Clarice Faith Torres
Organization Management Notes
Final Term
Chapter 1: Planning
 Planning as a function of Management
- Usually the direction of the organization that is
established through various activities such as the
development of goals
- Planning as a function of management
encompasses various levels of decision-making
(Schraeder, Self, Jordan & Portis, 2014)
- Management process always begins with planning
—setting intended goals, assumptions of what
actions should take place, the means and ways of
achieving the goals (Kareska, 2017).
- Process applied by managers to identify and
choose appropriate goals, and directions for action
for the organization (Kareska, 2017).
- The process is in the form of:
business plan—document that outlines the steps of the
company creation and pictures out the business
activities.
- This also serves as the mind map
- With business planning, entrepreneur is able to
test an idea before full implementation and
prepares for a better launch
- Without business planning, possibility of mistakes
in terms of financial and logical matters may lead
to potential problems even in the beginning of the
business. But having an excellent business plan
does not guarantee an entrepreneur from any
challenges during physical implementation of the
business plan. (Shamray, 2018)
- Business planning is portrayed as a key start-up
activity, aspiring entrepreneurs to perceive
desirable and effective activity that increases
chances of success (Cassar & Friedmann, 2009)
- Planning is predetermined course of action that
the manager involves:
1. Establishing purpose- managers tasked to discover
a vision
2. Setting goals- determine intended results to be
accomplished
3. Creating plans- structure and map the tasks to
accomplish goals
- Planning is an activity where goals are set,
environmental studies are made, planning
premises are considered and a plan is chalked out
 VMOSA- most commonly used in the planning process
- Vision, mission, objectives, strategies, and action
plans
- Practical planning process used to help
community groups define a vision and develop
practical ways to enact change
- Helps organization set and achieve short-term
goals while keeling sight of long term vision
 Characteristics of Planning
1. Planning is Goal Oriented- plans are always
anchored with vision, mission, goals, and
objectives of the company.
- Meaningless unless it is crafted to achieve the
predetermined goals.
2. Planning is a Primary Function- planning is the
foundation from all management functions
3. Planning is all Pervasive- spread throughout, can
be seen everywhere.
4. Planning is a Mental Exercise- planning is a
mental process that involves imagination, sound
judgment, and foresight
5. Planning a Continuous Process- planning is never-
ending activity, an ongoing process of adjustment
when there are changes and circumstances along
the way
6. Planning Involves Choice- having choices to
decide on and to use as alternative courses of
action
7. Planning is Forward Looking- planning is more
on looking beyond what you see, projecting and
predicting, and preparing for the future
8. Planning is Flexible- in business there is always
uncertainty so planners need to make necessary
changes in the existing plans
9. Planning is an Integrated Process- plans are
structured in logical manner, of which, it is highly
interdependent and mutually supportive in every
part of the plan; wherein every lower-level plan
serves as a means to support the higher-level
plans.
10. Planning Includes Efficiency and Effectiveness
Dimensions.- planning aims to manage resources
economically and efficiently and accomplish the
predetermined goals within the time-bound and
allotted resources
- Effectiveness- ability to adopt and manage the
specific knowledge and task
- Efficiency- ability to use and manage specific
knowledge and tasks with respect to time and
resources
Types of Plans
1. Operational Planning
- First-line management
- single use plans or ongoing plans—policies for
approaching problems, rules for specific
regulations, and procedures for step by step
process
- execution of tactical plan
- depends on daily or weekly schedules
- focuses on specific department or employees
2. Strategic Planning
- Top management
- Systematic route to untapped opportunities, which
lead to discovering new organizational strategies
- High-level overview of the entire business
- Foundational basis of the organization and will
dictate long-term decisions
- Important components—vision, mission, values
- Ability to lead the organization in the future and
decreases the failure opportunity
3. Tactical Planning
- Middle management
- More focused, specific, and short-term plans,
where actual work is being done and of support to
the high-level strategic plans
- Supports strategic planning
- Includes tactics that the organization plans to use
to achieve what’s outlined in the strategic plan
- More on decisions about materials flow,
inventory, and capacity utilization
4. Contingency Planning
- Middle management
Clarice Faith Torres
Organization Management Notes
Final Term
- Anticipated changes that cannot be foreseen
- Response to a potential crisis or emergency; plan
B services that make up the organization’s business
Planning at Different Levels
1. Corporate Level
- Overall strategic decision
2. Business Level
- Competitive environment
- SWOT
3. Functional Level
- Short-term plan for a key functional area within a
company
Planning Techniques and Tools and their Application
1. Forecasting
- Predicting future alternatives; choose which is
most probable or desirable; plan ahead
- Useful in planning and decision-making process
- Aims to characterize what the future will hold
- Has become difficult and challenging due to
greater uncertainty in operating environments
- Risk Based Forecasting and Planning (RBFP)—
more sophisticated and consistent identification,
quantification, and modeling all types of risks
- The more the impact of risk is identified and
measured, the more realistic estimates and
attainable goals can be aligned to financial and
strategic actions
- Reduce uncertainty
2. Scenario Plan
- Facilitated process to avoid biases in individual
and group decision making when faced in a long
term uncertainty
- Uncover and exploit uncertainty as a tool for
awareness building
- Consists of range of parameters to help
participants better understand their assumptions
about the future and test these against a range of
possible outcomes
 Best case scenario- what you want to experience in your
life; what you would like to happen
 Most likely scenario- what’ likely to happen
 Worst case scenario- most severe possible outcome
Powers of scenario planning
- Expand thinking
- Uncover inevitable or near inevitable future
- Protect against groupthink
- Allow challenging the conventional wisdom
Common Traps
- Do not rely on excessively narrow set of outcomes
- Do not use a single variable
- Do not become paralyzed by findings
- Do not discard scenarios too quickly
3. Participatory Planning
- Participatory Scenario Planning (PSP)
- Process that is engaged in highly collaborative
process and develops a leadership role
- Harmonizes views in constructive ways
4. Swot Analysis
- Framework used to evaluate the company position
by identifying its strengths, weaknesses,
opportunities, and threats
- Foundational assessment model that measures
what an organization can and cannot do
5. Portfolio Analysis
- Systematic way to analyze the products and
portfolio
 Common technique used to analyze an organization in
relation to its environment
 Focuses on organization’s products, services and
divisions or strategic business units (SBU)
 Commonly applied to firms with multiple SBU
 Used in making decisions about what SBU to expand,
maintain or retrench
6. Benchmarking
- Designed as a first step in evaluation process
towards reducing uncertainties
- One of the most successful processes of
assessment and improvement
- Comparing and competing
7. Gantt Chart
- Common planning tool
- Already available online
- Henry L Gantt
- Scheduling, allocation, and synchronization in the
planning of workflows and project management
- Temporal ordering of events without showing
their actual durations
Decision Making
Decision
- Have a vital role in company’s management
- Making a choice between alternatives
Decision Making Models
1. Cole 1991
- Define problem or issue
- Collect relevant data
- Develop alternative solutions
- Assess consequences
- Select optimum solutions
- Implement solution
- Measure results
2. Robbins, Coulter, Langton 2005
- Identification of a problem
- Identification of decision criteria
- Allocation of weights to criteria
- Development of alternatives
- Analysis of alternatives
- Selection of an alternative
- Implementation of alternative
- Evaluation of decision effectiveness
Clarice Faith Torres
Organization Management Notes
Final Term
Chapter 2: Organizing
“For every minute spent in organizing, an hour is earned”—
Benjamin Franklin
- Organization is crucial to success while
disorganization can wreak havoc on a person’s
daily routine. With this, structure in an
organization is vital—organizational structure—
shows strong body of duties and activities and can
lead to development or non-development of
knowledge management; shows the extent to
which companies plan for authority, decision
making power, standardization of regulations,
policies and cohesion of members and works for
their organization.
Characteristics of Organization
1. Organization is a group of individuals
2. Organization is a process
3. Organization is a “means” not an “end”
4. Organization is an important function of management
5. Organization is related to its objectives
6. Communication is the life of organization
2 essential concepts regarding organizing
1. Organization as a Process
- organizing a set of events in a plan that actively addresses
financial crises, economic and social inequalities, environmental
events, material resource scarcity, energy demands and
technological development.
- involves simple tasks or events—division of works,
determination of activities, grouping of activities, delegation of
authority, establishment of proper coordination, and balance among
various departments of individuals towards the attainment of
predetermined goals.
2. Organization as a Structure of Relationship
- organizational structure is a system that defines the hierarchy
within an organization—it seeks to establish relationships among
all the persons working in the organization.
- helps in identifying the jobs and its roles, functions, and their
hierarchical distribution.
Different Types of Organizational Structure
1. Basic Form
- Line Organization
- oldest form of organization—military, vertical, scalar,
departmental, organization
-any organization derived from a scalar process, there must be a
single head who commands it.
- although executive can delegate authority, he has ultimate
responsibility for results
- Line and Staff Organization
- structure in which managers take decisions and decides the role
for the employees
- based on the flow chart of delegation of authorities and
responsibilities from line managers to the employees.
- same with line, but some staff or experts are also appointed as
advisors to the line officers
- Functional Organization
- all activities are grouped together according to certain functions
like production, marketing, finance, and personnel and are put
under the charge of different persons
- work is divided into small units and allotted to different experts
- Committee Organization
- not a form of business organization that can be implemented
independently
- consists of group of people specially designed to perform some
administrative acts
- committee is a group of some persons who solves the problem
arising in the administrative sphere with the help of mutual
deliberations
2. Current Structure of the Organization
- Matrix Structure: best of the both functional and divisional
structures
- generally based on teams under the specialist boundaries
- individuals try to be more independent and improve their work
culture and also help each other to improve quality of work life
The senior managers guide and integrate the system rather than just
directing them.
Principles of Organization
1. The principles of Objectives-each part of organization should be
an expression of a defined purpose and must be in harmony with
the objectives of the organization.
2. The principle of authority and responsibility- person in higher
position should be vested with authority to control and direct the
team
3. The principle of ultimate authority- person with higher authority
is responsible for whatever the subordinates do
4. The principle of assignment of duties- members should be
assigned individual functions to perform to avoid confusion and
conflicts
5. The principle of definition- to ensure clarity and understanding
of roles, duties, authority, responsibilities and relationship of
members, should be clearly defined in writing
6. The principle of homogeneity- organization should be
designated where duties and activities that are similar or directly
related are combined for execution
7. The principle of organization effectiveness- work performance
by every worker should be thorough and without friction to ensure
effectiveness if the worker and the efficiency of the organization
Delegation
- Intentional transfer of tasks from one person to
another.
- Getting work done through others by giving them
authority and control of the work
- Allows involving subordinates in decision making
and transfer of power
- Rooted in organizational structures, decision
making and handling over authority
Process of Delegation
1. determination of results expected from persons in a position
2. assignment of tasks to person
3. delegation of authority for accomplishing these tasks
4. holding of people responsible for the accomplishment of these
tasks
Principles of Delegation
1. Principle of competence
2. Principle of trust and confidence
3. principle of parity
4. principle of unity of command
Clarice Faith Torres
Organization Management Notes
Final Term

5. principles of absolute responsibility

6. principle of communication
7. principle of effective control
8. principle of reward

Formal and Informal Organizations

Formal
- Organizations that are registered with the
government; and exhibiting organizational
institutionalization with a structured set of roles,
rules and behaviors
Function
- Hierarchy of authority
- Division of labor
- Technically competent participant
- Procedural devices for work situations
- Rules governing member actions
- Limited authority of office
- Differential rewards by office
- Administration is different from ownership
- Emphasis in written communication
- discipline
Informal
- Organizations that are not registered with the
government
Function
- Maintain cultural values of people
- Provide social satisfaction to members
- Provide effective means of communication
Features
- Depict very peculiar features
- Emerges from social interactions
- Tend to interact more with those whom they can
relate
- Exist in each and every enterprise
- Managers cannot prohibit informal organization,
they can only regulate them
- If employees do not gel with each other well, they
may not work cordially with cooperation