Wal-mart, the largest retailer in the world was established in US (Arkanas) in the year 1962 by Sam Walton, and grew steadily with sales figure of $218 billion and some 4500 stores by 2002. In the early stages Wal-mart operations were confined to the United States, where it established a competitive advantage based upon a combination of efficient merchandising and progressive human relations policies, probably taking a leaf out of the book of F.W Taylor.
Wal-mart was among few of the companies to implement information system to track product sales and inventory. Among some of the other successful strategies Wal-mart implemented were sharing widespread stock ownership among employees and pass on some of its benefits as low prices on to the consumers. With having substantial market share in general merchandising where it already had huge market presence, allowed the company to successfully foray into food retailing and make a huge dent in the market share of some of the established supermarket.
The competition in the domestic market by the year 1990 made Wal-Mart to think of expanding and by 1995 they were already present in 50 states of USA and by the year 2000 the company decided to go Global as they could sense saturation in the US market.
Going global was not such a smooth sailing though for the company, the critics wrote them off saying Wal-mart is to American a company to succeed in the global market. They predicted that constraints of Infrastructure, logistics and different consumer preference and some well established retailer’s presence would make it difficult for the company to succeed globally.
Unperturbed by the perceived constraints Wal-mart started its global venture in 1991 by opening its first store in Mexico, as a joint venture with Cafera, one of the largest retailer stores in Mexico. As predicted, Wal-Mart made a number of mistakes that seemed to prove the critics right. Poor infrastructure, crowded roads and a lack of understanding with local suppliers, many of whom could not or would not deliver directly to Wal-Mart stores or distribution centres resulted in stocking problems and raised costs and prices .There were also problem with merchandise selection as most of the items housed in the Mexican shop were similar to that of/in the US, which did not go too well with the Mexican market.
Learning from its mistakes Wal-mart adapted itself well to meet the local environment requirement and needs. Some of the initiatives taken by the company to resolve the current crises included:
o A partnership with a Mexican trucking company which helped the company to dramatically improve their distribution system.
o A more careful approach towards stocking practices meant the stores sold merchandise that appealed more to the local tastes and preferences.
These strategies started paying rich dividends to the company and in the year 1998,Wal-mart acquired a controlling interest in “Cifera” and by the year 2002 Wal-mart was more then twice the size of its nearest rival in Mexico with 600 stores and revenue of more then $10 billion.
With some great results in Mexico, Wal-mart followed the same strategies and subsequently entered into eight other countries. It entered into JV partnerships with other retailers in Canada, Britain, Germany, Japan and South Korea .In Brazil, Argentina and China Wal-mart established its own stores. As a result the company had over 1200 stores outside the United States, 303,000 associates and generated international revenue of more then $35 billion.
Wal-mart continued its steady growth globally in spite of the few early difficulties it faced, and registered high growth rate.
o In 2004 Wal-Mart generated over $256 billion in global revenue, establishing a new record and adding more than $26 billion in sales. The Company earned almost $9.1 billion in net income and grew earnings per share by over 15 percent.
o Subsequent to fiscal year-end 2004, in February 2004, the Company completed its purchase of Bompreco S.A. Supermercados do Nordeste (”Bompreco”), a supermarket chain in northern Brazil with 118 hypermarkets, supermarkets and mini-markets. The purchase price was approximately $300 million.
o In 2006 Wal-Mart net sales rose 9.5% to a record $312.4 billion. Net income rose 9.4% to a record $11.2 billion. Our earnings per share grew double-digits from $2.41 to $2.68 per share.
o In 2006, Wal-mart were doing around 20% of there business abroad. Wal-Mart’s marketplace is clearly the world.
o Wal-mart has total International portfolio divided among three of the Geographical locations(The Americas, Europe and Asia) with Americas – 71%, Asia – 17%a and Europe – 12%
While store development and expansion has experienced significant growth, it is not the only measure of success. The division has posted impressive financial results as well. Wal-Mart International announced that 2007 fiscal year end sales reached $77.1 billion, a 30.2 percent increase over the previous year, and that operating profit rose to $4.2 billion, an increase of 21.5 percent over the prior year.
Looking at some of the key information pointers above, Wal-Mart U.S. expects to open over 305 new, relocated or expanded units in the fiscal year ending January 31, 2007. Wal-Mart International plans to open over 220 new, relocated or expanded stores in the fiscal year ending January 31, 2007. The company further plans to continue acquisitions where they can add strategic value to the business.
In the year 2007 Wal-Mart were hit by twin turmoil’s in the housing and credit markets, which further fuelled there, reason to look beyond U.S. and identified India as one of the potentional growth market. Wal- Mart which already pulled out of Korea and Japan this year, were constantly on a look out to enter the India Market and there reasons were quite obvious.
India being one of the emerging markets was an obvious choice for Wal-mart with an estimated 12 million kirana shops in India. Of these, the largest consumer-goods companies in the country are only able to service less than 10% of them. This means that 90% of these small stores are not directly serviced, providing a large and new market opportunity for the joint venture. However entering a country through the wholesale channel will be the first time for the Wal-mart globally.
After years of looking for a way into India’s fast-growing but highly protected retail market, Wal-Mart Stores Inc. is trying a backdoor approach teaming up with an Indian phone company Bharti Enterprises to court the country’s burgeoning middle class. India’s Bharti Enterprises plans to invest up to $2 billion to $2.5 billion by 2015 in setting up a nationwide chain of supermarkets and retail shops in partnership with U.S. chain Wal-Mart. Together, they will set up 15 wholesale cash-and-carry stores over the next seven years. Focusing on the wholesale segment is Wal-Mart’s best immediate option, given that India restricts direct foreign investment in consumer retailing. Despite obvious cultural and business challenges, Wal-Mart International has experienced success because of its ability to transport the company’s unique culture and effective retailing concepts to each new country. The company makes a concerted effort to adapt to local cultures and become involved in the local community. Associates respond to customer needs, merchandise preferences and local suppliers. By serving each hometown in the same way, Wal-Mart International has realized significant growth with potential for much greater development worldwide.
In 2007, Wal-Mart International has opened around 320 to 330 units in existing markets. Relocations or expansion of existing stores has accounted for approximately 30 of these units, while the remainder represents new operating units for the company.
In the coming year 2008, The Company projects its capital spending in fiscal 2008 to increase by approximately 2 to 4 percent, which compares to the 15 to 20 percent increase forecast for fiscal 2007, Wal-mart, believes that capital spending in the U.S. will be approximately flat to the current fiscal year. This reduction in growth is expected to result from: building fewer U.S. units; anticipated flattening of construction costs; improvements in the distribution centre network; and design efficiency.”
Express Company Business Management Principles
February 10, 2012
Executive summary
Its revenues made up US $139($184) billion, assets equaled $62($82) billion, and the number of employees reached more than 30,000 people in 20 countries around the world.
While Enron Corporation was so highly praised by the outside observers, internally it had highly decentralized financial control and decision-making structure, which made it practically impossible to get coherent and clear view on corporations’ activities and operations. Of course, the problem was not exclusively due to poor managerial performance, all the departments of the corporation were involved in the ruining corporate ethical values and principles, but executives and managers bear primary responsibility for the absence of corporate culture, clear accountability and transparence of the company. If operations management worked properly, in its full force, and if it was given possibility to work in such a way, there could be a chance of escaping the tragedy.
Enron Corp brief history
Enron Corporation was one of the largest global energy, services and commodities company. Before it filed bankruptcy under chapter 11, it sold natural gas and electricity, delivered energy and other commodities such as bandwidth internet connection, and provided risk management and financial services to the clients around the world.
Enron was based in Houston, Texas, and was founded in July 1985 (though company with Enron name emerged still in 1930 (Swatz, Watkins, 2003)) by the merger of InterNorth of Omaha in Nebraska, and Houston Natural Gas. Enron Company quickly developed from merely delivering energy to brokering energy futures contracts on deregulated energy markets. In 1994, the company started to sell electricity, and in 1995, it entered European energy market. By the middle 2001, Enron employed about 30,000 people globally (McLEan, Elkind,2003).
Questionable accounting methods and techniques provided Enron with possibility to be listed as seventh largest United States company and was expected to dominate the market which the company virtually invented in the communications, weather and power securities (Bryce, 2002). But instead the corporation became the largest corporate failure in the global history and an example of well-planned and institutionalized corporate fraud. Enron became wealthy due to its pioneering marketing and promotion of power and communications bandwidth services and risk management derivatives, including such innovative and exotic items as weather derivatives.
In 1999, Enron launched an initiative of buying and selling access to high-speed Internet bandwidth, and also Enron Online was launched as a Web-based trading site, making Enron e-commerce company. In 2000, the reported revenues of the company made $101 billion. It had stakes in almost 30,000 miles of gas pipelines, either owned or accessed 15,000 miles of fiber-optic network and had stakes in global operations on generating electricity (Thomas, 2002).
In the result, for five years in a row, from 1996 to 2000, Enron was named “America’s most innovative Company” by Fortune magazine, and headed the list of Fortune’s “100 best companies to Work for in America” in 2000. Enron reputation was undermined by rumors on bribery and political pressure with the objective of securing contacts in South and Central America, Philippines and Africa. The Enron was blamed to use its connections with Clinton and Bush administrations to express pressure in their contracts. The events were followed by a series of scandals involving irregular accounting methods bordering on fraud which involved Enron and Arthur Andersen accounting firm and led Enron on the verge of undergoing the largest bankruptcy in economic history in November 2001 (Emshwiller, Smith, 2001).
Since Enron was always considered a blue chip stock, the bankruptcy was a disastrous and unprecedented event in the global financial world. Enron’s downfall was definite when it was found out that a considerable share of its profits resulted from deals with so-called special-purpose entities, limited partnership under control of Enron. It resulted in the possibility of not reporting many of the company’s losses in its financial statements. The final plan of Enron’s bankruptcy included creation of three new businesses which would be spun off the company.
The reorganization process started in 2003 with the creation of three companies – CrossCountry Energy, Prisma Energy International, and Portland General Electric. CrossCountry Energy was sold to CCE Holdings L.L.C., with the money to be used for the repayment of the debts, while Prisma Energy International and Portland General Electric should emerge as independent companies descendant of Enron (Swatz, 2003).
Operations management scope of functions
To understand the reasons of this bankruptcy and the level of managerial implication in the quality performance of the company, particularly that of operations management, it is necessary to outline the main functions of operations management and impact it should have of functioning of the organization.
The principal task of operations management is effective transformation of inputs into “desired outputs” of the company (Shafer, 1997). The outputs are traditionally understood in manufacturing and profit-making context within the organizations. But recently it has been recognized that operations management is a discipline which is not limited with such narrow functions; it can be deployed in practically any area where the organization aims at achieving its objectives (Barnett, 1996). For instance, non-profit or public sectors have to learn to optimize their internal operations and processes in the situation of limited resources; service companies come to conclusion that by reappraising their delivery process they can revolutionize and significantly improve their approach to manufacturing companies and their marketplace. Robin Wood (2001) gives the example of such operations management implication in Daewoo company, which understood that it can specialize and differentiate its product by adding definite bundle of benefits to its product which includes additional supporting services. Operations sector is the heart of these changes that are made by leading companies to improve their performance and increase customer base.
The survival of commercial company depends on ability of the organization to focus and shape its operational resources to meet the expectations of its stakeholders: customers, employees and shareholders, expressed in organizational strategy (Russel, 1995) . Irrespective of economic sectors the company operates in, the ability of operations management of this company to fulfill those above-mentioned tasks depends on their understanding that it is necessary to make trade-offs. They cannot avoid the situation of working under constraints and have to understand their capabilities and constraints to provide significant inputs into strategic decision-making process involving further resources of the organization.
Operations managers in the organizations are not empowered to make strategic decisions, but they play important role in shaping the organization’s strategy and contribute to the strategic thinking ( Pasternack, Viscio, 1998). Operations managers should be able to translate strategic aims and objectives into clear operational objectives and actions and to implement, design and improve the products of the company themselves and the processes of their delivery. They have to know how changes incorporated to external factors influence the operation and how changes in one aspect of the operating system influence other aspects.
Also, operations managers need to know how technological changes impact organization’s capability of delivery, and to incorporate their conclusions into strategic process (Peters, Waterman, 1982). Therefore, the heart of operations thinking includes the ability to think dynamically and systematically across time and space (Miller, 1998). Besides traditional tasks of operation management, new perspectives and objectives emerge connected with the emergence of new trends and developments of operations management, such as total quality management, shop floor control, global supply chain management, manufacturing planning software, and others.
Total quality management has become one of the most important developments of the operations management. The quest for higher level of products and services quality is caused by the globalization of markets, on the one hand, and increasing litigation over service or product failure. The relationship between quality and market share performance is doubtless. Those firms that fail to understand the issue of quality find themselves on the bottom of their industry hierarchy. A significant share of the responsibility for quality standards rests on the operations manager. Global supply chain management is another very important component of operations management. The world economy is becoming more global than ever. Looking for lower production costs, more flexibility and local risk reduction, companies are seeking to outsource and produce services and products on global scale (Heizer, 2004). Operation managers are responsible for fulfilling the task. Project management is yet another task of the operations management department. Operation managers bear responsibility for numerous projects which range from considerable capital projects to specific ones such as installation of new information system.
Effectively managing projects involves fulfillment and delivery them in timely manner and within the budget (Stevens, 2001). In a word, operations management is indispensable component of the organization, since it fulfills numerous important functions of the company. Operations manager handles daily running and functioning of the organization.
The implication of poor managerial performance for the collapse of Enron Corporation
Now it is necessary to find out and analyze whether operations management of Enron Corp performed all the functions mentioned above and what was the quality of their activity.
The Enron did have operations management department, which, according to their official source, fulfilled the following functions: setup accounts and notify utilities, agency agreement from customer, verify the format of invoice, setup invoice data transfer, test algorithms of invoice and file transfer to the customer, determine the reporting requirements of the customer (Enron Energy Services, 2000). As it is seen from the source, the functions of very operations management department are very limited. There are other management departments which perform the functions of operations management stated above: operations facility management, commodity management, energy asset management, financial operations, and capital management. Though, most of functions performed by these departments, according to the source, are purely executive and lack integration, systematic vision, responsibility, control and creative aspect. Besides limited scope of functions assigned to operations management in Enron Corporation, another important point concerns the quality of their performance and overall corporate culture and atmosphere created within corporation. As it was mentioned above, ideally, the functions of operations management include creating ethic values, integrity, competence and clear accountability within the organization. Enron’s management failed to comply with these tasks.
Read the full version of this article here.
Quality Mattress
February 5, 2012
There are four main functions of management.
1. Planning.
2. Organizing.
3. Leading.
4. Controlling.
Planning.
Planning is an important managerial function. It provides the design of a desired future state and the means of bringing about that future state to accomplish the organization’s objectives. In other words, planning is the process of thinking before doing. To solve the problems and take the advantages of the opportunities created by rapid change, managers must develop formal long- and short-range plans so that organizations can move toward their objectives.
It is the foundation area of management. It is the base upon which the all the areas of management should be built. Planning requires administration to assess; where the company is presently set, and where it would be in the upcoming. From there an appropriate course of action is determined and implemented to attain the company’s goals and objectives
Planning is unending course of action. There may be sudden strategies where companies have to face. Sometimes they are uncontrollable. You can say that they are external factors that constantly affect a company both optimistically and pessimistically. Depending on the conditions, a company may have to alter its course of action in accomplishing certain goals. This kind of preparation, arrangement is known as strategic planning. In strategic planning, management analyzes inside and outside factors that may affect the company and so objectives and goals. Here they should have a study of strengths and weaknesses, opportunities and threats. For management to do this efficiently, it has to be very practical and ample.
Characteristics of planning.
Ø Goal oriented.
Ø Primacy.
Ø Pervasive.
Ø Flexible.
Ø Continuous.
Ø Involves choice.
Ø Futuristic.
Ø Mental exercise.
Ø Planning premises.
Importance of planning.
* Make objectives clear and specific.
* Make activities meaningful.
* Reduce the risk of uncertainty.
* Facilitators coordination.
* Facilitators decision making.
* Promotes creativity.
* Provides basis of control.
* Leads to economy and efficiency.
* Improves adoptive behavior.
* Facilitates integration.
Formal and informal planning.
Formal planning usually forces managers to consider all the important factors and focus upon both short- and long-range consequences. Formal planning is a systematic planning process during which plans are coordinated throughout the organization and are usually recorded in writing. There are some advantages informal planning. First, formalized planning forces managers to plan because they are required to do so by their superior or by organizational rules. Second, managers are forced to examine all areas of the organization. Third, the formalization it self provides a set of common assumptions on which all managers can base their plans.
Planning that is unsystematic, lacks coordination, and involves only parts of the organizations called informal planning. It has three dangerous deficiencies. First, it may not account for all the important factors. Second, it frequency focuses only on short range consequences. Third, without coordination, plans in different parts of the organization may conflict.
Stages in planning.
The sequential nature of planning means that each stage must be completed before the following stage is begun. A systematic planning progress is a series of sequential activities that lead to the implementation of organizational plans.
The first step in planning is to develop organizational objectives.
Second, planning specialists and top management develop a strategic plan and communicate it to middle managers.
Third, use the strategic plans to coordinate the development of intermediate plans by middle managers.
Fourth, department managers and supervisors develop operating plans that are consistent with the intermediate plans.
Fifth, implementation involves making decisions and initiating actions to carry out the plans.
Sixth, the final stage, follow-up and control, which is critical.
The organizational planning system.
A coordinated organizational planning system requires that strategic, intermediate, and operating plans be developed in order of their importance to the organization. All three plans are interdependent with intermediate plans based on strategic plans and operating planes based on intermediate plans. Strategic plans are the first to be developed because they set the future direction of the organization and are crucial to the organization’s survival. Thus, strategic plans lay the foundation for the development of intermediate and operating plans. The next plans to be developed are the intermediate plans; intermediate plans cover major functional areas within an organization and are the steppingstones to operating plans. Last come operating plans; these provide specific guidelines for the activities within each department.
Organizing.
The second function of the management is getting prepared, getting organized. Management must organize all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Through this process, management will now determine the inside directorial configuration; establish and maintain relationships, and also assign required resources.
While determining the inside directorial configuration, management ought to look at the different divisions or departments. They also see to the harmonization of staff, and try to find out the best way to handle the important tasks and expenditure of information within the company. Management determines the division of work according to its need. It also has to decide for suitable departments to hand over authority and responsibilities.
Importance of the organization process and organization structure.
Promote specialization.
Defines jobs.
Classifies authority and power.
Facilitators’ coordination.
Act as a source of support security satisfaction.
Facilitators’ adaptation.
Facilitators’ growth.
Stimulators creativity.
Directing (Leading).
Directing is the third function of the management. Working under this function helps the management to control and supervise the actions of the staff. This helps them to assist the staff in achieving the company’s goals and also accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics, and department leadership.
Employees those which are highly provoked generally surpass in their job performance and also play important role in achieving the company’s goal. And here lies the reason why managers focus on motivating their employees. They come about with prize and incentive programs based on job performance and geared in the direction of the employees requirements.
It is very important to maintain a productive working environment, building positive interpersonal relationships, and problem solving. And this can be done only with Effective communication. Understanding the communication process and working on area that need improvement, help managers to become more effective communicators. The finest technique of finding the areas that requires improvement is to ask themselves and others at regular intervals, how well they are doing. This leads to better relationship and helps the managers for better directing plans.
Controlling.
Managerial control is the follow-up process of examining performance, comparing actual against planned actions, and taking corrective action as necessary. It is continual; it does not occur only at the end of specified periods. Even though owners or managers of small stores may evaluate performance at the end of the year, they also monitor performance throughout the year.
Types of managerial control:
* Preventive control.
Preventive controls are designed to prevent undesired performance before it occurs.
* Corrective control.
Corrective controls are designed to adjust situations in which actual performance has already deviated from planned performance.
Stages in the managerial control process.
The managerial control process is composed of several stages. These stages includes
Determining performance standards.
Measuring actual performance.
Comparing actual performance against desired performance (performance standards) to determine deviations.
Evaluating the deviations.
Implementing corrective actions.
2) Describe how this each function leads to attain the organizational objectives.
Planning
Whether the system is an organization, department, business, project, etc., the process of planning includes planners working backwards through the system. They start from the results (outcomes and outputs) they prefer and work backwards through the system to identify the processes needed to produce the results. Then they identify what inputs (or resources) are needed to carry out the processes.
* Quick Look at Some Basic Terms:
Planning typically includes use of the following basic terms.
NOTE: It is not critical to grasp completely accurate definitions of each of the following terms. It is more important for planners to have a basic sense for the difference between goals/objectives (results) and strategies/tasks (methods to achieve the results).
Goals
Goals are specific accomplishments that must be accomplished in total, or in some combination, in order to achieve some larger, overall result preferred from the system, for example, the mission of an organization. (Going back to our reference to systems, goals are outputs from the system.)
Strategies or Activities
These are the methods or processes required in total, or in some combination, to achieve the goals. (Going back to our reference to systems, strategies are processes in the system.)
Objectives
Objectives are specific accomplishments that must be accomplished in total, or in some combination, to achieve the goals in the plan. Objectives are usually “milestones” along the way when implementing the strategies.
Tasks
Particularly in small organizations, people are assigned various tasks required to implement the plan. If the scope of the plan is very small, tasks and activities are often essentially the same.
Resources (and Budgets)
Resources include the people, materials, technologies, money, etc., required to implement the strategies or processes. The costs of these resources are often depicted in the form of a budget. (Going back to our reference to systems, resources are input to the system.)
Basic Overview of Typical Phases in Planning
Whether the system is an organization, department, business, project, etc., the basic planning process typically includes similar nature of activities carried out in similar sequence. The phases are carried out carefully or — in some cases — intuitively, for example, when planning a very small, straightforward effort. The complexity of the various phases (and their duplication throughout the system) depends on the scope of the system. For example, in a large corporation, the following phases would be carried out in the corporate offices, in each division, in each department, in each group, etc.
1. Reference Overall Singular Purpose (”Mission”) or Desired Result from System.
During planning, planners have in mind (consciously or unconsciously) some overall purpose or result that the plan is to achieve. For example, during strategic planning, it is critical to reference the mission, or overall purpose, of the organization.
2. Take Stock Outside and Inside the System.
This “taking stock” is always done to some extent, whether consciously or unconsciously. For example, during strategic planning, it is important to conduct an environmental scan. This scan usually involves considering various driving forces, or major influences, that might effect the organization.
3. Analyze the Situation.
For example, during strategic planning, planners often conduct a “SWOT analysis”. (SWOT is an acronym for considering the organization’s strengths and weaknesses, and the opportunities and threats faced by the organization.) During this analysis, planners also can use a variety of assessments, or methods to “measure” the health of systems.
4. Establish Goals.
Based on the analysis and alignment to the overall mission of the system, planners establish a set of goals that build on strengths to take advantage of opportunities, while building up weaknesses and warding off threats.
5. Establish Strategies to Reach Goals.
The particular strategies (or methods to reach the goals) chosen depend on matters of affordability, practicality and efficiency.
6. Establish Objectives Along the Way to Achieving Goals.
Objectives are selected to be timely and indicative of progress toward goals.
7. Associate Responsibilities and Time Lines with Each Objective.
Responsibilities are assigned, including for implementation of the plan, and for achieving various goals and objectives. Ideally, deadlines are set for meeting each responsibility.
8. Write and Communicate a Plan Document.
The above information is organized and written in a document which is distributed around the system.
9. Acknowledge Completion and Celebrate Success.
This critical step is often ignored — which can eventually undermine the success of many of your future planning efforts. The purpose of a plan is to address a current problem or pursue a development goal. It seems simplistic to assert that you should acknowledge if the problem was solved or the goal met. However, this step in the planning process is often ignored in lieu of moving on the next problem to solve or goal to pursue. Skipping this step can cultivate apathy and skepticism — even cynicism — in your organization. Do not skip this step.
To Ensure Successful Planning and Implementation:
A common failure in many kinds of planning is that the plan is never really implemented. Instead, all focus is on writing a plan document. Too often, the plan sits collecting dust on a shelf. Therefore, most of the following guidelines help to ensure that the planning process is carried out completely and is implemented completely — or, deviations from the intended plan are recognized and managed accordingly.
Involve the Right People in the Planning Process
Going back to the reference to systems, it is critical that all parts of the system continue to exchange feedback in order to function effectively. This is true no matter what type of system. When planning, get input from everyone who will responsible to carry out parts of the plan, along with representative from groups who will be effected by the plan. Of course, people also should be involved in they will be responsible to review and authorize the plan.
Write Down the Planning Information and Communicate it Widely
New managers, in particular, often forget that others do not know what these managers know. Even if managers do communicate their intentions and plans verbally, chances are great that others will not completely hear or understand what the manager wants done. Also, as plans change, it is extremely difficult to remember who is supposed to be doing what and according to which version of the plan. Key stakeholders (employees, management, board members, founders, investor, customers, clients, etc.) may request copies of various types of plans. Therefore, it is critical to write plans down and communicate them widely.
Goals and Objectives Should Be SMARTER
SMARTER is an acronym, that is, a word composed by joining letters from different words in a phrase or set of words. In this case, a SMARTER goal or objective is:
Specific:
For example, it is difficult to know what someone should be doing if they are to pursue the goal to “work harder”. It is easier to recognize “Write a paper”.
Measurable:
It is difficult to know what the scope of “Writing a paper” really is. It is easier to appreciate that effort if the goal is “Write a 30-page paper”.
Acceptable:
If I am to take responsibility for pursuit of a goal, the goal should be acceptable to me. For example, I am not likely to follow the directions of someone telling me to write a 30-page paper when I also have to five other papers to write. However, if you involve me in setting the goal so I can change my other commitments or modify the goal, I am much more likely to accept pursuit of the goal as well.
Realistic:
Even if I do accept responsibility to pursue a goal that is specific and measurable, the goal will not be useful to me or others if, for example, the goal is to “Write a 30-page paper in the next 10 seconds”.
Time frame:
It may mean more to others if I commit to a realistic goal to “Write a 30-page paper in one week”. However, it will mean more to others (particularly if they are planning to help me or guide me to reach the goal) if I specify that I will write one page a day for 30 days, rather than including the possibility that I will write all 30 pages in last day of the 30-day period.
Extending:
The goal should stretch the performer’s capabilities. For example, I might be more interested in writing a 30-page paper if the topic of the paper or the way that I write it will extend my capabilities.
Rewarding:
I am more inclined to write the paper if the paper will contribute to an effort in such a way that I might be rewarded for my effort.
Build in Accountability (Regularly Review Who is Doing What and By When?)
Plans should specify who is responsible for achieving each result, including goals and objectives. Dates should be set for completion of each result, as well. Responsible parties should regularly review status of the plan. Be sure to have someone of authority “sign off” on the plan, including putting their signature on the plan to indicate they agree with and support its contents. Include responsibilities in policies, procedures, job descriptions, performance review processes, etc.
Note Deviations from the Plan and Replan Accordingly
It is OK to deviate from the plan. The plan is not a set of rules. It is an overall guideline. As important as following the plan is noticing deviations and adjusting the plan accordingly.
Evaluate Planning Process and the Plan
During the planning process, regularly collect feedback from participants. Do they agree with the planning process? If not, what do not they like and how could it be done better? In large, ongoing planning processes (such as strategic planning, business planning, project planning, etc.), it is critical to collect this kind of feedback regularly.
During regular reviews of implementation of the plan, assess if goals are being achieved or not. If not, were goals realistic? Do responsible parties have the resources necessary to achieve the goals and objectives? Should goals be changed? Should more priority be placed on achieving the goals? What needs to be done?
Finally, take 10 minutes to write down how the planning process could have been done better. File it away and read it the next time you conduct the planning process.
Recurring Planning Process is at Least as Important as Plan Document
Far too often, primary emphasis is placed on the plan document. This is extremely unfortunate because the real treasure of planning is the planning process itself. During planning, planners learn a great deal from ongoing analysis, reflection, discussion, debates and dialogue around issues and goals in the system. Perhaps there is no better example of misplaced priorities in planning than in business ethics. Far too often, people put emphasis on written codes of ethics and codes of conduct. While these documents certainly are important, at least as important is conducting ongoing communications around these documents. The ongoing communications are what sensitize people to understanding and following the values and behaviors suggested in the codes.
Nature of the Process Should Be Compatible to Nature of Planners
A prominent example of this type of potential problem is when planners do not prefer the “top down” or “bottom up”, “linear” type of planning (for example, going from general to specific along the process of an environmental scan, SWOT analysis, mission/vision/values, issues and goals, strategies, objectives, timelines, etc.) There are other ways to conduct planning. For an overview of various methods, see (in the following, the models are applied to the strategic planning process, but generally are eligible for use elsewhere).
Critical — But Frequently Missing Step — Acknowledgement and Celebration of Results
It’s easy for planners to become tired and even cynical about the planning process. One of the reasons for this problem is very likely that far too often, emphasis is placed on achieving the results. Once the desired results are achieved, new ones are quickly established. The process can seem like having to solve one problem after another, with no real end in sight. Yet when one really thinks about it, it is a major accomplishment to carefully analyze a situation, involve others in a plan to do something about it, work together to carry out the plan and actually see some results.
Organizing.
Organizing can be viewed as the activities to collect and configure resources in order to implement plans in a highly effective and efficient fashion. Organizing is a broad set of activities, and often considered one of the major functions of management. Therefore, there are a wide variety of topics in organizing. The following are some of the major types of organizing required in a business organization.
A key issue in the design of organizations is the coordination of activities within the organization.
Coordination
Coordinating the activities of a wide range of people performing specialized jobs is critical if we wish avoid mass confusion. Likewise, various departments as grouping of specialized tasks must be coordinated. If the sales department sells on credit to anyone who wished it, sales are likely to increase but bad-debt losses may also increase. If the credit department approves sales only to customers with excellent credit records, sales may be lower. Thus there is a need to link or coordinate the activities of both departments (credits and sales) for the good of the total organization.
Coordination is the process of thinking several activities to achieve a functioning whole.
Leading
Leading is an activity that consists of influencing other people’s behavior, individually and as a group, toward the achievement of desired objectives. A number of factors affect leadership. To provide a better understanding of the relationship of these factors to leadership, a general model of leadership is presented.
The degree of leader’s influence on individuals and group effectiveness is affected by several energizing forces:
Individual factors.
Organizational factors.
The interaction (match or conflict) between individual and organizational factors.
A leader’s influence over subordinates also affects and is affected by the effectiveness of the group.
* Group effectiveness.
The purpose of leadership is to enhance the group’s achievement. The energizing forces may directly affect the group’s effectiveness. The leader skills, the nature of the task, and the skills of each employee are all direct inputs into group achievement. If, for example, one member of the group is unskilled, the group will accomplish less. If the task is poorly designed, the group will achieve less.
These forces are also combined and modified by leader’s influence. The leader’s influence over subordinates acts as a catalyst to the task accomplishment by the group. And as the group becomes more effective, the leader’s influence over subordinates becomes greater.
There are times when the effectiveness of a group depends on the leader’s ability to exercise power over subordinates. A leader’s behavior may be motivating because it affects the way a subordinate views task goals and personal goals. The leader’s behavior also clarifies the paths by which the subordinate may reach those goals. Accordingly, several managerial strategies may be used.
First, the leader may partially determine which rewards (pay, promotion, recognition) to associate with a given task goal accomplishment. Then the leader uses the rewards that have the highest value for the employee. Giving sales representatives bonuses and commissions is an example of linking rewards to tasks. These bonuses and commissions generally are related to sales goals.
Second, the leader’s interaction with the subordinate can increase the subordinate’s expectations of receiving the rewards for achievement.
Third, by matching employee skills with task requirements and providing necessary support, the leader can increase the employee’s expectation that effort will lead to good performance. The supervisor can either select qualified employees or provide training for new employees. In some instances, providing other types of support, such as appropriate tools, may increase the probability that employee effort leads to task goal accomplishment.
Fourth, the leader may increase the subordinate’s personal satisfaction associated with doing a job and accomplishing job goals by
Assigning meaningful tasks;
Delegating additional authority;
Setting meaningful goals;
Allowing subordinates to help set goals;
Reducing frustrating barriers;
Being considerate of subordinates’ need.
With a leader who can motivate subordinates, a group is more likely to achieve goals; and therefore it is more likely to be affective.
Controlling.
Control, the last of four functions of management, includes establishing performance standards which are of course based on the company’s objectives. It also involves evaluating and reporting of actual job performance. When these points are studied by the management then it is necessary to compare both the things. This study on comparison of both decides further corrective and preventive actions.
In an effort of solving performance problems, management should higher standards. They should straightforwardly speak to the employee or department having problem. On the contrary, if there are inadequate resources or disallow other external factors standards from being attained, management had to lower their standards as per requirement. The controlling processes as in comparison with other three, is unending process or say continuous process. With this management can make out any probable problems. It helps them in taking necessary preventive measures against the consequences. Management can also recognize any further developing problems that need corrective actions.
Although the control process is an action oriented, some situations may require no corrective action. When the performance standard is appropriate and actual performance meets that standard, no changes are necessary. But when control actions are necessary, they must be carefully formulated.
An effective control system is one that accomplishes the purposes for which it was designed.
Controls are designed to affect individual actions in an organization. Therefore control systems have implications for employee behavior. Managers must recognize several behavioral implications and avoid behavior detrimental to the organization.
It is common for individuals to resist certain controls. Some controls are designed to constrain and restrict certain types of behavior. For example, Dress codes often evoke resistance.
Controls also carry certain status and power implications in organizations. Those responsible for controls placed on important performance areas frequently have more power to implement corrective actions.
Control actions may create intergroup or interpersonal conflict within organizations. As stated earlier, coordination is required for effective controls. No quantitative performance standards may be interpreted differently by individuals, introducing the possibility of conflict.
An excessive number of controls may limit flexibility and creativity. The lack of flexibility and creativity may lead to low levels of employee satisfaction and personal development, thus impairing the organization’s ability to adapt to a changing environment.
Managers can overcome most of these consequences through communication and proper implementation of control actions. All performance standards should be communicated and understood.
Control systems must be implemented with concern for their effect on people’s behavior in order to be in accord with organizational objectives. The control process generally focuses on increasing an organization’s ability to achieve its objectives.
Effective and efficient management leads to success, the success where it attains the objectives and goals of the organizations. Of course for achieving the ultimate goal and aim management need to work creatively in problem solving in all the four functions. Management not only has to see the needs of accomplishing the goals but also has to look in to the process that their way is feasible for the company.
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December 28, 2011