The importance of improving decision-making processes and effective means of management has made people to look into the possibility of planning. In today’s business world, planning has been linked to performance because it has helped save time, improve on efficiency, minimize on the barriers of processes, and increase accountability. On the one hand, rational decision-making through planning has been encouraged because of its ability to solve future problems and deal with challenges before they are realized. On the other hand, irrational decisions have been adopted in times of instability, need for quick fixes and have been discouraged as long-term approaches. Various managerial practices will be adopted under various circumstances in order that the organization will realign itself to gain advantages from the presented opportunities-either by internal or external factors. More over, planning may be used to achieve certain practices and techniques because it has so much to do with the day-to-day and general flow of the operations of the organization. Under the latter circumstances, managers find themselves adopting various techniques and practices to achieve the planned estimates and targets, and in some instances may be captive of the established rules, traditions and practices stipulated in the plan. Planning and rational deliberations seem to generate a structured approach to certain future problems and challenges. Rational deliberations produce a solution that is weighed in terms of the present and future projected conditions and a solution designed for the case in question.
Implementation of managerial practice may happen out of the need to improve performance or the image of the organization according to DiMaggio and Powell (1983; qtd. in Naveh & Marcus, n.d.). The authors argue that the first purpose (need to improve performance), is the intention of first movers whereas the second is the intention of second-movers. While second movers are pressurized by the institution to implement management practices in order to achieve legitimacy, first movers are influenced by the desire to improve their technical efficiencies by for example improving operating benefits and eliminating associated problems (Tolbert and Zucker, 1996; Naveh & Marcus, n.d.). First movers are therefore more likely to benefit from the adoption of management practices. The changes in these managerial practices may be caused by the careful planning and rational deliberation. The importance of careful planning and rational deliberation not only in the business set-up, but also any other social set-up has been explored. Strategic planning in an organization can result to change in the managerial practices in that it gives an insight to the future as perceived and expected. Along these changes in the management practices come organizational changes because the practices may determine the general flow or important elements of operations. Learning becomes an important aspect in implementing the management changes for the second movers because they can observe the innovation made by other organizations and how they perform. Thus the second-movers also have a chance to benefit by learning from the first -movers rather than through experience. Instead of implementing all changes, the second-movers may choose to implement changes they attach more value on.
Influence of Planning and Changes on Managerial Practices
Formal planning of organizations helps them focus on the likely future implications of the current decisions, as well as current problems for future events according to Loasby (1967; qtd. in Shukla, 2004). The organization can be able to come up with long-term indicators of success and monitor them. Careful Planning is therefore likely to cause change in the management practices because these practices will be inputs to achieve the desired results. In fact, planning in this case can be seen as setting the agenda for what to do and how it can be accomplished. As compared to rational decisions, careful planning is a strategy where firms can come up with prospects and procedures they expect to follow to achieve desired results. The change in management practices comes because there is an assumption that the planning is the ideal situation and must be followed. Research evidence on the importance and usage of long-range planning for American and the Indian firms exists, although research afterwards casts doubts on its usage with a mixed picture of its success (e.g. Rue and Fulmer, 1973; Copra,1989; Thune & House, 1970; Chaudhury, 1979; qtd. in Shukla, 2004).
Planning may be associated with better performance because it may lead to fixed focus on specified operations and this focus may quicken processes. Organizations develop structures and systems that encourage structured approach to matters so as to harmonize operations and adopt a homogenous approach to problems. In this manner, the practices adopted overtime may make managers to adapt to the channel thus the basis of approach to issues is merely the planning and rational deliberations.
Although formal planning has been linked to success in industries in a study that involved 36 companies investigated by Thune and House, it was improved performance that led to implementation of formal planning procedures for many industries like food processing and petroleum. The differences between industries as pertains success or the impact of formal planning has also been indicated in the aforementioned literature in the Thune and House case, with the authors’ findings appearing to be applicable to some industries (e.g. machinery and drug) and not others (e.g. food processing, oil and steel).This may further hint that the amount or level of managerial changes to be expected as a consequence of planning and rational deliberation could as well differ. But the relation may be complex in nature because of the various specifications, processes or even the level of risks and engagement. In some industries, planning would appear to be more complex to achieve because of the nature of the business and risks among other factors. Our analysis would only attract a discussion on the factors that influence the planning in various organizations, but simply put, these factors may be many and different depending on the industry in question. The results supposing that there is success for planners has been echoed in a study of 386 organizations by Rue and Fulmer (1973; qtd. in Shukla, 2004) where the planners performed better than non-planners. The aforementioned case applied to the industries dealing with durable goods. The position that differences in the viability of the long-range planning exists even depending on the specific environment of a given industry has been provided by Mintzberg (1976; qtd. in Shukla, 2004) who holds that an organization would not be better placed to use strategic planning in circumstances of stable environment or when they require a creative strategy, whereas formal, systematic strategic plans would be necessary for an organization operating in stable environment and has no use of very creative strategy. This points to another issue; that organization environment may also determine how much the changes would occur as a result of planning. Little or no change in one direction may be necessary as compared to change in another direction within the same firm. This may be figured out in the fact that an organization whose environment is stable may need to make more strategic plans which would favor changes in that direction, whereas that organization in an unstable environment may need to make irrational plans which pulls managerial changes in that direction. But the important thing is that there are more advantages resulting from usage of strategic and formal planning than irrational one because even the instability aforementioned could be internal. Whether strategic planning comes because of the need to organize activities and stabilize the organization with respect to internal and external environment may be the next item on the agenda. It may be theorized that the factors themselves will determine how the organization will respond, and because the organization will be obliged to, changes occur. Therefore, in one perspective, external factors (which may be out of control of the organization) may play a role in forcing the organization to conform or react in a different manner. The organization itself may find the need to reorganize its activities in order to stabilize in future and this inspires change. One may argue that managerial change is inspired by the planning and rational deliberations.
Organizations are always aiming higher in terms of more profits, sales, and public good among other things. This means that what they engage in need to be beneficial towards these goals. Vancil has theorized that performance of firms is influenced by the process of fixing targets rather than the targets themselves, which further implicates the Mintzberg position (1970; qtd. in Shukla, 2004).The importance of planning process can also be achieved in that it may make the managers engage in new functional processes such as improving communication systems, invest in the R&D. Rational deliberations may influence managers to initiate practices and techniques more easily because the managers may tend to believe and rely in the analyzed reports. Deliberations usually are accompanied with logical arguments and proofs on the subject matter in order to carry more weight. Therefore, in order to be meaningful, those who develop them may be participants in the Research & Development of the organization or a consultancy firm. They may be presented to managers as reports and analysis. Managers’ over-reliance on these analysis and reports may be experienced because the managers have many other issues to attend to and may not pay much keen detail into them. This means that they increase the likelihood of influencing managerial decisions and actions. Planning can be used to concentrate the resources of a given firm to the more important channels and activities when it involves careful deliberations into the activities that are to be carried out in future. In this way, the organization is able to improve on expense priorities and therefore cut on unnecessary spending which may come up as a result of expenses arising from irrational decisions due to quick needs focusing on the priority items that help improve budgeting and performance.
Influence of Managerial Practices and Techniques on Rationality and Planning
Change in managerial practices and techniques can result in planning where the organization seeks to structure itself to gain advantages presented by market conditions or eliminate certain barriers. These changes may involve application of various strategies, processes, equipments, styles and tools to running the operations in an attempt to recover from lost performance or improve performance. Under these circumstances, planning may be used to achieve stability in future. Although rational approach to organization management can result to planned and unplanned pay-offs, it can be perceived as with its limitations also. Once the organization decides to make rational deliberations and formal planning, it appears to be set to travel a road where it is disciplined to rigid and bureaucratic orientation. The organization may become more insensitive to changes in the market and other trends. This can be figured out with consideration that the firm continues to formulate rules, regulations and specified solutions to future problems. In fact, a thriving organization needs to be able to build systems through which they can quickly respond to quick changes in the market. This makes the view that organizational changes stimulate planning stronger.
Usage of rationalized approach is further complicated by the position held by Mintzberg (1975; 1976; qtd. in Shukla, 2004) that the realities of management are not static and analytical in nature but holistic and dynamic. In the day-to-day activities, managers will be forced to act sometimes against the planning or projections which may interrupt the whole plans or made it necessary to adjust the plans. This approach does not favor careful planning approach. This point to the possibility that changes in the organizations are what stimulates planning in instances where the managers do not strictly adhere to rational and formal planning to run the organization. Although there may be adherence to some sort of a general plan, minor interruptions to the projected plan may be necessary. This is understandable from the normal perspective because an organization will exist to improve operations through the most effective means other than focusing on the means of achieving the advantages.
Modern business world is encouraging the running of businesses through planning and rational deliberations because they encourage and enhance rational decision-making process. This process may make operations better. Managerial operations may be a means to improve image or operations. Planning may be associated with better performance because it may lead to fixed focus on specified operations and this focus may quicken processes. Rational deliberation provides a forum through which the organization can acquire specialized information developed in the understanding of the local and external factors because it consists of carefully weighing and analyzing of situations. Managers can use this one as a source of information to develop plan and design future solution to perceived problems. Organizations develop structures and systems that encourage structured approach to matters so as to harmonize operations and adopt a homogenous approach to problems. In this manner, the practices adopted overtime may make managers to adapt to the channel thus the basis of approach to issues is merely the planning and rational deliberations. Managers who develop this approach have their techniques and practices driven by the planning processes. Managerial practices and techniques influence planning and deliberations where for example the organization adopt a new criteria and approach to issues or undergo structural changes in order to improve operations or align itself to presented opportunities. Planning also influence managerial practices in that it present an opportunity for the organization to solve future challenges and problems.
References and Bibliography
DiMaggio, P. J., W. W. Powell. 1983. The iron cage revisited: Institutional isomorphism and collective rational in organizational fields. American Sociological Review 48 147-160.
Naveh Eitan, Alfred Marcus & Hyoung Koo Moon. Implementing a managerial practice: Advantage to first and second movers. 2009. Web.
Shukla Madhukar. 2004. Understanding Organizations: Organizational Theory and Practice in India. PHI Learning Pvt. Ltd.
Tolbert, P. S., L. G. Zucker. 1983. Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform, 1880-1935. Administrative Science Quarterly 28 22-39