affect business operations, such as economic
conditions, technological advancements, or policy changes.
o Example: Assuming inflation will rise by 3% annually and planning pricing
strategies accordingly.

4. Determining Course of Action

After establishing goals and assumptions, the organization needs to decide how to achieve
them. This step involves:

 Identifying Alternatives:
o Listing all possible courses of action to reach the desired goals.
o Example: A company may consider outsourcing, hiring in-house staff, or
adopting automation to improve productivity.
 Evaluating Alternatives:
o Analyzing the feasibility, risks, costs, and benefits of each option.
 o Example: Assessing whether investing in automation will yield higher
efficiency than hiring more employees.
 Selecting the Best Alternative:
o Choosing the most suitable option that aligns with organizational goals,
available resources, and market conditions.
o The decision should be cost-effective, sustainable, and strategically sound.

5. Formulating Supportive Plans

A well-structured plan needs additional supportive measures to ensure smooth execution.

This involves:

 Making Changes in Existing Plans:

o Revising previous strategies or adapting them to fit new business goals.
o Example: A company may shift from traditional advertising to digital
marketing based on market trends.
 Creating Supportive Plans:
o Developing contingency plans, operational procedures, and additional
strategies to assist the main plan.
o Example: A manufacturing firm preparing a backup supplier plan in case its
primary supplier faces disruptions.

 Deming Cycle (Shewhart) Cycle

The Deming Cycle, also known as the PDCA Cycle (Plan-Do-Check-Act), is a continuous
improvement model used in business management. It was popularized by Dr. W. Edwards
Deming and is often employed to improve processes and products. Here’s a quick overview:

1. Plan: Identify an area for improvement or a problem that needs solving. Develop a
hypothesis and create a detailed plan for implementing changes.
2. Do: Implement the planned changes on a small scale to test their effectiveness.
Collect data and document any observations.
3. Check: Analyse the data and evaluate the results of the implementation. Determine if
the changes are achieving the desired outcomes.
 4. Act: If the changes are successful, implement them on a larger scale and standardize
the process. If not, revise the plan and repeat the cycle.

This cycle encourages continuous evaluation and improvement, making it an essential tool
for quality management.

 Plans

 Standing Plan: This is a plan that is used repeatedly over time. It includes policies,
procedures, and rules. It's designed to handle recurring situations.
 Single-Use Plan: A one-time plan specifically designed to meet the needs of a unique
situation. It includes projects and programs and is discarded after its use.
 Organizational Plan: These plans focus on the overall structure and strategy of the
organization. They can be long-term or short-term, depending on the scope and nature
of the organization’s goals.
 Time Frame Plan: Based on the time period they cover, these plans can be short-term,
medium-term, or long-term. They help prioritize activities and set milestones for
achieving objectives within a specified period.
 Contingency Plan: Also known as a backup plan, this plan is designed to address
unforeseen circumstances. It ensures that the organization can quickly adapt to changes
or emergencies.

Hewlett-Packard (HP)Corporate Goal

Hewlett-Packard (HP) has a comprehensive set of corporate goals that guide its operations
and strategies. Here are some key aspects of HP's corporate goals:

1. Profit: HP aims to achieve sustainable profitability by delivering innovative products

and services that meet customer needs and drive business growth.
2. Customer: HP is dedicated to providing exceptional customer experiences and building
long-term relationships with its customers. The company focuses on understanding
customer needs and delivering high-quality products and services.
3. Field of Interest: HP's primary fields of interest include technology, innovation, and
sustainability. The company is committed to pushing the boundaries of technology and
creating solutions that have a positive impact on society and the environment.
4. Growth: HP strives for continuous growth by expanding its market presence, investing
in research and development, and exploring new business opportunities. The company
aims to drive innovation and stay ahead of industry trends.
5. People: HP values its employees and is committed to creating a diverse, inclusive, and
empowering work environment. The company focuses on employee development,
well-being, and engagement.
6. Management: HP emphasizes effective management practices and strong leadership
to drive organizational success. The company is committed to ethical business
practices, transparency, and accountability.
7. Citizenship: HP is dedicated to being a responsible corporate citizen by contributing
to the communities where it operates and addressing global challenges. The company
focuses on sustainability, social responsibility, and ethical business practices.

 Effect of goals on performance

The effect of goals on performance can vary widely depending on the type and difficulty
of the goals set. Here's a breakdown:

1. No Goal: When there's no goal, individuals often lack direction and motivation. This
can lead to lower performance as there is no clear target to strive for.
2. General Goal: Having a general goal like "do your best" can provide some motivation,
but it often lacks the specificity needed to drive high performance. Without clear criteria
for success, it can be challenging to measure progress and stay motivated.
3. Easy Goal: Easy goals are attainable and can boost confidence. However, they may not
push individuals to their full potential, leading to moderate performance levels. The
challenge might not be enough to maintain engagement over time.
4. Difficult Goal: Difficult goals can be highly motivating as they provide a significant
challenge. When people are committed and believe they can achieve the goal, it can
lead to higher performance. However, if the goal is perceived as too difficult, it may
lead to frustration and reduced effort.
5. Difficult Specific Goals: These are the most effective in enhancing performance.
Specific goals provide a clear target and criteria for success, while difficulty adds a
level of challenge that can boost motivation. When individuals have the resources and
believe in their ability to achieve these goals, performance tends to be highest.
In summary, goals that are specific and challenging tend to result in the best performance
outcomes, as they provide clear direction and a motivating level of difficulty.

 Control Process

Control is an essential management function that ensures an organization’s activities align

with its goals and objectives. It involves monitoring and regulating ongoing activities to
ensure they conform to established standards. Here are the detailed steps involved in the
control process:

1. Establish Standards

 Definition: Standards are the criteria against which actual performance is measured.
 Characteristics: They should be clear, specific, measurable, and aligned with the
organization's goals.
 Examples: Financial benchmarks like revenue targets, quality standards like defect
rates, or performance metrics like productivity levels.

2. Monitor Ongoing Organizational Behavior and Results

 Definition: This step involves the continuous observation and measurement of actual
performance.
 Methods: Various methods like performance appraisals, financial statements, audits,
and quality checks are used.
 Tools: Tools like Key Performance Indicators (KPIs), balanced scorecards, and
management information systems (MIS) aid in this process.

3. Compare Actual Behavior and Results Against Standards

 Definition: This step involves comparing the actual performance data with the
established standards.
 Analysis: Identify any deviations from the standards, whether they are positive or
negative.
 Techniques: Techniques like variance analysis and benchmarking are used to analyze
the data.
4. Evaluate and Take Action

 Definition: Based on the analysis, decide on the necessary corrective actions to address
any deviations.
 Actions: These can include making adjustments to processes, providing additional
training, revising standards, or implementing new strategies.
 Feedback Loop: The control process is cyclical; after taking corrective action, the
performance is monitored again to ensure the effectiveness of the action taken.