Planning, Control, Communication & Decision Making in Business
Planning
Planning: The process followed to determine exactly what the organization will do to achieve its goals.
Planning Classes: There are several classifications of planning. According to Stoner, managers use two basic types of planning: strategic planning and operational planning.
- Strategic Planning: Designed to meet the overall goals of the organization.
- Operational Planning: Shows how to implement strategic plans in daily life.
Strategic and operational plans are linked to the organization’s mission, the overall goal that justifies its existence. They differ in their time horizon, scope, and detail.
Relationship Between Planning and Control
Planning provides standards (indicators) of control against which to measure performance. If there is a significant deviation between actual and planned performance, corrective action can be taken. Budgets are a clear example of plans used as control standards.
Stages in the Development of Planning
- Needs Expression: The “promoter” expresses needs and the desire to resolve the problem. A short document outlining the draft is approved by management or a relevant committee.
- Objectives and Results: Study the specific objectives and results to be provided by the project, timelines, estimated costs, and the means to employ.
- Project Definition: The project manager, with the technical support team, defines the project’s contents, functional analysis, expected workload, and development methodology.
- Formal Contract: Based on the functional analysis, definitively determine the volumes, workload, timing, and means to use, leading to a formal contract between the client and computer users (often called a load binder or “spec sheet”).
- Organizational Analysis: Technicians perform organizational analysis and specifications for programming.
- Programming and Testing: Programming and testing are performed for application programming.
- Provisional Acceptance: If tests are successful, provisional acceptance is made, resulting in user and exploitation manuals.
- Implementation and Monitoring: Application implementation requires strict monitoring to verify proper operation. A review of project results follows.
- Benefits Assessment: After several months of operation, an assessment of the real benefits produced for the company is necessary.
- Application Audit: After a year or two, an audit should check if the application is still appropriate or needs modifications.
Control
Control: A major step in administration. Even with great plans, an appropriate organizational structure, and efficient management, executives cannot check the organization’s real situation without a mechanism to report whether facts align with objectives.
Requirements for Good Control
- Correction of Faults and Errors: Control must detect and indicate errors in planning, organization, or direction.
- Forecast Future Failures: By detecting and indicating current errors, control should prevent future errors in planning, organization, and direction.
Importance of Control
- Create Better Quality: Process failures are detected and corrected to remove errors.
- Confronting Change: Control helps organizations adapt to inevitable changes in their environment.
- Produce Faster Cycles: Control helps speed up the cycles involved in developing and delivering new products and services to meet customer demands for faster delivery and customized solutions.
- Add Value: Control mechanisms contribute to adding value to products and services.
- Facilitate Delegation and Teamwork: Control supports effective delegation and teamwork within the organization.
Basis of Control
Control is based on the following activities:
- Planning and Organizing
- Doing
- Evaluating
- Improving
Control Areas
The main areas of control in a company are:
- Production Areas: In industrial companies, this is where products are made. In service companies, it’s where services are provided. The main control here is production control, which aims to schedule, coordinate, and implement measures for optimal performance in units produced, meeting sales department needs.
Communication
Communication: Requires a transmitter, a receiver, a message, and a channel. If any element fails, interference occurs, hindering communication. A common code (linguistic or nonlinguistic) is used to send the message.
Barriers to Communication
- Physical: e.g., distance, noise
- Semantic: e.g., different interpretations of words
- Physiological: e.g., disabilities, impairments
- Psychological: e.g., emotions, attitudes
- Management: e.g., lack of clear communication channels
Process of Communication
- Development of an idea
- Coding
- Transmission
- Reception
- Decoding
- Acceptance
- Use
- Feedback
Decision Making
Decision Making: In an organization, decision-making is limited to individuals supporting the same project. It begins with a selection decision, a task of great importance.
Functions of Decision Making
Decision-making impacts four administrative functions:
- Planning: Selecting problems and objectives
- Organization: Establishing the structure and roles of individuals
- Direction: Influencing individuals to achieve organizational and group goals
- Control: Measuring and correcting individual and organizational performance to achieve plans
Ingredients for Decision Making
- Information
- Knowledge
- Experience
- Analysis
- Judgment
Importance of Decision Making
Through good judgment, decision-making ensures that problems or situations are thoroughly evaluated and considered to choose the best course of action among different alternatives.