Business 101: Principles of Management

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In this lesson you will learn the role of planning as a function of management. Discover the advantages of and barriers to planning and how it is used to achieve organizational goals.

Why Managers Plan

Have you ever walked up to a pretty girl, and when you started to talk, nothing came out but silence? Have you run out of gas just a few miles from the nearest gas station? Have you found yourself freezing cold, wishing you had worn a sweater? Or maybe you have had to pull an all-nighter to finish a project that you procrastinated on until the last possible minute? What all these scenarios have in common is a lack of planning. Having a plan is a good practice for everyone, especially for managers.

Having a plan is a good practice for everyone, especially managers.

Here are some of the reasons why it is a good idea for managers to plan:

 

 

 

 

 

 

 

• Managers can examine critical issues facing the organization instead of waiting for them to blow up in their face. Allowing uncertainty, high risk and doubt to rule in an organization is never a good idea. Planning allows a manager to determine organizational goals and define a means of achieving them.
• A manager can set explicit guidelines for decision-making when done in advance. This allows the manager to be both small picture- and big picture-minded when making decisions.
• A manager is able to be more proactive than reactive in decisions. Failing to plan will take away your ability to look into the future and potentially predict an inevitable event before it becomes an issue. Planning increases the likelihood of long-term survival of an organization.
• A manager can focus attention on organizational goals and results.
• A manager is able to create ownership of the plan and develop a team that buys into and accepts accountability for their role in the plan.
• A manager can provide a sense of direction, vision, rationale and purpose for the plan, which can be easily communicated to other members of the organization, showing them how serious a manager is about reaching organizational goals.
• A manager can create a competitive advantage by taking the time to plan - a process that allows an organization to examine who they are in relation to their competition and thus provide a good deal of insight into how to be better than that competition.
  

  Planning increases the likelihood of long-term survival of an organization.

Now that we know why it's a good idea for managers to plan, let's dive a bit deeper into the planning function of management.

Planning as a Function of Management

In the world of management, planning is as fundamental as it gets. If you recall, the first of the managerial functions is planning. Many believe planning is the most fundamental of the managerial functions because all other functions, including organizing, leading, controlling and staffing, stem from the planning function. Planning prepares organizations for tomorrow today by assessing what an organization wants to accomplish and how it will go about achieving that goal.

Managers will spend much of their time planning for all sorts of things that may or will occur in the organization. Typically a manager will create a plan that is aimed at accomplishing some organizational goal such as increasing sales or improving customer service. However, it is important to note that planning is an ongoing step that can be highly specialized based on an organization's goals, division goals, departmental goals and team goals. It is up to the manager to recognize what goals need to be planned within their individual area.

Managers create plans that are aimed at accomplishing organizational goals.

For example, let's say Erin the enrollment manager has noticed a steady decline in the amount of students enrolling in the business program, so she creates a goal to increase enrollments in that area. Erin must first spend time mapping out the necessary steps she and her team of enrollment advisors need to take to increase the enrollment numbers of undergraduate business students. These steps might include things like increasing online advertisements on business-related sites, creating a new advertisement for television or radio, asking current business students to talk to their friends and family about enrolling in the program or going out to local high schools or community colleges to speak directly with students who may be enrolling at the university in the next semester. The steps are then organized into a logical pattern so that Erin and her team can follow it.

Barriers to Effective Planning

While Erin has come up with a good plan for how to increase enrollment of undergraduate business students relatively quickly, not all managers are so lucky. In fact, there are several barriers that can hinder the planning process. For example, Erin was fortunate to have had the prior experience planning how to overcome problems with enrollment numbers. However, not all managers have the experience and knowledge of how to plan effectively. Knowing how to plan is only the tip of the iceberg. Even those managers who understand how to put plans in place that are aimed at achieving an organizational goal face barriers for effective planning. Sometimes it is not the knowledge about how to plan that impacts the success of the planning process but rather a lack of accurate information or resources that does. A manger will need information to be correct, up-to-date and reliable when creating a plan; otherwise it will more than likely fail.

Some managers make the critical error of not looking far enough ahead when planning. They get stuck in the present at the expense of the future. Putting too much emphasis on the short-term and not enough on long-term factors in a plan can have devastating consequences. Essentially, managers should be careful not to lose sight of the forest when looking at the trees.

Managers should not lose sight of the forest when looking at the trees.

Those managers who fear uncertainty and failure will tend to focus on creating plans that they feel in control over. Concentrating on events, people and things that a manager can control limits the manager's ability to react when a change in the external environment occurs. Again, this inability to adapt to challenges can place a negative impact on an organization and its ability to reach its goals. Likewise, there are managers who lack commitment to the planning process. Let's face it; planning can be a time-consuming, challenging process.

The list of barriers managers face when planning is significant. However, by creating an awareness of these issues, they can be identified early in the process. Once these issues are identified, a manager must take the necessary steps to overcome these challenges so that he or she can continue on the path of working towards organizational goals.

Managers must take the necessary steps to overcome challenges.

Lesson Summary

Let's review. The first of the managerial functions is planning. Many believe planning is the most fundamental of the managerial functions because all other functions, including organizing, leading, controlling and staffing, stem from the planning function. Planning prepares organizations for tomorrow today by assessing what an organization wants to accomplish and how it will go about achieving that goal.

The advantages of planning include the ability to:

 

• Examine critical issues facing the organization
• Set explicit guidelines for decision-making
• Be more proactive than reactive in decisions
• Focus attention on organizational goals and results
• Create ownership of the plan
• Develop a team that buys into and accepts accountability
• Provide a sense of direction, vision, rationale and purpose for the plan
• Communicate the plan to members of the organization
• Create a competitive advantage

There are several barriers to effective planning that can hinder the planning process, which include:

• A lack of experience and knowledge of how to plan effectively
• A lack of accurate information or resources
• Not looking far enough ahead when planning
• Focusing too much on creating plans that managers feel in control over
• Lacking commitment to the planning process

Effective managers take the time to acknowledge these barriers to the planning process and work to overcome them so that they can continue on the path of working towards organizational goals.