Action planning is performed for achieving a desired result in future and the assessment of whether that action has been achieved or not is done by performance control. Consequently there is a correlation between action planning and performance control. No control is possible without planning and plans cannot be achieved without controls at different intervals. Desired outputs are achieved with the synergic affect of action planning and performance control.
As the name suggests, action planning is the process of planning the actions to be performed in a given time limit. Sometimes it is easier to consider how a task is performed rather than its evaluation in terms of the results it has achieved or not. However it is an important tool to measure the results. Planning and implementation are two different phases which is interlinked by action planning. The action plan is only devised when the decision for an action to be performed is constructed to achieve a desired result by an individual or a group of people. Action planning focuses on what, who, when and how of the process. What exactly has to be done will be first stated, then how it to be done, who will be performing the task and when will the task be performed/finished. Effectively and systematically designed action plans guarantee the decision taker that his time spent on planning shall have the desired results. Hence, decision makers and managers can make the best use of action planning. The practicality of strategies that are defined is double checked by the action planning. How and how many resources will be exploited and who are the people to utilize them in order to provide results at a specified time are clearly stated by action planning. Trust is maintained with the concerned people and they are saved from any distress by action planning.
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Action planning process assists to focus on the ideas and to decide what steps are required to achieve goals. What a person alone or as whole (for a team) wants to achieve over a given period of time is action planning. For instance, 'training the reception staff how to deal with aggressive customers' or 'installing all safety equipments and training staff for accidents'. When is it easier to evaluate the way how a specific task is performed, it is an ideal situation for action planning. This method works for the service industry. For instance, the officers at a complaint desk at airport are clearly specified how to greet the unsatisfied travelers and further listen, record and improvise to their complaints. It is relatively easier to monitor the behavior of the staff instead of the customer's feedback or reaction; however the main aim is to satisfy the customers. The risk of failure in action planning is high.
Recommendations for Action Planning:
Step 1: Identify the Problem
The first and foremost step is to identify the area problem.
Step 2: Choose Team Members
It is suggested to define the team members. Their collaboration, cooperation and coordination are important to achieve the desired results.
Step 3: State your objective
Clearly and precisely list down the objectives. The goals should be challenging enough to keep those involved motivated.
Step 4: List the Benefits
The benefits that will be achieved from the fulfilled objectives should also be included.
Step 5: Pick a Team Name
A team name might be chosen for the team to meet its aims. For instance, those working on safety issues might name their team as "SAVERS" or "GUARDIANS". This is suggested in order to motivate the team with their collective group name reminding them of their roles.
Step 6: Design Activities, Create a Timeline, Assign Roles
A table as mentioned above should be prepared to clearly state the roles and responsibilities of each team player, when and where they will be performing what task.
Step 7: List Materials and Costs
Another table listing the estimated cost of all the resources required to carry out the plan in a goal directed way is important. It can be done by developing the following table:
Always on Time
Marked to Standard
Step 8: Develop a Budget for the Project
The particular department of the organization which has initiated the action plan will coordinate with the finance department in order to devise an approved budget for the project.
Step 9: Identify risks
All the possible risks, their probabilities should be laid down in the action plan so as to prepare for any unfavorable situation. Gaps and weak links in the action plan should also be listed and remedies of how to address them must be present.
Step 10: Agree on coordination and monitoring mechanism.
The consent of each member is important and they will be held liable in case of any negligence.
Step 11: Alternatives
Alternative strategies to achieve the goals must also be devised so if one way doesn't work, there are other possible ways to lead the project.
Step 12: Review your progress
It is important to timely check and balance the progress of the project. If any pitfalls occur, list them down and prepare lessons learnt report for future guidance. Add any tasks if required depending upon the situation.
The process of monitoring performance during the action plan is being carried out is known as the performance control. It involves comparing the tasks with predefined standards and adjustments. After an organization sets an objective, it measures the performance by comparing the results with the set objective.
The attainment of objectives of an action plan is the major goal of performance control. Standards are predefined for the results regardless of how those results are achieved. The required task is communicated to the employees, the decision of devising strategies remains with the employees. Concrete objectives are set by performance control without specifying the methods of achieving them. When targets are clear, the individuals are motivated by performance control measures. High performance is assured when the goals are clear. The failure of performance lies in vague objectives. The regulation of the overall results of a given unit is also a purpose of performance control. Different standards are established for each unit and these standards are further used to measure performance. The overall results for a given period of time are the main focus of performance control, rather than actions/tasks.
Recommendations for performance control:
First of all the standards to enhance employee performance are set. Secondly, for the evaluation of employees, set measurable objectives. The next step is to classify the main resources of gathering information for control which are easily accessible at work and analyze if they are sufficient for the requirements. Then the difference between levels of performance and predefined standards are sorted out. Evaluate the control measures on a daily basis and lay down any areas of improvement. A team is motivated and confident with effective control. The assessment for training, up gradation, promotion, transfer, etc is also enabled by control. It helps the employees to evaluate their own performance which can result in overall satisfaction of the employee.
Applying Action Planning and Performance Control to a company:
The department of labor of the New Zealand Government has set its objective to increase reporting levels of accidents. This action plan is practically possible because it is measurable. For this purpose campaigns to report accidents/injuries in the public will be conducted, new forms will be developed so that the literate can fill report without the fear of being held responsible for in the case. The purpose of this plan in not to trying change the world it rather focuses on something that is realistically possible. The performance control will make sure that all the actions are taken towards achieving the goal. The corrective actions will be taken if the goal is not achieved.
The goal of Southwest Airlines Company's action plan is to increase its revenue by 15% within 12 months. It is relatively easier to measure and adjust this task if required. Southwest airlines require aggressively evaluating its network, optimizing its flight schedule by cutting approximately 10 percent of flights in order to achieve its goal. Southwest Airlines will measure revenue growth on quarterly basis to control the performance. Corrective actions will be taken in case of any deviation from the plan. If the goal is not achieved the higher level management can also intervene to take corrective measures which include lowering the fuel costs.
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Action planning and performance control are two interlinked components required for the process of planning. Organizations lucidly deploy its values, vision, mission, objectives with the help of strategic planning. The planning process is made easier and maneuvered in the right direction with the help of action plan and performance controls which ensure that the results are achieved successfully. They coordinate with each other for standardization of processes in order to achieve desired goals and objectives.
Question 2: Centralization and Decentralization Issues: Conceptual Discussions. Write an essay.
The differences between centralized and decentralized organizational structure have been a topic for discussion for a long time now. Stability and predictability are outcomes of centralization. Adding more, lower level employees take advantage from centralized structure because they do not have to brain storm or be creative in making suggestions for the decision making process. The centralized structure defines the expectations clearly. Conversely, too much control and power is limited in a few hands in centralized structure. Alternatively decentralization has its own pitfalls which lead to failures. So why to opt for decentralization?
Several factors affect whether decisions are decentralized or decentralized:
Cost is an important factor which affects the decisions at an organization. If the cost is higher, the decision will be centralized. Urgency is another important factor which affects the decision. It is usually believed that urgent decisions are taken by centralized approach however, in case of a risk situation; the centralized approach might be used. The extent to which the employees are qualified and experienced. Decentralized decisions will be taken when there will be a huge number of skilled, trained, qualified and experienced employees. The next factor is the size of the organization. In small organization usually the business owners are responsible for all the tasks. However in large and diversified businesses, it is unlikely to limit the power and authority to make decisions with the top management. Not all resources are available to the top management hence it is not practical. If the organization is geographically dispersed, the decentralization structure will be used in order to address the environment needs at a daily basis. The centralized approach will not be effective in this situation.
In centralized structure the decision making powers are in the control of the top management of the organization. This decision making authority proves successful in a few cases. Yet decision making can be hampered if the top management does not have the appropriate information and time is required if the request of decision has to travel upwards. However, managers often argue that the best and timely decisions are taken by people working at a lower level in the organization because they are dealing with the issues. Nevertheless it is important that these people are competent enough to take decisions with all the relative information available. A mix of centralized and decentralized approach is being used by many organizations in this era for the purpose of seeking competitive advantages.
Centralization is said to be suitable when the environment is more stable. Things change slowly; hence centralization can be effective and efficient. On the contrary, decentralization is more suitable for volatile and frequently changing environments. But for this purpose, the right information must be available, the people must be incumbent to decision making and they should have coordination established with the other departments of the organization.
The interdependent workgroups should be coordinated effectively or centralization could be a better option. However a balance of authority and centralization could be used for effective decision making. It is important that all the departments are well coordinated in this case.
Centralized Organizational Structures
The control from top management ensures the accountability of the decisions made. The conflict between those who have different point of views or suggestions is eliminated with centralized decision making system. In case of a crisis, the top management is able to make quick and strong decisions in the better interest of the organization. Centralization also ensures that the organizational objectives are linked with the decisions made.
Top management seeks the responses of people who study the market conditions hence the decision making requires more time in centralized structure. The contribution to lower level managers is not encouraged. And centralized decision making discourages any initiatives taken by the lower level managers or employees. Hence decision is concentrated in a few hands.
Decentralized Organizational Structures
Decentralization encourages the initiatives of the lower level managers/employees. It keeps the employees motivated to share and brainstorm their innovative and creative ideas. It enhances the innovative thinking among the employees. Decentralization involves few layers of the management. It allows quick response to the changes in the market. Operations can be coordinated at divisional level which is not possible in the centralization set up.
Decentralization leaves less control with the top management which keeps them from supervising their lower level managers. The coordination amongst the different departments of the organization can be hampered. It may also end up in causing a loss for the organization due to less experience in decision making.
Examples of Centralized Structure:
Toyota is a good example of centralized structure. It does not give any autonomy to the regional operations. The North American sales are managed by an executive in Japan. McDonalds Corporation (MCD) is the world's largest fast food chain and its structure is centralized which has tight controls over both suppliers and franchisees. Yum Brands (YUM) is an immediate competitor to McDonalds. Although the business model is similar to MCD, YUM is decentralized. Hence, what works for one company might not work for the other and vice versa.
Examples of Decentralized Structure:
The organizational structure at Wal-Mart is decentralized. The store managers are given some authority to handle major issues at the store. This strategy is known as 'store within a store'. Individual stores are allowed to store stock of best selling products in that city.
Recently, many global and U.S companies are using a mix of centralized and decentralized structure depending upon the competitive environment. Research believes that companies are in need to use both approaches for survival in this era because complete reliance on both the structures is doesn't allow them to utilize their resources in best possible way. Unilever is one good example of such companies. It uses structural flexibility for different advantages. Decentralization is required to meet the local customer needs however it has centralized some functions such as global research and development. Google is using a similar strategy to keep up with the ever changing business environment. Company history proves that employees are encouraged to share innovative and creative ideas however these days they are directly being discussed in meetings with the co-founders for direct feedback and speedier decision making.
Question 3: Discuss some of the related concepts on Chps 3 and 4. Use company examples, if possible.
The summation of the way an organization divides its human resources into different tasks and manages coordination among them is defined as an organizational structure by Mintzberg. The basic element of organization structure is coordination which ties it together. Following are the five means of coordination:
Under the supervision of an individual who gives orders to others in order to ensure coordination and is responsible for their work is known as direct supervision. For instance, the line-and-staff structure at McDonald's. The staff position has direct authority over some of the other McDonald's employees.
Standardization of work process
As the name suggests the actual process is already specified, programmed or standardized. Usually, assembly lines are a good example to explain where the operator is left with less caution in the performance of the task.
Standardization of outputs
In this mechanism, only the final results or outputs are specified. For instance, a potter is asked to make pots of a specific design but not told how exactly to perform the task. The process is undefined but the results are.
Standardization of skills
The type of training required in order to perform a task is specified in this mechanism. The individuals are taught how to coordinate before they perform the actual task. For example, training enables the anesthetics in an operation theatre to realize and operate according to their roles.
Mutual adjustment occurs
This situation occurs when people communicate informally for the purpose of completing a task.
Mutual adjustment transpires in both simple as well as complicated situations. For example, people on a submarine may coordinate or at a superstore between the stock handler and the operators. Once all the coordination mechanisms are in place, one follows the other in the completion of a task.
The purpose of grouping units is not only to create an organogram but also to track who works in the organization. It is important for the coordination of work in an organization.
It establishes a system of common supervision among positions and units
Units share common resources
Develops common measures of performance
Encourages mutual adjustment
Creates problems of coordination between units
Members of each unit are isolated
Focuses on the units' own problem not as a whole for the organization
Discourages inter group coordination
Grouping by Place:
The organizations that have expanded physically use this approach of grouping. Divisions of huge companies are located in different cities, regions, etc. Global advent has given rise to trend of international divisions. Grouping is advantageous when organizations are physically dispersed. It enables decision making within the territory of work being performed. Grouping for place by Unilever:
Effective and efficient handling of the regional operations
Higher level of customer satisfaction
Adaptation to unstable environment
Takes advantages of economies of local operations
Places responsibility with lower level managers
Duplication of functions
Isolated from other areas of the organization
Less control remains with the top management
Grouping by function:
Grouping by function is the most commonly and widely used form of grouping. The division and specialization of work is done by functional grouping. Similar activities or processes are placed together in one department under a head. For instance, all the activities related to manufacturing and supply chain management may be grouped together into a production department, personnel activities in the human resources department and all activities related to sales may be under the marketing head. It is commonly used in the operating level of the organization to monitor their activities effectively and efficiently. Following is the functional division of Unilever:
Coordination with the functional areas
Functions reflect the nature of the business
Control at top management level
Poor communication across functional areas
Limited view of the organizational goals
Slow adaptation to changing environments
Limits the development of managers
Grouping by Customer:
It is important for organizations to maintain customer relationships in this modern and competitive environment. Building strong relationships with the customers is usually the job of supervisors and senior management who inflict their leadership roles. Grouping by customer considerations is undertaken by many organizations. It is important to address to the needs and requirements of the customers. For instance, the day care that provides facilities in the evening for the working women who have infants is their demand and requirement. Unilever divides its group by its customers as follows:
Focus on customer requirements
Duplication of resources
Less cross department communication
Vague customer grouping
Expert employees in solving customer issues required
Age and Size of the Organization
The administrative structure of the organization depends on the age and size of the organization. The evolution of organizations is usually slow but its size may change drastically. This is unsettling for the organization. Usually organizations start at an entrepreneurial level, with owners serving as managers to the business. The size of organization is small and informal. Ownership separates from the management in the next stage and with the passage of time it is a bureaucratic environment. Organizations form divisions if they manage to grow further more than bureaucracy. The targets of each division are different markets. The final stage of development is a matrix organization in which two or more groupings are done. The older the organization, the more formalized it is. The age of the industry is reflected by the age and organizational structures. However the use of information technology or new techniques of performing tasks do not have the same relation with the age of the industry. For instance, agriculture is a long known industry, it has lesser room for growth and development of careers whereas the industry of fast moving consumer goods (FMCG) is vast with high job specialization and various positions to offer for job. It is observed that large organizations have more sophisticated organizational structures. With the growth of organizations the demand for specialists has increased as compared to the line managers.
Recommendations for determining the best organizational structure for an organization:
It is important to understand the organization before beginning the process of developing an organizational structure. The aims, objectives, mission and mission need to be kept it view. The culture and history of the organization are also important factors to be considered because they help in determining which structure might toil best results.
Business strategy is way how an organization needs to figure out its position in the market in terms of products of services. It is important to decide whether the organization is going to introduce an innovative product/service or produce already available market products, for this purpose it is important that the strategy is aligned with a supportive structure.
The organization operates and functions in an environment. An organization needs to figure out which environment it will operate in and what structure is required to respond to the changing environment.
The organization structure must be selected which bases on the size of the organization. Business owners are usually responsible for all the operations in an entrepreneurship business hence it requires no structure. On the contrary, large organizations require a proper organizational structure for proper functioning.
An organization must pick a structure for itself in which clear communication among the departments is encouraged. It is important to allow and promote communication among departments on a daily basis. The managers should be available and ready to listen to the employees if they ask for assistance or issues like conflict resolutions.
The best utilization of resources is possible if an organization selects an effective and efficient organizational structure for itself.
There is no hard and fast rule which applies to success of any organizational structures. As situations and environments change, the organizations might have to change their structures of make them flexible enough to work proactively.