Introduction
The main role of a manager is to direct the efforts of other people towards the objectives of the organization. A very important part of management is planning (setting goals) and controlling (comparing results with goals that have been set).
The current organizational problems require effective solutions that even anticipate them. When solutions are structure-based they are rarely effective. This inefficiency lies in the fact that the model that has been established by the company is often obsolete, which makes the company adapt slowly to changes and it is not uncommon for the reasons to fall on variables such as: (Mintzberg, 1993).
- The systems are based on obsolete or outdated assumptions, the administrative style that is contrary to the established strategy. There is an absence of higher goals that link the organization from a common purpose. There is a refusal to deal concretely with "the problems humans ”and opportunities.
Why are planning and control important?
When we say that a company must set objectives, it seems that we are saying something totally obvious. After all, isn't it totally natural for an organization to have goals?
To understand the importance of planning, it helps to look at our own experience. When we start a new personal or professional project, do we set goals? Now, for example, you are reading this topic.
You have downloaded this file and perhaps found the topic interesting and worth reading. But have you set goals?
If we begin to think, we will realize that, in most cases, we are stubborn enough to set goals.
Generally, we do not stop to think about what we want to achieve, we do not set specific objectives. Paradoxically, we realize that setting goals is very natural and desirable, but when it comes to doing so, we are reluctant. It seems that it is enough to have concluded that something is worth starting and then we start it without setting goals.
This that usually happens to us personally also happens in organizations. It should not surprise us. In the end, the same person who is reluctant to set goals in their personal or professional decisions will also find that planning is, to some extent, unnecessary for their company or their department.
In fact, in many companies planning is still a purely formal exercise: a plan is established because it would be “unprofessional” not to do so, but it is not really taken very seriously. There is an implicit thought that the plan should not be taken at face value and that "what the plan says is one thing, what we actually do is another."
But then why do we plan? What happens to an organization that does not plan or does it in a formalistic way?
When there is no planning, we behave in a "reactive" way, that is, we make decisions as problems or needs appear.
We are not "proactive": we act only to the extent that there are things to solve. In reality, if there were no unforeseen or urgent problems, we would continue to do everything according to our routines, without changing anything. The problem is that by acting in this way, we are letting our organization go aimlessly. We will be solving the most worrying problems, without having a clear idea of where we want to go.
What is planning?
Planning tries to identify what objectives the organization wants to achieve and how. The planning process is usually written because this way it is much easier to communicate plans and discuss them unambiguously. Within a plan, the following are established:
- Objectives: specific goals that the company wishes to achieve (increase profitability from 5% to 15%, increase market share from 20% to 30%, etc.) Specific actions that should allow the company to achieve its objectives. Allocation of resources: how the necessary financial resources will be obtained to carry out the actions. Implementation guidelines: distribution of tasks between the different actors and execution schedule.
At the beginning, strategic planning was basically financial (five-year budgets) and was done under the assumption that the environment would be stable in the future. Little by little, the importance of the environment was taken into account, and the need to have a strategy against that environment before even drawing up the budgets: the need to debate the strategic options before adopting the budgets. Finally, there has been a growing awareness of the need to give all employees the tools that allow them to contribute to this strategy (this is what is called "strategic direction").
There are two planning horizons:
- Long-term plans (strategic planning): have a variable duration (depending on the company) but the most normal is that they are about 5 years. Short-term plans (tactical planning): 1-2 years.
Strategic planning:
It establishes the general planning guidelines, serving as the basis for the other plans (tactical and operational). It is designed by the highest ranking members of the company and its function is to govern the obtaining, use and disposition of the necessary means to achieve the general objectives of the organization. It is long-term and encompasses the entire company.
Strategic planning is the process of selecting the goals of an organization, determining the policies and programs necessary to achieve the specific objectives that lead toward the goals, and establishing the methods necessary to ensure that strategic policies and programs are implemented..
characteristics
It deals with fundamental questions. Strategic planning gives answers to questions like the following. What business are we in and what business should we be in? Who are our customers and who should they be?
It offers a frame of reference for more detailed planning and ordinary decisions. When faced with such decisions, the manager will ask himself: What options will be the most appropriate with our strategy?
Assumes a longer time frame than other types of planning
Helps direct the organization's strategies and resources toward high-priority activities
It is a high-level activity in the sense that senior management must be actively involved. This is because only she has the vision to consider all aspects of the organization.
Core items
- Study the company Evaluate the environment Set objectives Determine the strategies to follow
For a strategic plan to be effective, it must have certain properties:
- Pro activity: the plan must be a tool to carry out a series of actions that improve the operation of the company.Congruence: the plan must adjust to the characteristics of the organization and the environment.Synergy: the plan must help to integrate in the best possible way the efforts of the different departments or areas of the company, in order to achieve the objectives in the best possible way.
Tactical planning:
It determines more specific plans, which refer to each of the company's departments and which are subordinated to the strategic plans. It is established and coordinated by mid-level managers (functional managers), in order to put the company's resources into practice
Tactical planning, which is the median between intensive and extensive planning, spans one to two years and relates to a series of tactics or programs by virtue of which line managers will attempt to fulfill the corporation's strategy. Tactical planning often manifests itself in a management by objectives program
Tactical planning is developed at the department or division level and has a short-term horizon. This planning must define:
- Activities to be carried out in the department Deadlines for completion of these activities Resources necessary for the division to carry out these activities
What aspects can tactical planning affect?
- Division of work: you can change the division of tasks to achieve priority objectives or create new tasks according to needs. Budgeting.
Operational planning
It is governed according to the guidelines established by tactical planning, and its function consists of the formulation and assignment of more detailed activities that must be executed by the last hierarchical levels of the company. In general, it determines the activities that the human element must develop. The operating plans are short-term and refer to each of the units into which an area of activity is divided.
Operational or budget planning, the most intensive form of planning, is the expression in financial terms of the company's tactical plans or management program by objectives. These plans take the form of proforma, monthly or quarterly financial statements, or expense budgets. The period they cover is generally one year divided by months or by quarters, adding a quarter as the year progresses. In some cases, companies always have a budget for the next twelve months.
No manager can successfully organize, direct, and control for long unless he has made plans first.
Effectiveness
For planning to be effective, it is necessary to review the answers to the following questions:
What action is necessary?
Why?
Where?
When?
Who should do it?
How should it be done?
Stages to plan
- Understand the problem Obtain complete information about the activities involved Analyze and classify the data Formulate planning premises Formulate alternative plans Choose the plan Provide in detail the succession and direction of operations Monitor how the proposed plan progresses
Steps in the planning process
Planning is very simple and can be condensed into 4 basic steps. These can be adapted to all planning activities, at any level of the organization.
- Establish a goal or set of goals. - Planning begins with decisions about what the organization or sub-unit needs or wants. Without a clear definition of goals, organizations will distribute their resources too broadly. Determining priorities and being specific about objectives will allow you to channel your resources effectively. Define the current situation. - How far is the organization from its goals? What resources are available to achieve them? Only after analyzing the current state can plans be drawn to describe progress. The open lines of communication within the organization and between its units provide the information that is needed Identify the supports and barriers of the goals.- What factors in the internal and external environment help the organization to achieve its goals? What factors could create problems? It is easy enough to see what is taking place in the present moment, but the future is never clear. Develop a plan or a set of actions to achieve the goal or goals. - This last stage in the planning process requires several alternate courses of action to achieve the desired goal or goals, evaluate the alternatives and choose the most suitable among them to reach the goal. This is the step in which decisions regarding future actions are made and in which the guidelines for effective decision-making are most important.Develop a plan or set of actions to achieve the goal or goals. - This last stage in the planning process requires several alternate courses of action to achieve the desired goal or goals, evaluate the alternatives and choose the most suitable among them to reach the goal. This is the step in which decisions regarding future actions are made and in which the guidelines for effective decision-making are most important.Develop a plan or set of actions to achieve the goal or goals. - This last stage in the planning process requires several alternate courses of action to achieve the desired goal or goals, evaluate the alternatives and choose the most suitable among them to reach the goal. This is the step in which decisions regarding future actions are made and in which the guidelines for effective decision-making are most important.This is the step in which decisions regarding future actions are made and in which the guidelines for effective decision-making are most important.This is the step in which decisions regarding future actions are made and in which the guidelines for effective decision-making are most important.
Critical factors when planning
Strategy
We understand by strategy, all those actions that are planned by a company in response to, or in anticipation, to changes in its external environment, its consumers, its competitors. The strategy represents the way in which a company seeks to improve its position against the competition, perhaps through low production or distribution costs, perhaps by providing greater value to the consumer, or by achieving dominance over sales and services. In other words: "This is how we will generate an original value."
"Structure follows strategy" is the foundation of organizational wisdom.
The systems
By system we understand all the formal and informal procedures that make the organization work from year to year: budgeting, capital investment, training, accounting procedures for costs, budgeting, production, human resources, etc. This variable should be the dominant one, since if you want to understand how an organization achieves its objectives, its Systems should be observed.
For many managers the word "system" leads to an understanding of a hustle concept; however, it is surprising to see how changes in systems can so strongly reinforce organizational effectiveness.
The style
Personalities do not change, or at least that is what popular wisdom holds, one of the elements of an administrator's style is how he chooses to distribute his time, there are an infinite number of things that administrators must devote their attention to, No top executive meets all the demands on his time; According to Henry Mintzberg, seniors do not meet all the demands on their time and the median time spent on any aspect is only 9 minutes.
What can an executive do in 9 minutes? Comment on what you have in mind, reinforce a message, direct people's thinking in a certain direction; This ability is a very transcendent agent of change. It is also due to the fact that personality influences the executive's "symbolic" behavior or style.
the staff
The personnel dimension will be channeled not only towards something more enjoyable and worthy of being controlled in practical terms by a human resources administrator, the personnel should be considered as a source of resources that must be nurtured, developed, protected and properly located; it is not uncommon to hear things like "get a good structure and people will adapt automatically" or "do not expose the organization to people" or lean the other way such as "the right people make any organization work well"; in no case are these positions correct; people count, but staff is only one of 7 variables.
The abilities
It allows us to capture the particular attributes of a company. The extraordinary attributes or capabilities of each organization is what is known as ability. We constantly observe that organizations facing large discontinuities in business conditions require more than a simple shift in strategic focus, they often need to incorporate a new skill, this need for extraordinary capabilities is usually lost when strategy changes or changes. of structure; it is important to have dismantled the skills to be replaced to add a new one.
Higher goals
The word "higher" literally means "something of the highest order." By higher goals we will understand concepts that serve as a guide, a set of aspirations, not always written, that go beyond the conventional statement of corporate objectives. Higher goals are the fundamental ideas around which a business develops, they are its core values, they are the general notions of the future direction that the management team wishes to infuse throughout the organization.
They convey meaning to people, and conveying meaning is one of the main functions of leadership.
Management planning and control systems
Huge progress has been made for 20 years in terms of knowledge that underpins organizational planning. Modern research on corporate structures has started with Chandler's Strategy and Structure; however subsequent research focused beyond just structure, on the expansion of organizational attributes. Every organization consists of: Objectives, based on strategies and established by stages of development; Structure, Processes, Systems and Personnel.
Normally this work is carried out in close collaboration and coordination with the senior executives of the organization. And the main objective is that the client can manage a Planning and Administration of their business to achieve their higher goals, which could be: achieve projected cash flows, profitability or return on investment, etc.
A deep analysis of the scheme of the 7 circles that will serve as a foundation or basis for the planning process should be made, the reasons for this constitute the starting point for the development of a new planning process, which leads to having accessibility to company managers, their strengths and weaknesses. To name a few:
- Coordinate the planning of activities separately in the optimal plan for the total activity Planning approach over a multi-year horizon Provide top management with alternatives for their timely decision Coordinate capital expenditure planning and capital expenditure planning operations; Provide a baseline measurement of business performance that will be used to identify areas that require special management attention on an ongoing basis; Encourage managers to plan for a reasonable range of future conditions; Empower senior management to set planning goals for subordinates.
The essence of this work is to identify the company's systems management controls, either for a) the entire company or corporate, b) one of its companies or departments, or c) one of its major development projects. To do this, generally:
Analyze the degree to which the company is complying with its control systems.
The data obtained by these judgments will allow us to analyze them and therefore we can formulate specific conclusions and recommendations that will include improvements in the previously evaluated management systems. (Schwab, 2011)
The structure of organizational systems
Since the turn of the century, our thinking about organizational structure has been dominated by the "one better way" approach. There is always a correct and incorrect way to design a system, an organization, so the approach should be "everything depends on…", where organizational structures must reflect the real and current situation of the company. Control, types of formalization and decentralization, planning systems, as well as structures in general should be logically configured into consistent groups and not independently.
The basic parts of the organization as a system (Tapia, 2011)
- Core of Operations: Base of any organization, operators and basic production and service jobs Strategic apex: Full-time administrators, where the system is monitored Middle line: A hierarchy of authority between the core of operations and the strategic apex (managing directors) Techno structure: Analysts who perform administrative tasks; also called staff. Administrative support: Units of various types to provide internal services (legal advice, public relations, etc.) Ideology: Traditions and beliefs of an organization (that is, a well-supported or firm “culture”). Figure 2.
Basic coordination mechanisms
Mutual adaptation
Achieve work coordination through the simple process of informal communication. People do work with each other to coordinate. It occurs in the Core of Operations, it is a mutual adaptation and it is the simplest of organizations. It is the only reliable vehicle when you are in extremely difficult conditions.
Direct supervision
One person coordinates by giving orders to others, it arises when a certain number of people have to work together. From the strategic apex to the core of operations, the manager becomes a leader.
Standardization of the work process
Procedures to follow, the analysts schedule the work of the different people to coordinate it rigorously. It occurs from the Techno structure to the Operations Core. It is also a synonym for specification or programming.
Standardization of results
Measure the results. It occurs from the Structural Techno section to a specific area or section of the Operations Core, and measures part of the process always focused on results.
Skills standardization
A standardization of the worker is sought; It is the acquisition of knowledge and skills to be applied at work. It occurs outside the organization and causes those inputs from the Operations Core to apply to performance and it can be determined what to expect from them.
Standards standardization
Workers share a series of common beliefs and therefore manage to coordinate based on them. It occurs in the Core of the Organization.
As organizational work becomes difficult and complex, the favored means of coordination seem to shift, from mutual adaptation to direct supervision, then to standardization, preferably of work processes or norms, results or results. skills, to eventually return to mutual adaptation.
What is the control?
Controlling means comparing the results we have obtained with the plans we had made and correcting the differences. For the control to work properly, you need:
- That the objectives to be achieved have been clearly communicated to all employees. That information is collected on the real events. This is expensive for several reasons:
Loss of time (opportunity cost)
The opportunity cost is understood as the cost incurred when making one decision and not another. It is that value or utility that is sacrificed for choosing an alternative A and neglecting an alternative B. Taking a path means that the benefit offered by the discarded path is renounced.
In every decision made, there is an implicit waiver of the utility or benefits that could have been obtained if any other decision had been made. For each situation there is always more than one way to approach it, and each way offers a greater or lesser utility than the others, therefore, whenever one or another decision is made, the opportunities and possibilities offered by the others will have been renounced. that may well be better or worse (higher or lower opportunity cost).
The opportunity cost is especially important in companies, since every day they must make decisions in a demanding environment that offers multiple possibilities and alternatives.
Whenever an investment is going to be made, there is the dilemma and uncertainty of whether it is better to invest in one option or another. Each option brings with it advantages and disadvantages, which must be carefully evaluated to decide which one allows a lower opportunity cost.
Danger that some employees distort the information.
This happens when the media or those in charge of communication present their public with information different from that obtained from an evaluation.
Often, the distortion is produced by giving biased information, highlighting secondary aspects and disguising or omitting essential aspects of it, which would allow the public to get an incorrect idea of the real content of the results.
The result is deception, the purpose of which is to induce someone to believe what is not true, using apparent and feigned words or works.
Control components:
- Control of activities: for each of the scheduled activities, it is a matter of checking whether it is being carried out correctly and according to the established deadlines. Control of results: it is a matter of comparing the results obtained with those planned. Comprehensive management control: synthetic information on the results that are produced for senior management.
A control system is necessary in any organization since the activities of the different divisions, departments, sections, etc. they must be coordinated and controlled. Most control systems have moved from orientation to action and are therefore inefficient or not. For example, there is little an employee can do today to correct the results of actions taken two weeks ago.
The Management (main strategic apex), on the contrary, has adjustments oriented towards the future and allows the necessary adjustments to regulate the control of the analysts and thus establish a more motivating climate for the employee.
Furthermore, although many standards or controls are simple estimates of what should happen if certain assumptions are correct, they acquire a precision in today's control systems that leave little or no room for error. Managers would be better off setting a range rather than an exact number and changing the rules as time passes and testing wrong hypotheses. This would be more fair and positive in motivating employees. There are three fundamental beliefs that underlie most successful control systems.
- First, planning and control are the two most closely related to management functions Second, the human side of the control process should be highlighted as much as, if not more so, than the scope of tasks Finally, evaluation, training, and reward are more effective in the long run than measuring, comparing, and pressuring or punishing.
Few managers realize that a business plan must provide the framework for the company's control system. If the missions, goals, strategies, objectives and plans change, therefore, the controls must change. Unfortunately this rarely happens. Despite this error that occurs at the top (strategic apex), the repercussions are felt at all levels.
Often, too, the standards of control systems are derived from prior years' budgets and not from current company goals, the result is that lower-level employees are simply "pawns" based on factors who have little knowledge and over which they have practically no influence (direct supervision is not fulfilled).
This is based on the relationship between Planning and control.
Where:
|
Planning |
Control |
| Set goals | Set standards |
| Determine activities | Measure and compare |
| Delegate | Evaluate results |
| Create homework schedules | Feedback and coaching |
| Locate resources | Take corrective actions |
| Communicate and coordinate | |
| Provide incentives |
The above schematically shows the important relationships between planning and control, as can be seen, the control process does not start after the planning process ends, as most managers believe.
Planning and Organization of two management / administration functions have been the most popular areas of research in recent years. Control, the third management function, has received surprisingly little attention. But as noted above, managers must carefully consider the behavioral aspects of the process when designing a control system if employees are to be motivated to accomplish assigned tasks. (ACCEL., 2010)
The scheme of the 7 circles
In theory, all administrators and consultants know that an organizational process involves much more than a graph with its squares, dotted lines, job descriptions and other things that could illustrate it; however, we often behave as if we don't know; if we want a change we modify the structure; even though this is important, since we have the conviction that a productive change in an organization goes beyond the structure. It is not as simple as the interaction between strategy and structure, since strategy is too critical. Our central idea is that the effectiveness of an organization depends on the interaction of several and different factors, and is established in the following figure.
Goals
- The multiplicity of factors that influence the ability of an organization to change its own way of changing The diagram presented, aims to convey the notion of interconnectivity of variables, the idea is that if significant progress is made in an area, without advance the rest. Fortune magazine, in an article on strategy, comments that the proportion of strategies that once carefully planned will not work may rise by as much as 90%. What would cause a lack of attention in the other circles. The figure does not have a starting point, but it does have a point of convergence, so it cannot be determined which is the driving factor towards change in an organization.
The central problem in structuring is not the one where most organizational designers waste their time - that is, how to divide tasks. Better to point out, which is a matter of emphasis and coordination - how to get everything to work well. The challenge lies in developing the ability to focus on those areas that are preponderant for the evolution of the organization and thereby refocus them towards the appropriate change. (Waterman Jr, 1980).
Planning and control in practice
Characteristics of the systems planning and control process
The first is that it must be a participatory process, that is, we must give active participation to the members of the organization from the strategic to the operational levels in order to contribute commitment and collaboration and in this way create a competitive advantage
The second characteristic that is important is that it must be flexible and by flexible we mean that it must attend to the principle of discontinuity of the process. What is that? As the control process is carried out, it is exposing deviations between what really happened and what had been planned, then the plan is stopped, the corrections are applied and action is returned.
Planning and control in practice
That said, we will see the concepts of planning and control in action.
The first thing we must do is that we have to define the strategic framework, we are going to give the organization an identity, the client must appreciate when he reads this framework where the organization is going, what are its dreams, what are its products, its businesses, etc. This through the statement of the mission, vision and strategic objectives that will be long-term.
Mission vision
From when the above was created, we will develop the strategies; In other words, the set of actions that will allow us to comply with the strategic framework.
Strategies
Then we will create the tactical objectives; in other words, the middle levels will have to define their management objectives.
Tactical objectives
Then we will define the operational objectives with which we will establish the budgets, we will translate into numbers all the efforts that we will be making.
Operational objectives
And then we get into action. The organization begins to roll, begins to fulfill its leading role in the environment in which it is located. Also called Management.
Management
Finally, for this process to be complete, worthwhile, it makes sense, the last stage is developed, which is fundamental, that is, management control, we must know if the strategic framework is in force or not if the strategies are adequate if the objectives are no longer valid. If management is efficient and effective, this is also called feedback.
Control
With the feedback we will apply the principle of discontinuity where we detect a deviation, correct and return to action.
Planning and control of administration systems
conclusion
Management is the process of efficiently organizing the use of scarce resources to achieve predetermined goals. While Mintzberg lists the management functions and grouped them into planning, organization, staffing, leadership, and control, all of these tasks are interrelated. But fundamentally, planning has a significant impact on all of them.
Planning and control are practically inseparable. Planning without control is useless and without control planning is pointless. That is what can be said to be "Siamese twins" from management. Plans make sense if people intend to achieve them and make real efforts to achieve them.
The only way to know if these efforts are leading to the desired direction, if the plans are being carried out, is through monitoring.
Planning and control are inseparable and some people treat them as one. Despite the fact that the two processes are analyzed and evaluated separately, it is important to be aware that this indissoluble relationship exists. (Nigeria., 2008)
Finally let us remember this strawberry that prays: whoever does not invest energy when planning must invest it when executing; That is, if we do not invest time in planning what we want, where we want to go or what our objectives are, then we will have to take time when the company is already working, that is, we will not only invest energy and time to see what is carry out daily activities but we would also be wasting time in checking that what is being done is the right thing to do, checking if what the market demands is happening or if one agrees with the actions that the company is performing.
Cited works
- ACCEL., TD (11 of 02 of 2010). Management Planning and Control Systems.Mintzberg, H. &. (1993). The Strategic Process. Concepts, contexts and cases. Englewood Cliffs: Prentice Hall, Nigeria., NO (February 9, 2008). National Open University of Nigeria's Online Course Library. Retrieved from www.nou.edu.ngSchwab, A. &. (February 8, 2011). Anderson & Schwab - Bussines Consultants.Tapia, FA (24 of 03 of 2011). Gestiopolis. Obtained from http://www.gestiopolis.com/administracion-estrategia-2/planeacion-control-sistemas-organizacionales.htm Waterman Jr, RH (1980). Structure is Not Organization. Business Horizons. Indianapolis, Indiana, USA.
