Principles of Management

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1.5 Planning, Organizing, Leading, and

Controlling

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Learning Objectives

1. Know the dimensions of the planning-organizing-leading-controlling

(P-O-L-C) framework.
2. Know the general inputs into each P-O-L-C dimension.
A manager’s primary challenge is to solve problems creatively. While
drawing from a variety of academic disciplines, and to help managers
respond to the challenge of creative problem solving, principles of
management have long been categorized into the four major functions of
planning, organizing, leading, and controlling (the P-O-L-C framework).
The four functions, summarized in the P-O-L-C figure, are actually
highly integrated when carried out in the day-to-day realities of running
an organization. Therefore, you should not get caught up in trying to
analyze and understand a complete, clear rationale for categorizing skills
and practices that compose the whole of the P-O-L-C framework.
It is important to note that this framework is not without criticism.
Specifically, these criticisms stem from the observation that the P-O-L-C
functions might be ideal but that they do not accurately depict the day-
to-day actions of actual managers (Mintzberg, 1973; Lamond, 2004). The
typical day in the life of a manager at any level can be fragmented and
hectic, with the constant threat of having priorities dictated by the law of
the trivial many and important few (i.e., the 80/20 rule). However, the
general conclusion seems to be that the P-O-L-C functions of
management still provide a very useful way of classifying the activities
managers engage in as they attempt to achieve organizational goals
(Lamond, 2004).
Figure 1.7 The P-O-L-C Framework

Planning
Planning is the function of management that involves setting objectives
and determining a course of action for achieving those objectives.
Planning requires that managers be aware of environmental conditions
facing their organization and forecast future conditions. It also requires
that managers be good decision makers.
Planning is a process consisting of several steps. The process begins
with environmental scanning which simply means that planners must be
aware of the critical contingencies facing their organization in terms of
economic conditions, their competitors, and their customers. Planners
must then attempt to forecast future conditions. These forecasts form the
basis for planning.
Planners must establish objectives, which are statements of what needs
to be achieved and when. Planners must then identify alternative courses
of action for achieving objectives. After evaluating the various
alternatives, planners must make decisions about the best courses of
action for achieving objectives. They must then formulate necessary
steps and ensure effective implementation of plans. Finally, planners
must constantly evaluate the success of their plans and take corrective
action when necessary.
There are many different types of plans and planning.
Strategic planning involves analysing competitive opportunities and
threats, as well as the strengths and weaknesses of the organization, and
then determining how to position the organization to compete effectively
in their environment. Strategic planning has a long time frame, often
three years or more. Strategic planning generally includes the entire
organization and includes formulation of objectives. Strategic planning is
often based on the organization’s mission, which is its fundamental
reason for existence. An organization’s top management most often
conducts strategic planning.
Tactical planning is intermediate-range (one to three years) planning
that is designed to develop relatively concrete and specific means to
implement the strategic plan. Middle-level managers often engage in
tactical planning.
Operational planning generally assumes the existence of organization-
wide or subunit goals and objectives and specifies ways to achieve them.
Operational planning is short-range (less than a year) planning that is
designed to develop specific action steps that support the strategic and
tactical plans.

Organizing
Organizing is the function of management that involves developing an
organizational structure and allocating human resources to ensure the
accomplishment of objectives. The structure of the organization is the
framework within which effort is coordinated. The structure is usually
represented by an organization chart, which provides a graphic
representation of the chain of command within an organization.
Decisions made about the structure of an organization are generally
referred to as organizational design decisions.
Organizing also involves the design of individual jobs within the
organization. Decisions must be made about the duties and
responsibilities of individual jobs, as well as the manner in which the
duties should be carried out. Decisions made about the nature of jobs
within the organization are generally called “job design” decisions.
Organizing at the level of the organization involves deciding how best to
departmentalize, or cluster, jobs into departments to coordinate effort
effectively. There are many different ways to departmentalize, including
organizing by function, product, geography, or customer. Many larger
organizations use multiple methods of departmentalization.
Organizing at the level of a particular job involves how best to design
individual jobs to most effectively use human resources.
Traditionally, job design was based on principles of division of labor and
specialization, which assumed that the more narrow the job content, the
more proficient the individual performing the job could become.
However, experience has shown that it is possible for jobs to become too
narrow and specialized. For example, how would you like to screw lids
on jars one day after another, as you might have done many decades ago
if you worked in company that made and sold jellies and jams? When
this happens, negative outcomes result, including decreased job
satisfaction and organizational commitment, increased absenteeism, and
turnover.
Recently, many organizations have attempted to strike a balance
between the need for worker specialization and the need for workers to
have jobs that entail variety and autonomy. Many jobs are now designed
based on such principles as empowerment, job
enrichment and teamwork. For example, HUI Manufacturing, a custom
sheet metal fabricator, has done away with traditional “departments” to
focus on listening and responding to customer needs. From company-
wide meetings to team huddles, HUI employees know and understand
their customers and how HUI might service them best (Huimfg, 2008).

Leading
Leading involves the social and informal sources of influence that you
use to inspire action taken by others. If managers are effective leaders,
their subordinates will be enthusiastic about exerting effort to attain
organizational objectives.
The behavioral sciences have made many contributions to understanding
this function of management. Personality research and studies of job
attitudes provide important information as to how managers can most
effectively lead subordinates. For example, this research tells us that to
become effective at leading, managers must first understand their
subordinates’ personalities, values, attitudes, and emotions.
Studies of motivation and motivation theory provide important
information about the ways in which workers can be energized to put
forth productive effort. Studies of communication provide direction as to
how managers can effectively and persuasively communicate. Studies of
leadership and leadership style provide information regarding questions,
such as, “What makes a manager a good leader?” and “In what situations
are certain leadership styles most appropriate and effective?”
Figure 1.8
Quality control ensures that the organization delivers on its promises.

International Maize and Wheat Improvement Center – Maize seed quality control at small
seed company Bidasem – CC BY-NC-SA 2.0.

Controlling
Controlling involves ensuring that performance does not deviate from
standards. Controlling consists of three steps, which include (1)
establishing performance standards, (2) comparing actual performance
against standards, and (3) taking corrective action when necessary.
Performance standards are often stated in monetary terms such as
revenue, costs, or profits but may also be stated in other terms, such as
units produced, number of defective products, or levels of quality or
customer service.
The measurement of performance can be done in several ways,
depending on the performance standards, including financial
statements, sales reports, production results, customer satisfaction, and
formal performance appraisals. Managers at all levels engage in the
managerial function of controlling to some degree.
The managerial function of controlling should not be confused with
control in the behavioral or manipulative sense. This function does not
imply that managers should attempt to control or to manipulate the
personalities, values, attitudes, or emotions of their subordinates.
Instead, this function of management concerns the manager’s role in
taking necessary actions to ensure that the work-related activities of
subordinates are consistent with and contributing toward the
accomplishment of organizational and departmental objectives.
Effective controlling requires the existence of plans, since planning
provides the necessary performance standards or objectives. Controlling
also requires a clear understanding of where responsibility for deviations
from standards lies. Two traditional control techniques are budget and
performance audits. An audit involves an examination and verification of
records and supporting documents. A budget audit provides information
about where the organization is with respect to what was planned or
budgeted for, whereas a performance audit might try to determine
whether the figures reported are a reflection of actual performance.
Although controlling is often thought of in terms of financial criteria,
managers must also control production and operations processes,
procedures for delivery of services, compliance with company policies,
and many other activities within the organization.
The management functions of planning, organizing, leading, and
controlling are widely considered to be the best means of describing the
manager’s job, as well as the best way to classify accumulated knowledge
about the study of management. Although there have been tremendous
changes in the environment faced by managers and the tools used by
managers to perform their roles, managers still perform these essential
functions.

Key Takeaway

The principles of management can be distilled down to four critical

functions. These functions are planning, organizing, leading, and
controlling. This P-O-L-C framework provides useful guidance into what
the ideal job of a manager should look like.

Exercises

1. What are the management functions that comprise the P-O-L-C

framework?
2. Are there any criticisms of this framework?
3. What function does planning serve?
4. What function does organizing serve?
5. What function does leading serve?
6. What function does controlling serve?

Referenes
Huimfg.com, http://www.huimfg.com/abouthui-
yourteams.aspx (accessed October 15, 2008).
Lamond, D, “A Matter of Style: Reconciling Henri and
Henry,” Management Decision 42, no. 2 (2004): 330–56.
Mintzberg, H. The Nature of Managerial Work (New York: Harper &
Row, 1973); D. Lamond, “A Matter of Style: Reconciling Henri and
Henry,” Management Decision 42, no. 2 (2004): 330–56.
This is a derivative of PRINCIPLES OF MANAGEMENT by a publisher who has
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