Management Planning Functions

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Questions and Answers

Which of the following is NOT a core function of management that is influenced by planning?

  • Organizing
  • Controlling
  • Leading
  • Marketing (correct)

A well-defined plan guarantees successful outcomes.

False (B)

What is the primary outcome of the planning process?

Strategy

Planning helps managers to ______ resources effectively to achieve organizational goals.

<p>allocate</p> Signup and view all the answers

Match the following management functions with their descriptions:

<p>Organizing = Arranging resources and tasks to achieve goals Leading = Motivating and inspiring employees Controlling = Monitoring and evaluating progress toward goals Planning = Setting goals and determining actions to achieve them</p> Signup and view all the answers

Which of the following is a key element of the goal setting process?

<p>Defining specific, measurable, achievable, relevant, and time-bound (SMART) goals (C)</p> Signup and view all the answers

The classical approach to organizational structure emphasizes flexibility and adaptability over strict hierarchy.

<p>False (B)</p> Signup and view all the answers

What is departmentalization, and what are some common methods used?

<p>Departmentalization is the process of grouping jobs into units based on similar functions, products, customers, geographic location, or process. Common methods include functional, product, customer, geographic, and process departmentalization.</p> Signup and view all the answers

Which of the following is NOT a common departmentalization structure?

<p>Social structure (D)</p> Signup and view all the answers

In a customer structure, the organization groups its activities based on the types of products it offers.

<p>False (B)</p> Signup and view all the answers

What are two emerging structures of organization discussed in the session?

<p>Virtual network and mixed departmentalization</p> Signup and view all the answers

The ______ structure is popular in multi-business enterprises, grouping activities along business and product lines.

<p>product</p> Signup and view all the answers

Match the departmentalization structure with its corresponding description:

<p>Functional structure = Groups activities based on major business functions like marketing, finance, and production Product structure = Organizes activities around specific products or services Process structure = Matches strategy to structure based on main operating processes Customer structure = Focuses on different customer segments and their specific needs Geographic structure = Organizes activities based on geographic location or region</p> Signup and view all the answers

Which level of management is typically involved in strategic planning?

<p>Strategic (C)</p> Signup and view all the answers

Organizational structure plays a crucial role in ensuring that plans are successfully executed.

<p>True (A)</p> Signup and view all the answers

The relationship between planning and strategy is that planning ______ strategy, and strategy encompasses ______ organizational goals and plans are to be executed.

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What is the process by which managers determine whether to attempt a task, work out the most effective way of reaching desired objectives, and prepare to overcome unexpected difficulties with adequate resources?

<p>Planning</p> Signup and view all the answers

What are the two broad types of goals companies develop?

<p>Strategic and Financial (B)</p> Signup and view all the answers

A strategic plan typically covers a longer time frame than a tactical plan.

<p>True (A)</p> Signup and view all the answers

The acronym SMART stands for Specific, Measurable, Achievable, ______, and Timely.

<p>Realistic</p> Signup and view all the answers

Match the types of plans with their corresponding time frames:

<p>Strategic Plan = Long-term (5-10 years) Tactical Plan = Short-term (up to 3 years) Operational Plan = Short-term (day-to-day)</p> Signup and view all the answers

Which of the following is NOT a step in the planning process?

<p>Delegation (D)</p> Signup and view all the answers

What is the purpose of environmental scanning in the planning process?

<p>To identify potential opportunities and threats in the external environment.</p> Signup and view all the answers

Budgets are an example of descriptive plans that are expressed in financial terms.

<p>True (A)</p> Signup and view all the answers

Plans that are used repeatedly as the need arises are called ______ plans.

<p>Standing</p> Signup and view all the answers

Who is typically responsible for developing operational plans?

<p>First-Line Management (C)</p> Signup and view all the answers

What is the primary purpose of goal setting?

<p>To provide direction and a framework for measuring progress.</p> Signup and view all the answers

If goals are not being met, management should abandon the planning process and move on to other initiatives.

<p>False (B)</p> Signup and view all the answers

The process of evaluating alternative options and developing strategies to achieve goals is known as ______.

<p>Decision making</p> Signup and view all the answers

Which of the following is a benefit of effective planning?

<p>All of the above (D)</p> Signup and view all the answers

What is the final step in the planning process?

<p>Review and Evaluation</p> Signup and view all the answers

Tactical plans are typically developed by top management.

<p>False (B)</p> Signup and view all the answers

Which of the following is NOT a method of departmentalization?

<p>By technology (A)</p> Signup and view all the answers

The mechanistic system of management practice is characterized by a high degree of specialization and standardization.

<p>True (A)</p> Signup and view all the answers

What are the two divergent systems of management practice and structure identified by Burns and Stalker?

<p>Mechanistic and organic systems</p> Signup and view all the answers

In a ______ structure, services are outsourced to separate companies that are connected electronically to a central office.

<p>virtual network</p> Signup and view all the answers

Which of the following is a characteristic of an organic system?

<p>Decentralized decision-making (C)</p> Signup and view all the answers

The matrix structure combines aspects of multiple departmentalization methods.

<p>True (A)</p> Signup and view all the answers

What is the primary focus of the contingency theory of organization?

<p>There is no one best way to organize, and the optimal structure depends on the specific context and contingencies.</p> Signup and view all the answers

The ______ theory posits that there is no one optimum state for organizational issues.

<p>contingency</p> Signup and view all the answers

Which of the following organizational structures is most likely to be effective in a rapidly changing environment?

<p>Organic structure (A)</p> Signup and view all the answers

The virtual network structure is characterized by a centralized hierarchy and a high degree of internal control.

<p>False (B)</p> Signup and view all the answers

Explain the concept of departmentalization.

<p>Departmentalization is the process of dividing organizational tasks and allocating them to specialized work groups, based on various criteria such as function, product, process, customer, or geography.</p> Signup and view all the answers

The ______ structure is characterized by shared power and resources allocated based on the best fit for the department or unit.

<p>matrix</p> Signup and view all the answers

Match the following departmentalization methods with their primary focus:

<p>By business function = Grouping tasks based on specialized activities like marketing, finance, or production By product or service = Organizing around specific products or services offered by the company By customer = Creating departments based on different customer segments or groups By geography = Dividing the organization based on geographical regions or locations</p> Signup and view all the answers

Which of the following is NOT a classical theory of organization?

<p>Contingency Theory (D)</p> Signup and view all the answers

According to Contingency Theory, there is a single best approach to successful management.

<p>False (B)</p> Signup and view all the answers

What is the main characteristic of Weber's ideal bureaucracy?

<p>A hierarchy of authority and a system of rules and procedures designed to create an optimally effective system for large organizations.</p> Signup and view all the answers

Henri Fayol classified the essential elements of management as planning, organizing, ______, coordination, and control.

<p>command</p> Signup and view all the answers

Match the following classical theorists with their main contributions:

<p>Max Weber = Bureaucracy Henri Fayol = Management Functions Rensis Likert = Human Organization Joan Woodward = Technology as a contingency variable</p> Signup and view all the answers

According to Rensis Likert, supportive relationships and employee participation are crucial for effective organizations.

<p>True (A)</p> Signup and view all the answers

What is the primary focus of Contingency Theory?

<p>Situational factors affecting organization design (A)</p> Signup and view all the answers

The two main contingency variables discussed in the session are ______ and ______.

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Which of the following is NOT a dimension of organization structure?

<p>Financial Performance (B)</p> Signup and view all the answers

Strategic plans are the shortest term in nature.

<p>False (B)</p> Signup and view all the answers

What is the purpose of an organization chart?

<p>An organization chart graphically represents the positions, reporting relationships, and lines of formal communication within an organization.</p> Signup and view all the answers

The ______ is a system of task, reporting, and authority relationships within which the work of the organization is done.

<p>organization structure</p> Signup and view all the answers

Match the following organizational structure concepts with their definitions:

<p>Departmentalization = Dividing work into specialized units based on functions or areas Span of Control = Number of employees reporting directly to a manager Administrative Hierarchy = System of reporting relationships from the lowest to highest levels Centralization = Decision-making power concentrated at higher levels Formalization = Degree to which rules and procedures are documented and formalized</p> Signup and view all the answers

Which of the following is NOT an example of departmentalization?

<p>Financial Performance Departmentation (D)</p> Signup and view all the answers

A wide span of control suggests that a manager supervises a larger number of employees.

<p>True (A)</p> Signup and view all the answers

What is the difference between responsibility and authority within an organization?

<p>Responsibility refers to the obligation to perform a task, while authority represents the power to make decisions and take actions related to the task.</p> Signup and view all the answers

The principle of unity of command states that an employee should report to multiple supervisors.

<p>False (B)</p> Signup and view all the answers

The ______ refers to the hierarchical arrangement of authority and responsibility, flowing in a clear vertical line.

<p>chain of command</p> Signup and view all the answers

Which of the following is NOT a key aspect of operational aspects of organizational structure?

<p>Span of Control (C)</p> Signup and view all the answers

A highly centralized organization allows lower-level employees to make significant decisions.

<p>False (B)</p> Signup and view all the answers

What are the key components of a SMART goal?

<p>A SMART goal is Specific, Measurable, Achievable, Relevant, and Time-bound.</p> Signup and view all the answers

The process of dividing work into specialized units is known as ______.

<p>departmentalization</p> Signup and view all the answers

Match the following levels of planning with their timeframes:

<p>Strategic planning = Long term Tactical planning = Medium term Operational planning = Short term</p> Signup and view all the answers

Which of the following best describes the purpose of organization structure?

<p>To order and coordinate employee actions to achieve organizational goals (C)</p> Signup and view all the answers

The three levels of planning (strategic, tactical, and operational) should be effectively integrated for successful implementation.

<p>True (A)</p> Signup and view all the answers

Explain the concept of 'unity of command' in organizational structure.

<p>Unity of command dictates that each employee should report to and receive instructions from only one supervisor to avoid conflicting directions and confusion.</p> Signup and view all the answers

The organizational structure should be designed to support and implement the ______ of the organization.

<p>strategy</p> Signup and view all the answers

Which of the following best represents the relationship between strategy and structure?

<p>Strategy precedes structure (D)</p> Signup and view all the answers

Which of the following is a common departmentalization structure used in organizations?

<p>Functional Structure (A), Product Structure (B), Process Structure (C), Customer Structure (D), All of the above (E)</p> Signup and view all the answers

A functional structure is suitable for organizations that operate in diverse geographic markets.

<p>False (B)</p> Signup and view all the answers

What is the key difference between a functional and a product structure?

<p>A functional structure groups activities based on major business functions, while a product structure groups activities along business and product lines.</p> Signup and view all the answers

The ______ structure is often used by companies that have a wide range of products or services.

<p>product</p> Signup and view all the answers

Match the following departmentalization structures with their corresponding descriptions:

<p>Functional = Groups activities based on major business functions, like marketing, finance, or production. Product = Organizes activities along business and product lines, suitable for multi-business enterprises. Process = Matches strategy to structure based on primary operational processes within the organization. Customer = Focuses on serving different customer segments with specialized teams and services. Geographic = Organizes activities based on geographical locations, suitable for companies operating across varied regions.</p> Signup and view all the answers

Which of the following is an example of a mixed departmentalization scheme?

<p>A company with separate departments for marketing, finance, and production, and each department is further divided by product line. (D)</p> Signup and view all the answers

The virtual network structure is a traditional organizational design that has been in use for decades.

<p>False (B)</p> Signup and view all the answers

The principle of ______ work groups, as proposed by Rensis Likert, suggests that groups should be linked for effective coordination and communication.

<p>overlapping</p> Signup and view all the answers

Which of the following is a universal approach to organizational design?

<p>Bureaucracy (A)</p> Signup and view all the answers

Which of the following is NOT a common contingency variable affecting organizational structure?

<p>Motivation (D)</p> Signup and view all the answers

The principle of ______ of ______ suggests that each employee should report to only one manager, while ______ of ______ ensures consistent direction and goals across the organization.

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What is the ideal bureaucracy characterized by according to Max Weber?

<p>A hierarchy of authority and rules (A)</p> Signup and view all the answers

Contingency theory asserts that there is one best approach to all organizational structures.

<p>False (B)</p> Signup and view all the answers

What are the three classical theories of organization?

<p>Weber's bureaucracy, Fayol's management functions, Likert's human organization</p> Signup and view all the answers

Fayol classified the essential elements of management as planning, organizing, command, ______, and control.

<p>coordination</p> Signup and view all the answers

Match the following theorists with their contributions to organizational design:

<p>Max Weber = Ideal bureaucracy Henri Fayol = Management functions Rensis Likert = Human organization Joan Woodward = Technology in organizational structure</p> Signup and view all the answers

Which principle is NOT part of Fayol's 14 principles of organizing?

<p>Employee empowerment (B)</p> Signup and view all the answers

According to Rensis Likert, supportive relationships and employee participation are essential for effective organization.

<p>True (A)</p> Signup and view all the answers

What are the key factors that influence organizational structure in contingency theory?

<p>Technology and environment</p> Signup and view all the answers

A ______ structure is known for having a high degree of specialization and is often bureaucratic in nature.

<p>mechanistic</p> Signup and view all the answers

Match the classical organization theory with its main idea:

<p>Bureaucracy = Hierarchical authority and rules Management Functions = Planning, organizing, command, coordination, control Human Organization = Supportive relationships and participation</p> Signup and view all the answers

Which of the following best describes Fayol's principle of unity of direction?

<p>Employees work towards common goals under the same plan. (D)</p> Signup and view all the answers

Fayol's principles provide a rigid structure with no room for flexibility.

<p>False (B)</p> Signup and view all the answers

Describe the significance of overlapping work groups according to Rensis Likert.

<p>Overlapping work groups allow for better coordination and communication among team members.</p> Signup and view all the answers

Contingency theory emphasizes that the most effective approach to management depends on the specific ______ involved.

<p>situation</p> Signup and view all the answers

Flashcards

Planning

Choosing goals and actions to achieve desired outcomes.

Importance of Planning

Planning affects all management functions: organizing, leading, controlling.

Outcome of Planning

A strategy consisting of decisions about goals and actions.

SMART Goals

Specific, Measurable, Achievable, Relevant, Time-bound goals.

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Goal Setting Process

The steps to define and prioritize organizational goals.

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Departmentalization

The process of dividing an organization into distinct units.

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Classical Approach to Structure

Focuses on hierarchy and clear roles within an organization.

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Contingency Approach to Structure

Emphasizes the need for flexibility and adaptability in management.

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Functional Structure

An organizational structure that aligns with major business functions to support strategy.

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Product Structure

An organizational structure that groups activities along product lines, useful in multi-business firms.

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Process Structure

An organizational structure that aligns with main operating processes for strategic purposes.

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Customer Structure

An organizational structure organized around major customer types to enhance service.

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Geographic Structure

A common organizational structure for companies operating across diverse geographic areas.

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Matrix Structure

A mixed departmentalization scheme combining functional and project-based structures for flexibility.

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Virtual Network Structure

An emerging organizational structure that utilizes outside specialists supported by a central hub.

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Levels of Planning

Three types: strategic, tactical, and operational plans.

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Strategic Plans

Long-term plans outlining an organization's objectives and direction.

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Tactical Plans

Shorter-term plans that specify actions to implement strategic plans.

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Operational Plans

Plans that cover short-term, day-to-day operations of the organization.

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Organization Structure

System defining roles, tasks, and reporting relationships within an organization.

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Configuration of Organization

How tasks are divided and coordinated within the organization.

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Span of Control

Number of employees reporting directly to a supervisor.

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Administrative Hierarchy

System showing reporting relationships from lowest to highest levels.

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Centralization

Concentration of decision-making authority at the top levels of management.

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Formalization

Extent to which roles, procedures, and communication are defined and documented.

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Chain of Command

Hierarchical structure of authority within an organization.

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Unity of Command

Principle stating that a subordinate should only receive directions from one superior.

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Responsibility vs Authority

Responsibility is the obligation to perform, while authority is the legitimized power to make decisions.

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Implementation of Strategy

The process of executing plans to achieve goals.

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Classical Organizational Theory

A framework focusing on structured hierarchies and rules in management.

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Bureaucracy

A hierarchical organization defined by a clear set of rules and authority.

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Fayol's Management Functions

Planning, organizing, command, coordination, and control as key management roles.

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14 Principles of Fayol

A set of principles advocating effective organizational practices.

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Human Organization

Rensis Likert's approach emphasizing supportive relationships and teamwork.

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Linking Pins

Managers acting as connectors between work groups and management.

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Contingency Theories

Management theories stating that decisions depend on unique situational factors.

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No One Best Approach

The idea that there isn't a universal structure for all organizations.

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Technology and Environment

Two major contingency factors affecting organizational structure.

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Size of Organization

A variable that influences the design and structure of management.

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History of Organization

Past experiences that shape current organizational structure and practices.

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Management Objectives

Goals set by management based on circumstances and conditions.

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Authority and Responsibility

Two critical components of Fayol's principles for effective organizing.

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What is Planning?

The process managers use to determine goals and how to achieve them effectively.

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Key Steps in Planning

Includes environmental scanning, forecasting, setting objectives, decision making, and review.

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What are Goals?

Desired outcomes used to measure accomplishments at various levels.

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Environmental Scanning

Analyzing external and internal environments for effective planning.

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Objectives

Specific targets that a company aims to achieve through its plans.

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Resource Evaluation

Assessing available resources before setting goals.

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Decision Making in Planning

Choosing the best alternative from several options during the planning process.

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Review of Plans

Evaluating the effectiveness of plans and making adjustments as necessary.

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Descriptive Plans

Plans that outline what will be achieved and the methods to achieve it.

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Standing Plans

Plans designed for repeated use, like policies and procedures.

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Mechanistic System

A rigid organizational structure focusing on hierarchical authority and fixed roles.

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Organic System

A flexible organizational structure emphasizing collaboration and adaptability.

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Contingency Theory

Theory suggesting there is no one best way to manage or organize; it depends on the situation.

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Weber's Ideal Bureaucracy

A theory of organization characterized by hierarchy, rules, and procedures for efficiency.

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Emerging Structures

New organizational structures that evolve with changing business needs and technologies.

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Departmentalization Methods

Various ways organizations can structure departments: by function, product, process, customer, or geography.

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Power Sharing

The allocation of decision-making authority across various departments and levels in an organization.

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Strategic Advantage

An edge a company gains over competitors by employing a superior structure or approach.

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Environmental Change

Fluctuations in the external environment that can impact organizational structure and success.

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Technical Change

Modification in technology that influences how organizations operate and structure themselves.

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Study Notes

Planning Function

  • Planning involves deciding on organizational goals and actions to achieve them (Robbins & Coulter, 2012).
  • A good plan leads to desired results; a poor plan yields poor results.
  • Planning impacts all other management functions (organizing, leading, controlling).
  • The outcome of planning is a strategy, encompassing goals, actions, and resource allocation.
  • Effective planning is crucial for goal achievement.

Learning Objectives

  • Understand planning's importance, elements, and levels.
  • Learn the goal setting process.
  • Identify steps in planning and goal setting.
  • Define and apply SMART goals.
  • Understand organizational structure's core dimensions.
  • Explain and differentiate departmentalization approaches.
  • Comprehend classical and contingency organizational design approaches.

Elements and Levels of Planning

  • Planning involves preparing for the future.
  • Managers plan at various levels (strategic, tactical, operational) for different purposes.
  • Planning is a process with steps: environmental scanning, forecasting, objective setting, alternative analysis, decision making, plan implementation, and review.
  • Goals are desired outcomes for individuals, groups, and organizations.
  • Plans detail how to achieve goals.
  • SMART goals (Specific, Measurable, Achievable, Realistic, Time-bound) are essential.
  • Financial and strategic goals are two broad categories.

Types and Levels of Plans

  • Descriptive plans state what and how to achieve a goal—often expressed in budgets or charts.
  • Plans differ in their time span:
    • Strategic plans (long-term, 5-10 years) are for top management.
    • Tactical plans (short-term, up to 3 years) are for middle management.
    • Operational plans (very short-term, day-to-day) are for first-line managers.
  • Plans can be used once or repeatedly (programmes/standing plans).
  • Three levels of planning: strategic, tactical, operational, with strategic plans being long-term and operational ones short-term.

Core Dimensions of Organization Structure

  • Organization structure defines task, reporting, and authority relationships.
  • It depicts how an organization functions and its parts interrelate (e.g., organizational charts).
  • Organization structure analysis includes: configuration (size, shape), operational aspects (separation of tasks, rules, decision-making), and responsibility/authority.
  • Division of labor and coordination are key aspects of organizational structure.
  • Coordination mechanisms include:
    • Departmentalization: Dividing work into departments.
    • Span of control: Number of employees reporting to a manager.
    • Administrative Hierarchy: System of reporting from lowest to highest levels.
  • Operational aspects (not visible in charts) include centralization (decision-making) and formalization (rules/procedures).
  • Responsibility is an obligation, authority is legitimized power. They both originate from organizational ownership.

Chain of Command and Unity of Command

  • Chain of command: Clear, unbroken vertical line of authority from top to bottom.
  • Unity of command: Each subordinate receives directions from one superior only (exceptions exist).

Classical and Contingency Approaches

  • Classical Theories:
    • Weber's Ideal Bureaucracy: Hierarchical authority, rules/procedures for optimal effectiveness (in large organizations).
    • Fayol's Management Functions and Principles: Planning, organizing, command, coordination and control. Included 14 principles for organizing, e.g., unity of command, unity of direction.
    • Likert's Human Organization: Supportive relationships, employee participation, overlapping work groups.
  • Contingency Theories: Management decisions are situational; each situation is unique; there's no one best approach.
  • Contingency Variables: Technology, environment, size, history, strategy, purpose, power, top management preferences influence structure and success.
  • Mechanistic vs. Organic Systems: Different management structures for different situations, proposed by Burns and Stalker.

Departmentalization and Emerging Structures

  • Departmentalization divides tasks, allocating them to work groups (functional, process, product, customer, geographic).
  • New Approaches:
    • Virtual Network/Modular Structure: Central hub with outsourced specialists.
    • Mixed Departmentalization: Combinations of different structures in operating divisions (e.g., product-based divisions with functional departments within).

Summary of Unit 3

  • Planning is important and impacts all other functions. Managers plan at different levels (strategic, tactical, operational).
  • Organization structure is crucial for successful plan execution.
  • Classical and contingency theories guide organizational design.
  • Successful managers adapt structures to their organization and environmental contexts.

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