Lecture 8: Planning, Organizing & Control

Chapter 10 & 12

Learning Objectives
Need for organizational planning How to build right HR TQM Stages of growth How goals are defined and set MBO How planning and control interact

Circular Nature of Organizational Planning

Setting Goals

Evaluating Performance

Defining Skill Needs

Filtering Skill Needs

Identifying & Defining Skill Needs

Exhibit 10.2

Building a Staff
Job description document providing information regarding tasks, duties, and responsibilities of job Exhibit 10.3 Organizational Chart traces the lines of responsibility and authority between jobs Exhibit 10.4

Line and Staff

Line authority the right to lead. Do it and do it now. Staff authority the right to solve problems. You ought to do it in this way because its the best way. The Line Organization every job holder reports to a single boss; no one has staff function. The Functional Organization a job holder may report to two or more bosses.

Finding the Right Employees

School Placement
Employee Referrals

Internal Searches

Recruitment Sources

Voluntary Applicants

Employment Agencies

Advertisements

Delegate the authority

To get the work done To allow key employees to take initiative To keep things going in the entrepreneurs absence

TQM
The pursuit of excellence Quality what does it mean?
Quality is excellence that is better than a minimum standard. It is conformance to standards andfitness of purpose ISO 9000:2000 definition of quality- It is the degree to which a set of inherent characteristics fulfills requirements. Quality is fitness for use of the product Joseph Juran. Quality is also defined as excellence in the product or service that fulfills or exceeds the expectations of the customer.

 Quality is the qualifier Doing it right first time and all the time. This boosts Customer satisfaction immensely and increases efficiency of the Business operations.

Clearing the bar (ie. Specification or Standard stipulated) Excellence that is better than a minimum standard.

TQM six basic Concepts

Management commitment to TQM principles and methods & long term Quality plans for the Organisation Focus on customers internal & external Quality at all levels of the work force.

Continuous improvement of the production/business process.

Treating suppliers as partners Establish performance measures for the processes.

TQM Myths
TQM is only for large businesses TQM is used by only manufacturers

4 Stages of Growth
Pre birth Acceptance Break through Maturity

Goals and Plans

Goal

A desired future state that the organization wants to achieve.

What do we want?
Plan A blueprint of the actions necessary to reach the desired goal. How do we get there?

The shift from informal planning to formal planning

From: Random Planning Reactive decision making To: Systematic Planning Proactive decision making

Isolated decision making

Subjective decision making Guessing results

Team decision making

Objective decision making Analyzing possible outcomes

MBO
Management by Objectives (MBO) A structured process of regular communication. Supervisor/team leader and workers jointly set performance objectives. Supervisor/team leader and workers jointly review results.

Model of the MBO Process

Step 1: Setting Goals
Corporate Strategic Goals Departmental Goals Individual Goals Step 2: Developing Action Plans

Action Plans

Review Progress Step 3: Reviewing Progress Corrective Action

Appraisal of Overall Performance

Step 4: Appraising Overall

Performance

How does management by objectives operate?

MBO involves a formal agreement

specifying
Workers performance objectives for a specific time period. Plans through which performance objectives will be accomplished.

Standards for measuring accomplishment of performance objectives .

Procedures for reviewing performance results.

The MBO process:

Supervisor and workers jointly set objectives, establish standards, and choose actions. Workers act individually to perform tasks; supervisors act individually to provide necessary support. Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.

MBO Benefits and Problems

Benefits of MBO
1. Manager and employee efforts are focused on activities that will lead to goal attainment. 2. Performance can be improved at all company levels. 3. Employees are motivated 4. Departmental and individual goals are aligned with company goals.

Problems with MBO

1. Constant change prevents MBO from taking hold. 2. An environment of poor employeremployee relations reduces MBO effectiveness. 3. Strategic goals may be displaced by operational goals. 4. Mechanistic organizations and values that discourage participation can harm the MBO process. 5. Too much paperwork saps MBO energy.

Planning
Plan

Action taken to Implement plan

Plans communicate goals to employees to coordinate functions such as sales and production. Financial plans are often expressed in the form of budgets (i.e., profit, cash, production budgets)

Control

Plan

Action taken to Implement plan

Results

Comparison of planned and actual results

Evaluation Performance reports compare actual with planned (budgeted) performance. Management by exception is used meaning that only significant deviations are investigated