PRINCIPLES AND PRACTICES OF MANAGEMENT
Planning is the act of looking ahead and finding out the courses of action to be followed in future. It determines when, how and how will do a particular task. It is associated with some ideas such as preparation or examining the future which means planning is all about the forecast of course of action for the future which requires a construction of the operating procedures of the programs. According to Henri, Fayol planning should be flexible, current, relevant and accurate because it brings together the organization by concentrating on the nature, objectives, and requirements of the business both short and long-term predictions of the industry.
For a manager to plan effectively, they should have skills in handling people, have significant energy and a high capacity of moral courage, have perpetual incumbency. They should be competent with specialized requirements of the central business, possess general experience in the enterprise and should be able to generate creative and innovative ideas. Poor planning and decision making can negatively affect the body. Situations can also fail, and the best plan becomes useless. Therefore, managers should be very keen while making decisions and implementing the program.
Planning is a primary tool in the organizational process because it assists employees to focus on the set objectives and the goals of the organization. Without a plan people can lose focus but when provided and it is clearly stated it assist the staff to concentrate on achieving the set goals and objectives of the business. These assist the organization in meeting their needs and remain competitive. Organization will be able to take proactive measures and be innovative and creative. Planning is all about forecasting thus organization will be able to curb for uncertainty and the risks which cannot be predicted avoided. It gives the organization an active and meaningful guide to the activities being undertaken by the employees for accomplishing the business strategy. It is because with planning there is clear role definition that will assist reducing conflicting responsibilities. It also matches all the managerial activities thus relating the external changes with internal processes. All these forms a base for meaningful decision making thus provides the best alternative to the future course of action.
Planning is a continuous process that is very complex, and managers are required to plan effectively by first understanding the environment that is continuously changing. For managers to plan effectively strategies on innovation, research and development costs are vital. It helps the organization come up with new products which makes it to stay relevant in the market and thus they will succeed. Strategic planning will help the organization to remain in the right direction. Research and development evaluation is critical because it assists the company to minimize risks and uncertainty. For effective planning research, development and innovation cost is necessary to support innovative initiatives being run in the organization. They should analyze and come up with strategies which involve many steps. It reduces the gap between the current position and the future state of an organization and thus making things possible.
Managers can plan effectively by following these steps; Identifying objectives: managers need to set goals and objectives for the whole group and the various functional units of the organization. Objectives must specify the activities to be done, as well as the expected outcomes. Focus should be on the outcome to be expected, and objectives determine both long-term and short-term goals that must be achieved.
Developing the premises for planning: premises as assumptions about the environment where the program will be implemented. The environment is dynamic, and it’s continuously changing thus calling for planning the facilities. It involves both internal and external environments. Internal factors are controllable and may include the policy of capital investment, management and labor relations and theories of management. External factors are non-controllable and may include political, social, cultural and economic factors.
Establishing choices: when setting the objectives, various options should be identified. This is to assist in choosing the best alternative which is not always apparent. The planner is supposed to select the best suitable alternative which is a hard task. Forth is, evaluating the alternatives: each alternative should be analyzed to determine how it will best contribute to meeting the organizational goals and objectives. Their weakness and strengths should be compared. Selecting the best alternative: After evaluating the different options the best is selected, the manager is responsible for deciding which option to choose. They are supposed to choose more than one because the planning premise may not exactly suit the current situation of the firm, they should also ready always with the option the best suits a different situation.
The next step is, establishing a detailed plan. These plans are the one that will assist in achieving its desired outcome because they contain all the activities to be carried out in the various functional units of the firm. They include policies, budget, rules and regulations, standard operating procedures and programs. Lastly, appraisal plan is developed that is used to make follow up. When the plan is implemented, it should be appraised to determine its effectiveness. In the case of any mistakes, corrective measures are taken so as to avoid deviating from the course of action.
In conclusion, for managers to plan effectively they consider the different situations because the organization is influenced by dynamic environment. It is characterized by uncertainty and manager should have contingency plans to assist in such situations. Contingencies are unavoidable, but the level of damage can be reduced if designed effectively before time. It calls for creativity and innovation skills.
ASSESSING EXTERNAL ENVIRONMENT: FIVE PORTER’S FORCES.
Dynamic environment is the one that is continuously changing and impacts due to varies influences. For managers to effectively formulate strategies they must do environmental scanning. It will help them to understand the realities in the business environment. Analysis of external environment helps to identify the potential threats and opportunities outside the organization threats hidden in the environment and assist in learning about the events and trends in the environment and predict the future position for those factors of the environment. External environment consists of factors that are outside the enterprise and they not within the control of the management at a short-term.
The five porter’s forces is one of the techniques used in assessing the external environment that affects the business whether new or existing. Michael E. Porter says, five factors help to determine whether a company is making profits or not based on other competitors in the market. These forces are;
Competitive rivalry: it examines the competition that is existing currently in the industry and is determined by the total number of competitors that exist in the market and what they are capable of doing. The rivalry of completion is high when there are few businesses in the same market but in a growing industry, customers can go to the competitor’s products and services that have low prices. When there is high rivalry competition, advertising and price competition occurs, but it cannot affect the business negatively.
Bargaining power of suppliers: this analyzes how much power and control do the supplier has with the potential of raising prices. This lowers the profitability of the business. It also determines the number of existing suppliers, when they are few they have more power. The sources of energy include switching cost of firms, availability of substitute and cost of supply about the substitutes. Bargaining power of the customers: the forces examine the power of the consumers to affect the prices of products and their quality.
The threat of new entrants: this analyzes the chances of a new competitor of joining the industry. When barrier of entry is less, it makes it easy for a new competitor to enter the market its increases the risk of share market depletion of business. Barriers to entry and exit are frequently applied, and they include ultimate cost advantage, access to inputs, economies of scale and brand recognition. The threat of substitutes: this determines how easy it is for consumers to change from a business product or service to that of the competitor. It compares the number of existing competitors, their prices, the profits, and quality to that of the business being examined. They are informed by switching costs and buyer biases to change, and this determines their ability to lower the prices.
This is a superiority possessed by an organization when it can provide the same values products or services as the competitor but at a lower price or high prices because they offer high quality through product differentiation. There are three types are; Cost competitive advantages: this is when an organization can utilize its skilled personnel, cheap raw materials, controlled costs, and efficient operations to offer real value to the consumer. Companies can use this to achieve their success by providing large selection and low to the retailer’s strengths and size. They can cut their prizes in the following ways product which involves continually improving the product as there is field advancement design, re-engineering that is redesigning and improving the product and creating new delivery methods for goods and services .
Product/service differentiation: for a company to attain competitive advantage their goods or services should be valuable and unique. It will help them win customer loyalty, and product differentiation will be achieved. Cost advantages that easily vanish when there are new competitors in the industry. If the company’s services/products are unique, it is difficult to maintain an edge based on prices only in the market. Theses are achieved by having respected brand names this will bring product reliability. The company is supposed to be creative and innovative so as to meet customer needs and to adapt to changes in technology with time and this will make them attain competitive advantage.
Niches/focus: in this case, the business aims at differentiating a particular target of the market sections. Business can offer customer needs of the small section that are different from those offered by the competitor who offers to a larger part of the consumers. Such companies produce customized products for the small part of the market. They become successful when the quantities are required small or when the extent of differentiation required is beyond capabilities of the industry. It tries to meet the varying customers’ needs and wants thus satisfying them.
DIAGRAM OF FLAT ORGANISATIONAL STRUCTURE
This is how the group is organized, and it gives members explicit directions on how to go ahead, bring and unifies them together, and it’s usually inevitable. To change the structure of the organization, current ways of doing things needs to be examined, discuss the structural change with stakeholders and learn and explore the organizational structure for bringing change. For Natural life Sdn Bhd Company a flat structure is suitable for the organization.
Advantages of the flat structure include; staff are involved and allowed to take on more responsibility, communication is high and significant and increased teamwork and unity. There is also less bureaucracy and comfortable decision making as well as low cost of maintenance. Disadvantages of this structure are that it is only limited to small organizations, decisions can get stuck as a result of consulting with many staff members, and it is very expensive to implement.
Authoritarian leadership: the primary emphasis is on distinguishing between the leader and the employees. It is being used by Mr. Ganeson the CEO of Agri-Malaysia agricultural company. Laissez-faire leadership: all the rights and power to make the decision is given to the employer and this is being used by En.nordin raze, the software company. Paternalistic leadership: the leader acts as father and shows concern for its employees. It is being used by Mr. Lee chairman of the Office manufacturer of inkjet.
Pros of authoritarian leadership are that it allows quick decision-making and provides motivation and satisfaction to leaders who dictates the employees. It also yields better profits when high speed is required. Cons of authoritarian leadership are, frustration, demoralization, and conflict among employees and staff tend to goldbrick responsibilities and initiatives. Pros of laisser-faire leadership are that it gives job satisfaction and encouragement to employees.Employees are given a chance to take action and development of workers in all the areas. Cons include; no leadership at all, no one provides guidance and support to staff, and chances of problems and conflicts are high especially when employs move in different directions.
Pros of paternalistic leadership are; Providing feedback that is used to generate morale decreased absenteeism of employees.Employees interest are considered when they are given the chance to make decisions and are rewarded when well behaved.Cons are; when there is no constant connection to management employees becomes less motivated, if wrong decisions are made staff will not be satisfied, increased supervision of workers is required due to overdependence and times the leader might spank the staff leading due problems due to employee rights and legislation.
Fayol, Henri. General Principles of Management. Anderson, S.C.: Tutor/Tapes, 1976.
Porter, Michael E. The Competitive Advantage of Nations. New York: Free Press, 1990.
Hays, Forbes B. Community Leadership; The Regional Plan Association of New York. New York: Columbia University Press, 1965.
Kotler, Philip. Marketing Management: Analysis, Planning, and Control. Englewood Cliffs, N.J.: Prentice-Hall, 1980. Bibliography
Mouzelis, Nicos P. Organisation and Bureaucracy; An Analysis of Modern Theories. Chicago: Aldine Pub. Co, 1968.
Robbins, Stephen P., and Mary K. Coulter. Management. Upper Saddle River, NJ: Pearson Prentice Hall, 2005.
Roundtable Productions. Styles of Leadership. Beverly Hills, Calif: Roundtable Films, 1980.
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