Management Functions and Resources

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I. MANAGEMENT FUNCTIONS AND RESOURCES

PLANNING

in organizationsandpublic policy is both the organizational process of creating and maintaining a plan; and the

psychological process ofthinkingabout the activities required to create a desired goal on some scale. As such, it is a

fundamental property ofintelligent behavior. This thought process is essential to the creation and refinement of aplan, or

integration of it with other plans, that is, it combines forecasting of developments with the preparation of scenarios of how

to react to them.

The term is also used to describe the formal procedures used in such an endeavor, such as the creation of documents

diagrams, or meetings to discuss the important issues to be addressed, the objectives to be met, and the strategy to be

followed. Beyond this, planning has a different meaning depending on the political or economic context in which it is

used.

Two attitudes to planning need to be held in tension: on the one hand we need to be prepared for what may lie ahead,

which may mean contingencies and flexible processes. On the other hand, our future is shaped by consequences of our

own planning and actions.

Overview:

Planning is a process for accomplishing purpose. It is blue print of business growth and a road map of development. It

helps in deciding objectives both in quantitative and qualitative terms. It is setting of goals on the basis of objectives and

keeping in view the resources.

What should a plan be?

A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range

intermediate range or short range. It is the framework within which it must operate. For management seeking external

support, the plan is the most important document and key to growth. Preparation of a comprehensive plan will not

guarantee success, but lack of a sound plan will almost certainly ensure failure.

Purpose of Plan

Just as no two organizations are alike, so also their plans. It is therefore important to prepare a plan keeping in view the

necessities of the enterprise. A plan is an important aspect of business. It serves the following three critical functions:

Helps management to clarify, focus, and research their business's or project's development and prospects.

Provides a considered and logical framework within which a business can develop and pursue business strategies

over the next three to five years.

Offers a benchmark against which actual performance can be measured and reviewed.

Importance of the planning Process

A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. Preparing a satisfactory plan of

the organization is essential. The planning process enables management to understand more clearly what they want to

achieve, and how and when they can do it.

A well-prepared business plan demonstrates that the managers know the business and that they have thought through its

development in terms of products, management, finances, and most importantly, markets and competition.

Planning helps in forecasting the future, makes the future visible to some extent. It bridges between where we are and

where we want to go. Planning is looking ahead.
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Planning basics

Essentials of planning

Planning is not done off hand. It is prepared after careful and extensive research. For a comprehensive business plan,

management has to

1. Clearly define the target / goal in writing.

1. It should be set by a person having authority.2. The goal should be realistic.3. It should be specific.4. Acceptability5. Easily measurable

2. Identify all the main issues which need to be addressed.3. Review past performance.4. Decide budgetary requirement.5. Focus on matters of strategic importance.6. What are requirements and how will they be met?7. What will be the likely length of the plan and its structure?8. Identify shortcomings in the concept and gaps.

9. Strategies for implementation.10.Review periodically.

Applications

In organizations

Planning is also amanagement process, concerned with defining goals for future organizational performanceand deciding

on the tasks and resources to be used in order to attain those goals. To meet the goals, managers may develop plans such

as abusiness plan or a marketing plan. Planning always has a purpose. The purpose may be achievement of certain goals

or targets. The planning helps to achieve these goals or target by using the available time and resources. To minimize the

timing and resources also require proper planning. The concept of planning is to identify what the organization wants to

do by using the four questions which are where are we today in terms of our business or strategy planning? Where aregoing? Where do we want to go? How are we going to get there? [1]

In public policy

Planning refers to the practice and the profession associated with the idea of planning an idea yourself, (land use planning

urban planning orspatial planning). In many countries, the operation of a town and country planning system is often

referred to as 'planning' and the professionals which operate the system are known as 'planners'.......

It is a conscious as well as sub-conscious activity. It is an anticipatory decision making process that helps in coping

with complexities. It is deciding future course of action from amongst alternatives. It is a process that involves making

and evaluating each set of interrelated decisions. It is selection of missions, objectives and translation of knowledge into

action. A planned performance brings better results compared to unplanned one. A Managers job is planning

monitoring and controlling. Planning and goal setting are important traits of an organization. It is done at all levels of the

organization. Planning includes the plan, the thought process, action, and implementation.Planning gives more power over

the future. Planning is deciding in advance what to do, how to do it, when to do it, and who should do it. It bridges the gap

from where the organization is to where it wants to be. The planning function involves establishing goals and arranging

them in logical order.
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Purpose or importance of organization

Helps to achieve organizational goal

Organization is employed to achieve the overall objectives of business firms. Organization focuses attention of individuals

objectives towards overall objectives.

Optimum use of resources

To make optimum use of resources such as men, material, money, machine and method, it is necessary to design an

organization properly. Work should be divided and right people should be given right jobs to reduce the wastage ofresources in an organization.

To perform managerial function

Planning, Organizing, Staffing, Directing and Controlling cannot be implemented without proper organization.

Facilitates growth and diversification

A good organization structure is essential for expanding business activity. Organization structure determines the inputresources needed for expansion of a business activity similarly organization is essential for product diversification such as

establishing a new product line.

Human treatment of employees

Organization has to operate for the betterment of employees an must not encourage monotony of work due to higher

degree of specialization. Now, organization has adapted the modern concept of systems approach based on human

relations and it discards the traditional productivity and specialization approach.

Applications

Organizing, in companies point of view, is the management function that usually follows after planning. And it involvesthe assignment of tasks, the grouping of tasks into departments and the assignment of authority and allocation of resources

across the organization.

Structure

The framework in which the organization defines how tasks are divided, resources are deployed, and departments are

coordinated.

1. A set of formal tasks assigned to individuals and departments.2. Formal reporting relationships, including lines of authority, decision responsibility, numbe

of hierarchical levels and span of managers control.3. The design of systems to ensure effective coordination of employees across departments.

Work specialization

Work specialization (also called division of labour) is the degree to which organizational tasks are sub-divided into

individual jobs. With too much specialization, employees are isolated and do only a single, tiny, boring job. Many

organizations enlarge jobs or rotate assigned tasks to provide greater challenges.
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Chain of command

The chain of command is the unbroken line of authority that links all individuals in an organization, and specifies who

reports to whom.

o Unity of Command- one employee is held accountable to only one supervisoro Scalar principle - clearly defined line of authority in the organization that includes al

employees

Authority, responsibility, and accountability

Authority is a manager's formal and legitimate right to make decisions, issue orders, andallocate resources to achieve organizationally desired outcomes.

Responsibility means an employee's duty to perform assigned task or activities. Accountability means that those with authority and responsibility must report and justify

task outcomes to those above them in the chain of command.

Delegation

Delegation is the process managers use to transfer authority and responsibility to positions below them. Organizations

today tend to encourage delegation from highest to lowest possible levels. Delegation can improve flexibility to meet

customers needs and adaptation to competitive environments. Managers often find delegation difficult

Types of authority (and responsibility)

Line authority managers have the formal power to direct and control immediate subordinates. The superior issues orders

and is responsible for the resultthe subordinate obeys and is responsible only for executing the order according to

instructions.

Functional authority is where managers have formal power over a specific subset of activities. For instance, the

Production Manager may have the line authority to decide whether and when a new machine is needed but the Controllerdemands that a Capital Expenditure Proposal is submitted first, showing that the investment will have a yield of at least x%; or, a legal department may have functional authority to interfere in any activity that could have legal consequences.

This authority would not be functional but it would rather be staff authority if such interference is "advice" rather than

"order".

Staff authority is granted to staff specialists in their areas of expertise. It is not a real authority in the sense that a staffmanager does not order or instruct but simply advises, recommends, and counsels in the staff specialists' area of expertise

and is responsible only for the quality of the advice (to be in line with the respective professional standards etc) It is a

communication relationship with management. It has an influence that derives indirectly from line authority at a higher

level.

Span of management

Factors influencing larger span of management.

1. Work performed by subordinates is stable and routine.2. Subordinates perform similar work tasks.3. Subordinates are concentrated in a single location.4. Subordinates are highly trained and need little direction in performing tasks.5. Rules and procedures defining task activities are available.6. Support systems and personnel are available for the managers.
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7. Little time is required in non-supervisory activities such as coordination with otherdepartments or planning.

8. Managers' personal preferences and styles favour a large span.

Tall versus flat structure

Tall - A management structure characterized by an overall narrow span of managementand a relatively large number of hierarchical levels. Tight control.

Flat - A management structure characterized by a wide span of control and relatively fewhierarchical levels. Loose control. Facilitates delegation.

Centralization, decentralization, and formalization

Centralization - The location of decision making authority near top organizational levels. Decentralization - The location of decision making authority near lower organizationa

levels. Formalization - The written documentation used to direct and control employees.

Departmentalization

The basis on which individuals are grouped into departments and departments into total organizations.

Approach options include;

1. Functional - by common skills and work tasks2. Divisional - common product, program or geographical location3. Matrix - combination of Functional and Divisional4. Team - to accomplish specific tasks5. Network- departments are independent providing functions for a central core breaker

importance of organizing

Organizations are often troubled by how to organize, particularly when a new strategy isdeveloped

Changing market conditions or new technology requires change Organizations seek efficiencies through improvements in organizing

LEADING

A good leader inspires employees, boosts morale and encourages effective communication among employees. Excellent

leadership can even increase the organization's income.

As one of the four functions of management, leading can be both extremely important and challenging. Along with

planning, organizing and controlling, all managers will execute these four functions of management. From managing a

local store to managing a large corporation, every manager will perform each of the functions at some point in their jobs.
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Leading Means Inspiring

A manager should strive to become an inspiration to the rest of the employees. Employees will follow a manager because

the manager is the boss. However, a manager that is an inspiration means that employees follow that person because they

believe in what the manager is doing and they are trying to help the company achieve its goals. Finding ways to inspire

employees means coaching them and motivating them to succeed as integral parts of the company.

Leading Affects Morale

The way a manager leads greatly affects employee morale within the department and company as a whole. Managers

should create a climate that encourages new ideas and employee input. The more the employees feel that they have a say

in the company, the more they will be willing to share ideas and attempt to find better ways to improve processes. For

example, a good manager may reward employees with monetary or benefit incentives if they can increase output of a

product. Another idea is a treasure box of goodies. Managers can set a goal early in the week and employees who meet the

goal by the end of the week are allowed to take a prize from the treasure box.

Leading is Key to Effective Communication

For a manager to be an effective leader, he or she must also be an effective communicator. A manager that shares

information and lets employees know the latest news in the company is someone that is deemed trustworthy by his or her

employees. Employees feel little loyalty or trust towards a manager who does not readily give out information.

Leading Effectively Contributes More to the Bottom Line

An effective leader inspires employees, which allows those employees to feel like they are making a meaningful

contribution to the company. Satisfied employees generally work harder and take more ownership in their job positions.

This can mean happy customers and a higher level of customer service.

Leadership has been described as the process of social influence in which one person can enlist the aid and support ofothers in the accomplishment of a common task.[1] Definitions more inclusive of followers have also emerged. Alan

Keith of Genentech states that, "Leadership is ultimately about creating a way for people to contribute to making

something extraordinary happen."

[2]

According to Ken "SKC" Ogbonnia

[3]

, "effective leadership is the ability tosuccessfully integrate and maximize available resources within the internal and external environment for the attainment oforganizational or societal goals."

Leadership remains one of the most relevant aspects of the organizational context. However, defining leadership has been

challenging and definitions can vary depending on the situation. According to Ann Marie E. McSwain, Assistan

Professor at Lincoln University, leadership is about capacity: the capacity of leaders to listen and observe, to use theirexpertise as a starting point to encourage dialogue between all levels of decision-making, to establish processes and

transparency in decision-making, to articulate their own values and visions clearly but not impose them. Leadership is

about setting and not just reacting to agendas, identifying problems, and initiating change that makes for substantive

improvement rather than managing change.

The following sections discuss several important aspects of leadership including a description of what leadership is and adescription of several popular theories and styles of leadership. This article also discusses topics such as the role of

emotions and vision, as well as leadership effectiveness and performance, leadership in different contexts, how it may

differ from related concepts (i.e., management), and some critiques of leadership as generally conceived.

Leadership styles

Leadership styles refer to a leaders behaviour. It is the result of the philosophy, personality and experience of the leader.

[edit] Kurt Lewin's Leadership styles
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Kurt Lewin and colleagues identified different styles of leadership [48]:

Dictator Autocratic Participative Laissez Faire

[edit] Dictator Leaders

A leader who uses fear and threats to get the jobs done. As similar with a leader who uses an autocratic style of leadership

this style of leader also makes all the decisions.

[edit] Autocratic or Authoritarian Leaders

Under the autocratic leadership styles, all decision-making powers are centralized in the leader as shown such leaders are

dictators.

They do not entertain any suggestions or initiative from subordinates. The autocratic management has been successful as

it provides strong motivation to the manager. It permits quick decision-making as only one person decides for the whole

group, and keeps it to themselves until they feel it is needed by the rest of the group. An autocratic leader does not trust

anybody.

[edit] Participative or Democratic Leaders

The democratic leadership style favors decision-making by the group as shown, such as leader gives instruction after

consulting the group.

He can win the cooperation of his group and can motivate them effectively and positively. The decisions of the

democratic leader are not unilateral as with the autocrat because they arise from consultation with the group members and

participation by them.

[edit] Laissez Faire or Free Rein Leaders

A free rein leader does not lead, but leaves the group entirely to itself as shown; such a leader allows maximum freedom

to subordinates.

They are given a freehand in deciding their own policies and methods. Free rein leadership style is considered better thanthe authoritarian style. But it is not as effective as the democratic style.[citation needed]

[edit] Leadership performance

Main article: Leadership Performance

In the past, some researchers have argued that the actual influence of leaders on organizational outcomes is overrated and

romanticized as a result of biased attributions about leaders (Meindl & Ehrlich, 1987). Despite these assertions however, it

is largely recognized and accepted by practitioners and researchers that leadership is important, and research supports the

notion that leaders do contribute to key organizational outcomes (Day & Lord, 1988; Kaiser, Hogan, & Craig, 2008). In

order to facilitate successful performance it is important to understand and accurately measure leadership performance.

Job performance generally refers to behavior that is expected to contribute to organizational success (Campbell, 1990)

Campbell identified a number of specific types of performance dimensions; leadership was one of the dimensions that he

identified. There is no consistent, overall definition of leadership performance (Yukl, 2006). Many distinc

conceptualizations are often lumped together under the umbrella of leadershipperformance, including outcomes such as

leader effectiveness, leader advancement, and leader emergence (Kaiser et al., 2008). For instance, leadership
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performance may be used to refer to the career success of the individual leader, performance of the group or organization,

or even leader emergence. Each of these measures can be considered conceptually distinct. While these aspects may be

related, they are different outcomes and their inclusion should depend on the applied/research focus.

[edit] Contexts of leadership

[edit] Leadership in organizations

An organization that is established as an instrument or means for achieving defined objectiveshas been referred to as aformal organization. Its design specifies how goals are subdivided and reflected in subdivisions of the organization

Divisions, departments, sections, positions,jobs, andtasks make up this workstructure. Thus, the formal organization isexpected to behave impersonally in regard to relationships with clients or with its members. According to Weber's

definition, entry and subsequent advancement is by merit or seniority. Each employee receives a salary and enjoys a

degree of tenure that safeguards her/him from the arbitrary influence of superiors or of powerful clients. The higher his

position in the hierarchy, the greater his presumed expertise in adjudicating problems that may arise in the course of the

work carried out at lower levels of the organization. It is this bureaucratic structure that forms the basis for the

appointment of heads or chiefs of administrative subdivisions in the organization and endows them with the authority

attached to their position.[49]

In contrast to the appointed head or chief of an administrative unit, a leader emerges within the context of the informa

organization that underlies the formal structure. The informal organization expresses the personal objectives and goals othe individual membership. Their objectives and goals may or may not coincide with those of the formal organization

The informal organization represents an extension of the social structures that generally characterize human life the

spontaneous emergence of groups and organizations as ends in themselves.

In prehistoric times, humanity was preoccupied with personal security, maintenance, protection, and survival. Now

humanity spends a major portion of waking hours working for organizations. Her/His need to identify with a community

that provides security, protection, maintenance, and a feeling of belonging continues unchanged from prehistoric times.

This need is met by the informal organization and its emergent, or unofficial, leaders.[50]

Leaders emerge from within the structure of the informal organization. Their personal qualities, the demands of the

situation, or a combination of these and otherfactorsattract followers who accept their leadership within one or several

overlay structures. Instead of the authority of position held by an appointed head or chief, the emergent leader wieldsinfluence or power. Influence is the ability of a person to gain co-operation from others by means of persuasion or controlover rewards. Power is a stronger form of influence because it reflects a person's ability to enforce action through the

control of a means of punishment.[50]

A leader is a person who influences a group of people towards a specific result. It is not dependent on title or formal

authority. (elevos, paraphrased from Leaders, Bennis, and Leadership Presence, Halpern & Lubar). Leaders arerecognized by their capacity for caring for others, clear communication, and a commitment to persist.[51] An individua

who is appointed to a managerial position has the right to command and enforce obedience by virtue of the authority of

his position. However, she or he must possess adequate personal attributes to match his authority, because authority is

only potentially available to him. In the absence of sufficient personal competence, a manager may be confronted by an

emergent leader who can challenge her/his role in the organization and reduce it to that of a figurehead. However, only

authority of position has the backing of formal sanctions. It follows that whoever wields personal influence and power canlegitimize this only by gaining a formal position in the hierarchy, with commensurate authority. [50] Leadership can be

defined as one's ability to get others to willingly follow. Every organization needs leaders at every level.[52]

Leadership versus management

Over the years the philosophical terminology of "management" and "leadership" have, in the organisational context, been

used both as synonyms and with clearly differentiated meanings. Debate is fairly common about whether the use of these

terms should be restricted, and generally reflects an awareness of the distinction made by Burns (1978) between

"transactional" leadership (characterised by eg emphasis on procedures, contingent reward, management by exception)

and "transformational" leadership (characterised by eg charisma, personal relationships, creativity). That those two
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adjectives are in fact used equally well with the noun "management" as with the noun "leadership" indicates that there is

such a messy overlap between the two in academic practice that attempts to pontificate about their differences are largely

a waste of time.

[edit] Leadership by a group

In contrast to individual leadership, some organizations have adopted group leadership. In this situation, more than oneperson provides direction to the group as a whole. Some organizations have taken this approach in hopes of increasing

creativity, reducing costs, or downsizing. Others may see the traditional leadership of a bossas costing too much in team

performance. In some situations, the maintenance of the boss becomes too expensive - either by draining the resources of

the group as a whole, or by impeding the creativity within the team, even unintentionally.[citation needed]

A common example of group leadership involves cross-functional teams. A team of people with diverse skills and from

all parts of an organization assembles to lead a project. A team structure can involve sharing power equally on all issues

but more commonly uses rotating leadership. The team member(s) best able to handle any given phase of the projectbecome(s) the temporary leader(s). Additionally, as each team member has the opportunity to experience the elevated

level of empowerment, it energizes staff and feeds the cycle of success.[53]

Leaders who demonstrate persistence, tenacity, determination and synergistic communication skills will bring out thesame qualities in their groups. Good leaders use their own inner mentors to energize their team and organizations and leada team to achieve success.[54]

According to the National School Boards Association (USA)[55]

These Group Leadership or Leadership Teams have specific characteristics:

Characteristics of a Team

There must be an awareness of unity on the part of all its members. There must be interpersonal relationship. Members must have a chance to contribute

learn from and work with others. The member must have the ability to act together toward a common goal.

Ten characteristics of well-functioning teams:

Purpose: Members proudly share a sense of why the team exists and are invested inaccomplishing its mission and goals.

Priorities: Members know what needs to be done next, by whom, and by when to achieveteam goals.

Roles: Members know their roles in getting tasks done and when to allow a more skillfumember to do a certain task.

Decisions: Authority and decision-making lines are clearly understood. Conflict: Conflict is dealt with openly and is considered important to decision-making and

personal growth. Personal traits: members feel their unique personalities are appreciated and well utilized. Norms: Group norms for working together are set and seen as standards for every one in

the groups. Effectiveness: Members find team meetings efficient and productive and look forward to

this time together. Success: Members know clearly when the team has met with success and share in this

equally and proudly. Training: Opportunities for feedback and updating skills are provided and taken advantage

of by team members.
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[edit] Leadership among primates

Richard Wrangham and Dale Peterson, inDemonic Males: Apes and the Origins of Human Violence present evidence thaonly humans and chimpanzees, among all the animals living on earth, share a similar tendency for a cluster of behaviors

violence,territoriality, and competition for uniting behind the one chief male of the land. [56]This position is contentious

Many animals beyond apes are territorial, compete, exhibit violence, and have a social structure controlled by a dominant

male (lions, wolves, etc.), suggesting Wrangham and Peterson's evidence is not empirical. However, we must examine

other species as well, including elephants (which are undoubtedly matriarchal and follow an alpha female), meerkats (who

are likewise matriarchal), and many others.

It would be beneficial, to examine that most accounts of leadership over the past few millennia (since the creation of

Christian religions) are through the perspective of a patriarchal society, founded on Christian literature. If one looks

before these times, it is noticed that Pagan and Earth-based tribes in fact had female leaders. It is important also to note

that the peculiarities of one tribe cannot necessarily be ascribed to another, as even our modern-day customs differ. The

current day patrilineal custom is only a recent invention in human history and our original method of familial practices

were matrilineal (Dr. Christopher Shelley and Bianca Rus, UBC). The fundamental assumption that has been built into

90% of the world's countries is that patriarchy is the 'natural' biological predisposition of homo sapiens. Unfortunately,

this belief has led to the widespread oppression of women in all of those countries, but in varying degrees. (Whole Earth

Review, Winter, 1995 by Thomas Laird, Michael Victor). The Iroquoian First Nations tribes are an example of a

matrilineal tribe, along with Mayan tribes, and also the society of Meghalaya, India. (Laird and Victor, ).

By comparison,bonobos, the second-closest species-relatives of man, do notunite behind the chief male of the land. Thebonobos show deference to an alpha or top-ranking female that, with the support of her coalition of other females, can

prove as strong as the strongest male in the land. Thus, if leadership amounts to getting the greatest number of followers,

then among the bonobos, a female almost always exerts the strongest and most effective leadership. However, not all

scientists agree on the allegedly "peaceful" nature of the bonobo or its reputation as a "hippie chimp".[1]

Critical Thought on the concept of leadership

Noam Chomsky[59] and others[60] have brought critical thinking to the very concept of leadership and analyzed the

processes whereby people abrogate their responsibility to think and will actions for themselves. While the conventionaview of leadership is rather satisfying to people who "want to be told what to do", one should question why they are beingsubjected to a will or intellect other than their own if the leader is not a Subject Matter Expert (SME).

The fundamentally anti-democratic nature of the leadership principle is challenged by the introduction of concepts such as

autogestion, employeeship, common civic virtue, etc, which stress individual responsibility and/or group authority in the

work place and elsewhere by focusing on the skills and attitudes that a person needs in general rather than separating ouleadership as the basis of a special class of individuals.

Similarly various historical calamities are attributed to a misplaced reliance on theprinciple of leadership.

Controlling

is one of the managerial functions like planning, organizing, staffing and directing. It is an

important function because it helps to check the errors and to take the corrective action so that

deviation from standards are minimized and stated goals of the organization are achieved in

desired manner

According to modern concepts, control is a foreseeing action whereas earlier concept of control

was used only when errors were detected. Control in management means setting standards,

measuring actual performance and taking corrective action. Thus, control comprises these three

main activities.
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Definitions

According toHenri Fayol,

Control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which hasbeen adopted, the orders which have been given, and the principles which have been laid down. Its object is to point outmistakes in order that they may be rectified and prevented from recurring.

According toEFL Breach,

Control is checking current performance against pre-determined standards contained in the plans, with a view to ensureadequate progress and satisfactory performance.

According toHarold Koontz,

Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and theplans devised to attain them are accomplished.

According toStafford Beer,

Management is the profession of control.

In 1916,Henri Fayolformulated one of the first definitions of control as it pertains to management:

Control consists of verifying whether everything occurs in conformity with the plan adopted, the instructions issued, andprinciples established. It ['s] object [is] to point out weaknesses and errors in order to rectify [them] and preventrecurrence.[1]

Robert J. Mocklerpresented a more comprehensive definition of managerial control:

Management control can be defined as a systematic effort by business management to compare performance topredetermined standards, plans, or objectives in order to determine whether performance is in line with these standardsand presumably in order to take any remedial action required to see that human and other corporate resources are beingused in the most effective and efficient way possible in achieving corporate objectives.[2]

Also control can be defined as "that function of the system that adjusts operations as needed to achieve the plan, or tomaintain variations from system objectives within allowable limits". The control subsystem functions in close harmony

with the operating system. The degree to which they interact depends on the nature of the operating system and its

objectives. Stability concerns a system's ability to maintain a pattern of output without wide fluctuations. Rapidity of

response pertains to the speed with which a system can correct variations and return to expected output. [3]

A political election can illustrate the concept of control and the importance of feedback. Each party organizes a campaign

to get its candidate selected and outlines a plan to inform the public about both the candidate's credentials and the party's

platform. As the election nears, opinion polls furnish feedback about the effectiveness of the campaign and about eachcandidate's chances to win. Depending on the nature of this feedback, certain adjustments in strategy and/or tactics can be

made in an attempt to achieve the desired result.

From these definitions it can be stated that there is close link between planning and controlling. Planning is a process by

which an organisation's objectives and the methods to achieve the objectives are established, and controlling is a process

which measures and directs the actual performance against the planned objectives of the organisation. Thus, planning and

control are often referred to as siamese twins ofmanagement.

Characteristics of Control

Control is a continuous process
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Control is a management process

Control is embedded in each level of organizational hierarchy

Control is forward looking

Control is closely linked with planning

Control is a tool for achieving organizational activities

The elements of control

The four basic elements in a control system (1) the characteristic or condition to be controlled, (2) the sensor, (3) the

comparator , and (4) the activator occur in the same sequence and maintain a consistent relationship to each other in

every system.[3]

The first element is the characteristic or condition of the operating system which is to be measured. We select a specificcharacteristic because a correlation exists between it and how the system is performing. The characteristic may be the

output of the system during any stage of processing or it may be a condition that has resulted from the output of the

system. For example, it may be the heat energy produced by the furnace or the temperature in the room which has

changed because of the heat generated by the furnace. In an elementary school system, the hours a teacher works or thegain in knowledge demonstrated by the students on a national examination are examples of characteristics that may be

selected for measurement, or control.

The second element ofcontrol, thesensor, is a means for measuring the characteristic or condition. The control subsystemmust be designed to include a sensory device or method of measurement. In a home heating system this device would bethe thermostat, and in a quality-control system this measurement might be performed by a visual inspection of the

product.

The third element of control, the comparator, determines the need for correction by comparing what is occurring with

what has been planned. Some deviation from plan is usual and expected, but when variations are beyond those considered

acceptable, corrective action is required. It is often possible to identify trends in performance and to take action before an

unacceptable variation from the norm occurs. This sort of preventative action indicates that good control is being

achieved.

The fourth element of control, the activator, is the corrective action taken to return the system to expected output. The

actual person, device, or method used to direct corrective inputs into the operating system may take a variety of forms. Itmay be a hydraulic controller positioned by a solenoid or electric motor in response to an electronic error signal, an

employee directed to rework the parts that failed to pass quality inspection, or a school principal who decides to buy

additional books to provide for an increased number of students. As long as a plan is performed within allowable limits

corrective action is not necessary; this seldom occurs in practice, however.

Information is the medium of control, because the flow of sensory data and later the flow of corrective information allow

a characteristic or condition of the system to be controlled. To illustrate how information flow facilitates control, let us

review the elements of control in the context of information.[4]

Relationship between the elements of control and information

Controlled Characteristic or. Condition The primary requirement of a control system is that it maintain the level andkind of output necessary to achieve the system's objectives.[5] It is usually impractical to control every feature and

condition associated with the system's output. Therefore, the choice of the controlled item (and appropriate information

about it) is extremely important. There should be a direct correlation between the controlled item and the system's

operation. In other words, control of the selected characteristic should have a direct relationship to the goal or objective of

the system.

Sensor

After the characteristic is sensed, or measured, information pertinent to control is fed back. Exactly what informationneeds to be transmitted and also the language that will best facilitate the communication process and reduce the possibility
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[edit] Kinds of control

Control may be grouped according to three general classifications: (1) the nature of the information flow designed into the

system (that is, open- or closed-loop control), (2) the kind of components included in the design (that is man or machine

control systems), and (3) the relationship of control to the decision process (that is, organizational or operational control).[3]

[edit] Open- and Closed-Loop Control

The difference between open-loop control and closed-loop control is determined by whether all of the control elements are

an integral part of the system being regulated, and whether allowable variations from standard have been predetermined.In an open-loop system, not all of the elements will be designed into the system, and/or allowable variations will not be

predetermined.

A street-lighting system controlled by a timing device is an example of an open-loop system. At a certain time each

evening, a mechanical device closes the circuit and energy flows through the electric lines to light the lamps. Notehowever, that the timing mechanism is an independent unit and is not measuring the objective function of the lighting

system. If the lights should be needed on a dark, stormy day the timing device would not recognize this need and therefore

would not activate energy inputs. Corrective properties may sometimes be built into the controller (for example, to modify

the time the lights are turned on as the days grow shorter or longer), but this would not close the loop. In another instance

the sensing, comparison, or adjustment may be made through action taken by an individual who is not part of the system.For example, the lights may be turned on by someone who happens to pass by and recognizes the need for additional light

If control is exercised as a result of the operation rather than because of outside or predetermined arrangements, it is a

closed-loop system. The home thermostat is the classic example of a control device in a closed-loop system. When theroom temperature drops below the desired point, the control mechanism closes the circuit to start the furnace and the

temperature rises. The furnace-activating circuit is turned off as the temperature reaches the preselected level. The

significant difference between this type of system and an open-loop system is that the control device is an element of the

system it serves and measures the performance of the system. In other words, all four control elements are integral to the

specific system.

An essential part of a closed-loop system is feedback; that is, the output of the system is measured continually through the

item controlled, and the input is modified to reduce any difference or error toward zero. Many of the patterns oinformation flow in organizations are found to have the nature of closed loops, which use feedback. The reason for such acondition is apparent when one recognizes that any system, if it is to achieve a predetermined goal, must have available to

it at all times an indication of its degree of attainment. In general, every goal-seeking system employs feedback.[3]

[edit] Man and Machine Control

The elements of control are easy to identify in machine systems. For example, the characteristic to be controlled might be

some variable like speed or temperature, and the sensing device could be a speedometer or a thermometer. An expectation

of precision exists because the characteristic is quantifiable and the standard and the normal variation to be expected can

be described in exact terms. In automatic machine systems, inputs of information are used in a process of continuaadjustment to achieve output specifications. When even a small variation from the standard occurs, the correction process

begins. The automatic system is highly structured, designed to accept certain kinds of input and produce specific output,and programmed to regulate the transformation of inputs within a narrow range of variation.[6]

For an illustration of mechanical control, as the load on a steam engine increases and the engine starts to slow down, theregulator reacts by opening a valve that releases additional inputs of steam energy. This new input returns the engine to

the desired number of revolutions per minute. This type of mechanical control is crude in comparison to the more

sophisticated electronic control systems in everyday use. Consider the complex missile-guidance systems that measure the

actual course according to predetermined mathematical calculations and make almost instantaneous corrections to direct

the missile to its target.
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Machine systems can be complex because of the sophisticated technology, whereas control of people is complex because

the elements of control are difficult to determine. In human control systems, the relationship between objectives and

associated characteristics is often vague; the measurement of the characteristic may be extremely subjective; the expected

standard is difficult to define; and the amount of new inputs required is impossible to quantify. To illustrate, let us refer

once more to a formalized social system in which deviant behavior is controlled through a process of observed violation

of the existing law (sensing), court hearings and trials (comparison with standard), incarceration when the accused is

found guilty (correction), and release from custody after rehabilitation of the prisoner has occurred. [6]

The speed limit established for freeway driving is one standard of performance that is quantifiable, but even in this

instance, the degree of permissible variation and the amount of the actual variation are often a subject of disagreement

between the patrolman and the suspected violator. The complexity of our society is reflected in many of our laws and

regulations, which establish the general standards for economic, political, and social operations. A citizen may not know

or understand the law and consequently would not know whether or not he was guilty of a violation.

Most organized systems are some combination of man and machine; some elements of control may be performed by

machine whereas others are accomplished by man. In addition, some standards may be precisely structured whereas others

may be little more than general guidelines with wide variations expected in output. Man must act as the controller when

measurement is subjective and judgment is required. Machines such as computers are incapable of making exceptions

from the specified control criteria regardless of how much a particular case might warrant special consideration. A pilot

acts in conjunction with computers and automatic pilots to fly large jets. In the event of unexpected weather changes, or

possible collision with another plane, he must intercede and assume direct control.[4]

[edit] Organizational and Operational Control

The concept of organizational control is implicit in the bureaucratic theory ofMax Weber. Associated with this theory aresuch concepts as "span of control", "closeness of supervision", and "hierarchical authority". Weber's view tends to include

all levels or types of organizational control as being the same. More recently, writers have tended to differentiate the

control process between that which emphasizes the nature of the organizational or systems design and that which deals

with daily operations. To illustrate the difference, we "evaluate" the performance of a system to see how effective and

efficient the design proved to be or to discover why it failed. In contrast, we operate and "control" the system with respec

to the daily inputs of material, information, and energy. In both instances, the elements of feedback are present, but

organizational control tends to review and evaluate the nature and arrangement of components in the system, whereas

operational control tends to adjust the daily inputs.

The direction for organizational control comes from the goals and strategic plans of the organization. General plans are

translated into specific performance measures such as share of the market, earnings,return on investment, andbudgets

The process of organizational control is to review and evaluate the performance of the system against these established

norms. Rewards for meeting or exceeding standards may range from special recognition to salaryincreases orpromotions

On the other hand, a failure to meet expectations may signal the need to reorganize or redesign.[7]

In organizational control, the approach used in the program of review and evaluation depends on the reason for the

evaluation that is, is it because the system is not effective (accomplishing its objectives)? Is the system failing to

achieve an expected standard of efficiency? Is the evaluation being conducted because of a breakdown or failure inoperations? Is it merely a periodic audit-and-review process?

When a system has failed or is in great difficulty, special diagnostic techniques may be required to isolate the trouble

areas and to identify the causes of the difficulty. It is appropriate to investigate areas that have been troublesome before or

areas where some measure of performance can be quickly identified. For example, if an organization's output backlog

builds rapidly, it is logical to check first to see if the problem is due to such readily obtainable measures as increased

demand or to a drop in available man hours. When a more detailed analysis is necessary, a systematic procedure should be

followed.[7]

In contrast to organizational control, operational control serves to regulate the day-to-day output relative to schedulesspecifications, and costs. Is the output of product or service the properquality and is it available as scheduled? Are

inventories of raw materials, goods-in-process, and finished products being purchased and produced in the desiredquantities? Are the costs associated with the transformation process in line with cost estimates? Is the information needed
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in the transformation process available in the right form and at the right time? Is the energy resource being utilizedefficiently?

The most difficult task of management concerns monitoring the behavior of individuals, comparing performance to some

standard, and providing rewards or punishment as indicated. Sometimes this control over people relates entirely to their

output. For example, a managermight not be concerned with the behavior of a salesman as long as sales were as high as

expected. In other instances, close supervision of the salesman might be appropriate if achieving customersatisfaction

were one of the sales organization's main objectives.

The larger the unit, the more likely that the control characteristic will be related to some output goal. It also follows that if

it is difficult or impossible to identify the actual output of individuals, it is better to measure the performance of the entiregroup. This means that individuals' levels of motivation and the measurement of their performance become subjective

judgments made by the supervisor. Controlling output also suggests the difficulty of controlling individuals' performance

and relating this to the total system's objectives.[7]

[edit] Problems of control

The perfect plan could be outlined if every possible variation of input could be anticipated and if the system would

operate as predicted. This kind of planning is neither realistic, economical, nor feasible for most business systems. If i

were feasible, planning requirements would be so complex that the system would be out of date before it could be

operated. Therefore, we design control into systems. This requires more thought in the systems design but allows moreflexibility of operations and makes it possible to operate a system using unpredictable components and undetermined

input. Still, the design and effective operation of control are not without problems.

The objective of the system is to perform some specified function. The purpose of organizational control is to see that the

specified function is achieved; the objective of operational control is to ensure that variations in daily output are

maintained within prescribed limits. It is one thing to design a system that contains all of the elements of control, and

quite another to make it operate true to the best objectives of design. Operating "in control" or "with plan" does not

guarantee optimum performance. For example, the plan may not make the best use of the inputs of materials, energy, or

information in other words, the system may not be designed to operate efficiently. Some of the more typical problemsrelating to control include the difficulty of measurement, the problem of timing information flow, and the setting of proper

standards. [7]

[edit] Measurement of Output

When objectives are not limited to quantitative output, the measurement of system effectiveness is difficult to make and

subsequently perplexing to evaluate. Many of the characteristics pertaining to output do not lend themselves to

quantitative measurement. This is true particularly when inputs of human energy cannot be related directly to output. The

same situation applies to machines and other equipment associated with human involvement, when output is not inspecific units. In evaluating man-machine or human-oriented systems, psychological and sociological factors obviously do

not easily translate into quantifiable terms.For example, how does mental fatigue affect the quality or quantity of output?And, if it does, is mental fatigue a function of the lack of a challenging assignment or the fear of a potential injury?

Subjective inputs may be transferred into numerical data, but there is always the danger of an incorrect appraisal and

transfer, and the danger that the analyst may assume undue confidence in such data after they have been quantified. Let ussuppose, for example, that the decisions made by an executive are rated from 1 to 10, 10 being the perfect decision. After

determining the ranking for each decision, adding these, and dividing by the total number of decisions made, the average

ranking would indicate a particular executive's score in his decision-making role. On the basis of this score, judgments which could be quite erroneous might be made about his decision-making effectiveness. One executive with a ranking

of 6.75 might be considered more effective than another who had a ranking of 6.25, and yet the two managers may have

made decisions under different circumstances and conditions. External factors over which neither executive had any

control may have influenced the difference in "effectiveness". [7]
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Quantifying human behavior, despite its extreme difficulty, subjectivity, and imprecision in relation to measuring physica

characteristics is the most prevalent and important measurement made in large systems. The behavior of individuals

ultimately dictates the success or failure of every man-made system.

Information Flow

Another problem of control relates to the improper timing of information introduced into the feedback channel. Improper

timing can occur in both computerized and human control systems, either by mistakes in measurement or in judgment.

The more rapid the system's response to an error signal, the more likely it is that the system could overadjust; yet the needfor prompt action is important because any delay in providing corrective input could also be crucial. A system generating

feedback inconsistent with current need will tend to fluctuate and will not adjust in the desired manner.

The most serious problem in information flow arises when the delay in feedbackis exactly one-half cycle, for then the

corrective action is superimposed on a variation from norm which, at that moment, is in the same direction as that of the

correction. This causes the system to overcorrect, and then if the reverse adjustment is made out of cycle, to correct too

much in the other direction, and so on until the system fluctuates ("oscillates") out of control. This phenomenon is

illustrated in Figure 1. Oscillation and Feedback. If, at Point A, the trend below standard is recognized and new inputs

are added, but not until Point B, the system will overreact and go beyond the allowable limits. Again, if this is recognized

at Point C, but inputs are not withdrawn until Point D, it will cause the system to drop below the lower limit of allowable

variation.[3]

One solution to this problem rests in anticipation, which involves measuring not only the change but also the rate of

change. The correction is outlined as a factor of the type and rate of the error. The difficulty also might be overcome by

reducing the time lag between the measurement of the output and the adjustment to input. If a trend can be indicated, a

time lead can be introduced to compensate for the time lag, bringing about consistency between the need for correction

and the type and magnitude of the indicated action. It is usually more effective for an organization to maintain continuous

measurement of its performance and to make small adjustments in operations constantly (this assumes a highly sensitive

control system). Information feedback, consequently, should be timely and correct to be effective. That is, the information

should provide an accurate indication of the status of the system. [3]

Setting Standards

Setting the proper standards or control limits is a problem in many systems. Parents are confronted with this dilemma inexpressing what they expect of their children, and business managers face the same issue in establishing standards thatwill be acceptable to employees. Some theorists have proposed that workers be allowed to set their own standards, on the

assumption that when people establish their own goals, they are more apt to accept and achieve them.

Standards should be as precise as possible and communicated to all persons concerned. Moreover, communication alone

is not sufficient; understanding is necessary. In human systems, standards tend to be poorly defined and the allowablerange of deviation from standard also indefinite. For example, how many hours each day should a professor be expected

to be available for student consultation? Or, what kind of behavior should be expected by students in the classroom?

Discretion and personal judgment play a large part in such systems, to determine whether corrective action should be

taken.

Perhaps the most difficult problem in human systems is the unresponsiveness of individuals to indicated correction. Thismay take the form of opposition and subversion to control, or it may be related to the lack of defined responsibility or

authority to take action. Leadership and positive motivation then become vital ingredients in achieving the proper

response to input requirements.

Most control problems relate to design; thus the solution to these problems must start at that point. Automatic control

systems, provided that human intervention is possible to handle exceptions, offer the greatest promise. There is a danger,

however, that we may measure characteristics that do not represent effective performance (as in the case of the speaker

who requested that all of the people who could not hear what he was saying should raise their hands), or that improperinformation may be communicated. [3
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II. THE INDUSTRY AND MANAGEMENT

Foreign and local management

international business = Business transactions crossing national borders at any stage of the transaction.

Is The Difference Important?

I often talk to people that have different definitions or conceptions of what an international business is. These

differences are so inbred, that I often find myself totally avoiding the words international business to avoidmiscommunication.

People contact me because they want to develop their international business. The miscommunication problems

are usually centered around the word business. To me a business has a structure. At the very minimum thereis buying and selling carried out within a defined structure and with certain processes.

You cannot say you have an international business until you have a clearly defined structure to carry out your

buying and selling.

What Is Global?

With internet, there is an additional monkey wrench. Everyone tends to think they have an international

company just because they say they are willing to sell to people abroad. Often this means that the people

abroad have to come looking for them too. all to often there is no business, just a bright shiny desire to sell

abroad.

This is where two people can think they are speaking about the same thing, when in fact they are not. The

problem gets more complicated when people say that global business and international business is the same

thing. In a general conversation this can be true, to some extent. But it is not true when you are talking aboutinternational business.

My Definition Of International Business

I tend to use two different definitions for the term international business, depending on what I am talking

about.

General meaning Any business that has international clients buyers and sellers locatedin different countries.

Specific meaning To differentiate from an export company, an international company

takes country-specific marketing and sales actions to sell their products in differentcountries.

And because of the difficulties I have in communicating with some clients, I try my best to avoid the termglobal business. The term global business just opens a can of worms.

Differences In Communication

In reality, I can use whatever definition I want to for international business, and I will always have acommunication issue to deal with if the other person does not understand my definition.


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This also goes for you and your definition of the term international business.

Be sure others understand, and continue to understand your definition of internationalbusiness.

In my experience, it is also wise not to interchange your use the term global business and international

business. In fact I do not even use the term global business with anyone I speak to about international

business. The word global can trigger different definitions and change the discussion.

The question of vocabulary may seem like an innocent one. There are dictionaries after all. The truth is thatvocabulary does make a big difference in how others understand you. In different countries, words can take on

slightly different meanings. Yes, even when you speak in English.

Participate in the March Cross Cultural Communication Challengeand learn more ways to improve your cross-

cultural communication.

Government regulation

Most legaljurisdictions specify the forms of ownership that a business can take, creating a body ofcommerciallaw for each type.

[edit] Organizing

The major factors affecting how a business is organized are usually:

The size and scope of the business, and its anticipated management and ownership.

Generally a smaller business is more flexible, while larger businesses, or those with widerownership or more formal structures, will usually tend to be organized as partnerships or(more commonly) corporations. In addition a business which wishes to raise money on astock market or to be owned by a wide range of people will often be required to adopt aspecific legal form to do so.

The sector and country. Private profit making businesses are different from governmentowned bodies. In some countries, certain businesses are legally obliged to be organizedcertain ways.

Limited liability.Corporations, limited liability partnerships, and other specific types ofbusiness organizations protect their owners or shareholders from business failure by doingbusiness under a separate legal entity with certain legal protections. In contrast,unincorporated businesses or persons working on their own are usually not so protected.

Tax advantages. Different structures are treated differently in tax law, and may haveadvantages for this reason.

Disclosure and compliance requirements. Different business structures may berequired to make more or less information public (or reported to relevant authorities), andmay be bound to comply with different rules and regulations.

Many businesses are operated through a separate entity such as a corporation or a partnership (either formed

with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing

certain charter documents with t

Management Functions and Resources

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