Improving Shared Understanding of Organization Strategy, 5 Domain Visual Models
Organization Domain Modeling and Models
Organization Domain Modeling and Models provide the tools for users to create visual models of the organization to drive visualization and inform decision-making. Managers in companies can improve their shared understanding of abstract organization concepts and ideas such as: strategy, competencies, capabilities, distinctive capabilities, brand, etc., through visualization enabled by organization domain models. These models provide better context and visual concepts to aid people in the organization in arriving at consistent interpretation of environment factors that influence organizational behavior and performance. The category of domain models underlying "organization system" visualization and simulation include:
These organization system viewpoint models support a set of visualization methods that enable users to visualize the structures (form), functions, and behavior of a business organization or enterprise in pursuit of its vision and mission.
Organization Domain Modeling and Models provide the tools for users to create visual models of the organization to drive visualization and inform decision-making. Managers in companies can improve their shared understanding of abstract organization concepts and ideas such as: strategy, competencies, capabilities, distinctive capabilities, brand, etc., through visualization enabled by organization domain models. These models provide better context and visual concepts to aid people in the organization in arriving at consistent interpretation of environment factors that influence organizational behavior and performance. The category of domain models underlying "organization system" visualization and simulation include:
- Organization Structures - Visual Modeling methods for creating organization structure models that define the organization system environment domain concepts and relationships such as: Organization Operating Structure and Units, Reporting and Management Structure, Position and Roles (Responsibilities), Organization Capabilities (what the units produce), Organization Units Relationships - Value Networks, Shared Services, Dependency Relationships, and Influence Relationships.
- Organization Process Modeling - Visual Modeling Methods for describing the Organization's Business/Work and Administrative Process and Workflow Models including Process Information Models that define Process Information Flow Models, Process Control Flow and Decisions Expressions Models, Process Input /Output Data Models, Role/Resource Assignment Policy Models.
- Goals Modeling - Visual Modeling Methods for creating models that describe organization's intentions, direction, plans, and performance standards as well as strategic, tactical, and operational goals. The goals modeling language enables creation of soft and hard goals, as well as functional and non-functional goals to represent a variety of domain ideas.
- Strategy Content Modeling - Social organizations refers to the systems of obligation-relations which exist among and between the groups constituting a given society.
- Managerial Process Modeling - Management processes are modeled as linked chain of decisions and actions to set directions, sell and negotiate assigned responsibilities to achieve management objectives, and monitoring and controlling organizational activities to ensure progress towards the intended destination.
These organization system viewpoint models support a set of visualization methods that enable users to visualize the structures (form), functions, and behavior of a business organization or enterprise in pursuit of its vision and mission.
Organization Structures
The organization structure design focuses on enabling effective management of complexity, coordination and control of organizational behavior through activities, decision rules, positions and roles, and responsibilities. This is critical as the decision rights cascade grows, because the structure and operating principles as well as governance of the organization becomes more complex and critical to manage. An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. Organization system structures may delineate physical or logical organizing forms.
Logically, organizations are complexes of people and/or groups that according to commonly agreed rules and procedures strive to realize one or more preset objectives. An organization logical structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. The organizational structure also determines how information flows between levels within the company.
The Organization System Structure model is comprised of a number of sub models such as defined by the following model views:
The Organization Structure Model provides a company with visual representation of how it is shaped, and how it can best achieve its goals. The structure should directly support the company's strategy. The structure describes what employees do, whom they respond to, and how decisions are made across the business.
Organization Structure Elements/Concepts
The organizational structures model artifacts include the following domain concepts:
[TBD]
Organization Domain Relationships
The relations defines a network structure, it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to its environment through a pattern of relationship types. These include a number of different dependency relations such as "value chain", "shared business function", etc.
The social system network comprising the organization and its environment can be represented through organization relationships including goal-dependency relationships:
Organization Attributes and Properties
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The organization structure design focuses on enabling effective management of complexity, coordination and control of organizational behavior through activities, decision rules, positions and roles, and responsibilities. This is critical as the decision rights cascade grows, because the structure and operating principles as well as governance of the organization becomes more complex and critical to manage. An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. Organization system structures may delineate physical or logical organizing forms.
Logically, organizations are complexes of people and/or groups that according to commonly agreed rules and procedures strive to realize one or more preset objectives. An organization logical structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. The organizational structure also determines how information flows between levels within the company.
The Organization System Structure model is comprised of a number of sub models such as defined by the following model views:
- Organization function structure model - defines the arrangement of organizational units that group human resources (people) on the basis of the required capability of the unit, to create an environment for best human performance.
- Organization position structure model - The position structure model defines the reporting structure in the organization, and the competences required of individuals (people) that fill a position.
- Organization shared service model - The model defines a network structure; it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to each other through a resource dependency relationship.
- Organization value network model - The model defines a network structure; it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to each other and its environment - suppliers, vendors, etc. - through a pattern of relationship types, including the "value chain" relations.
- Control Structure - Organizational control is part of the structure that defines and guides the strategy usage, set goals for the performance, and state corrective measures to be taken if performance goals are not met. Controls may be composed of responsibility centers (i.e., profit centers, cost centers, revenue centers, and investment centers), which help leaders allocate the resources for each activities.
The Organization Structure Model provides a company with visual representation of how it is shaped, and how it can best achieve its goals. The structure should directly support the company's strategy. The structure describes what employees do, whom they respond to, and how decisions are made across the business.
Organization Structure Elements/Concepts
The organizational structures model artifacts include the following domain concepts:
- Organization Unit - The organization structure model is comprised of component elements - organization units, and the relationships between these units. These Organization Units can represent Functional Units, Departments, Operating Units, etc. The Organization Structure model can be a decomposition model or network model.
- Organization Function - The Organizing function brings together physical, financial, and human resources and the productive relationships among them for achieving the goals established in the planning function. Leaders need to identify what activities are necessary, assign those activities to specific personnel, effectively delegating tasks. Leaders need to coordinate tasks to keep resources moving efficiently toward goals It is important to prioritize which resources are essential at any given time.
- Positions - The concept of position provides the abstraction enabling the definition of an individual as a logical social system in terms of their skills, competencies, experience levels and reporting relationships. Positions are social concepts employed by organizations for abstracting from specific human actors in the organization. Positions define how the organization aims at implementing its design through the specification of the behavior of particular individuals or group of individuals.
- External Environment Entity - The External Organization Entity model concept allows users to create External Organization Entities as model elements for external vendors, suppliers, and consultants. The external environment is denoted by an external environment entity model. The concept of Environment Entity is an abstraction that is used to define forthcoming developments (either inside or outside of the organization) which are likely to have important impact on the ability of the organization to meet its objectives. The Environment Entity is also an abstraction over the concept of strategic issue, and the concept of influencer in Business Motivational Modeling (BMM). The category of Environments Entities (Influencers) is large and inclusive. Every business has hundreds of potential Influencers. There will always be too many Influencers to model. The decision as to what Influencers to model is determined by the Influencers that impact the organization's strategies and tactics, and affect the achievement of goals and objectives of the organization.
[TBD]
Organization Domain Relationships
The relations defines a network structure, it essentially depicts an organization as a network structure of organization units (logical structured actors) connected to its environment through a pattern of relationship types. These include a number of different dependency relations such as "value chain", "shared business function", etc.
- organization Functional Relationship Hierarchy - This is a hierarchical relationship and its constituent functions/units.
- Position (Structure) Hierarchy - The Position Structures are expressed through hierarchical reporting relationship between positions.
- Value Chain Relationship - [TBD]
- Shared Service Relationship - [TBD]
- Control Relationships - [TBD]
The social system network comprising the organization and its environment can be represented through organization relationships including goal-dependency relationships:
Organization Attributes and Properties
- Qualification - A qualification definition denotes a skill or knowledge possessed by a human resource. A human resource’s qualification typically comprises knowledge, education, training, or experience.
- Competency - A competency definition may specify the expected outcomes, skills, capability and proficiency, and knowledge expressed through qualifications required for a job position. The set of competencies for a position defines the capability requirements for a position to achieve a business outcome.
- Organization Capability - []
- Organization Policy - A policy is typically described as a principle or rule to guide decisions and achieve rational outcomes. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol.
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Process Modeling Methods
Business organizations are comprised of organizational processes and management processes. Organizational Processes enable business organizations to take a systemic approach to defining how work gets done in the organization as a whole in creating and delivering value to its customers, and in support of the value creation processes.
Process and Task Models
Both processes and tasks represent business activities that are performed in a business and/or organization. Processes are more complex than tasks, and are defined as sequence of activities that are linked by flows of control, data, and material. In contrast, tasks are atomic activities that cannot be decomposed into smaller actions.
Operational and administrative processes share several characteristics. The primary differences between the two lie in the nature of their outputs.
Business organizations are comprised of organizational processes and management processes. Organizational Processes enable business organizations to take a systemic approach to defining how work gets done in the organization as a whole in creating and delivering value to its customers, and in support of the value creation processes.
Process and Task Models
Both processes and tasks represent business activities that are performed in a business and/or organization. Processes are more complex than tasks, and are defined as sequence of activities that are linked by flows of control, data, and material. In contrast, tasks are atomic activities that cannot be decomposed into smaller actions.
- Work processes - These focus on accomplishments of tasks through linked chains of activities cutting across departments and functional groups. Work processes can be grouped into categories such as: operational and administrative processes/tasks. Examples of work processes include new product development, manufacturing, etc.
- Operational Processes - Processes that create, produce, and deliver value (products and services) that customers want. Typically, operational processes produce goods and services that external customers consume. Examples of operational processes include logistics and distribution process.
- Administrative Processes - Processes that are necessary for running the business and support the value chain processes. Administrative processes generate information and plans that internal groups use. Examples of administrative processes include resource planning, budgeting, and performance measurement.
Operational and administrative processes share several characteristics. The primary differences between the two lie in the nature of their outputs.
Business Processes Models
The process model view considers an organization as a whole (system) or any of its parts to be an activity network or a collection of processes. A process can refer to detailed workflow, such as billing a customer, or implementing an engineering change order, or to aggregate activities of new product development, or customer service.
Adopting a process view means that we visualize instances of work, called flow units (e.g., consulting engagements, hospital patients, barbershop patrons, hotel guests, or products/parts, service orders) flowing through a network of activities and buffers. The primary workflow is typically accomplished by an information flow to enable coordination of roles and the orchestration of activities. A BPMN Business Process Model that provides information about the activities performed, the routes taken, the rules impacting which routes and activities to perform, and the resources (human and machines) used to perform the activities.
BPMN Process Structure Concepts
The BPMN process model is an activity-based model. It provides key abstractions that capture and define the process structure - how activities, gateways, events, and sub-processes are connected by sequence flows. A BPMN Business Process Model is comprised of the following concepts:
Resource Assignment Policy
and the dynamic behavior of the architecture (how activity execution and control flow is coordinated, and work is managed and performed) to functionally define the execution view of business situations.
The process model view considers an organization as a whole (system) or any of its parts to be an activity network or a collection of processes. A process can refer to detailed workflow, such as billing a customer, or implementing an engineering change order, or to aggregate activities of new product development, or customer service.
Adopting a process view means that we visualize instances of work, called flow units (e.g., consulting engagements, hospital patients, barbershop patrons, hotel guests, or products/parts, service orders) flowing through a network of activities and buffers. The primary workflow is typically accomplished by an information flow to enable coordination of roles and the orchestration of activities. A BPMN Business Process Model that provides information about the activities performed, the routes taken, the rules impacting which routes and activities to perform, and the resources (human and machines) used to perform the activities.
BPMN Process Structure Concepts
The BPMN process model is an activity-based model. It provides key abstractions that capture and define the process structure - how activities, gateways, events, and sub-processes are connected by sequence flows. A BPMN Business Process Model is comprised of the following concepts:
- Activity - The activity definition includes the definition of roles representing the function/capability required by a resource to be able to perform the work.
- Roles - A role is an abstraction that specifies a proficiency expressed through a pattern of activities (tasks) that may be performed by an individual or group of individuals.
- Decision Points/Gates - These are flow control elements, and provide the mechanism to automate workflow decisions.
- Work Unit - This is the work item that flows through activities/tasks.
- Process Data - This is the information component of the work unit.
- Sequence Links - These are connections between activities, and activities and gates; they define the route taken by work items/units.
- Events - []
- Triggers - []
Resource Assignment Policy
and the dynamic behavior of the architecture (how activity execution and control flow is coordinated, and work is managed and performed) to functionally define the execution view of business situations.
Process Data and UML Data Modeling Editor
The UML based data modeling tool enables the creation of logical data model diagrams that define the concepts and ideas in organizational system domain such as products identify nd properties, services identity and properties, identity and properties of organizational physical assets such as equipment, machines, etc., and their capabilities. process variables (used in expressions such as flow control, conditions and branching decisions, etc.), process data flow, and process input and output data.
Expression Builder & Editor
DMM Studio supports a number of different expression builders such as for process control flow and branching decisions expressions, policy expressions builder for defining resource selection policy models, and activity assignment policy expressions for assignment policy model.
The UML based data modeling tool enables the creation of logical data model diagrams that define the concepts and ideas in organizational system domain such as products identify nd properties, services identity and properties, identity and properties of organizational physical assets such as equipment, machines, etc., and their capabilities. process variables (used in expressions such as flow control, conditions and branching decisions, etc.), process data flow, and process input and output data.
Expression Builder & Editor
DMM Studio supports a number of different expression builders such as for process control flow and branching decisions expressions, policy expressions builder for defining resource selection policy models, and activity assignment policy expressions for assignment policy model.
Organizational Goals Modeling
Organizational goals are long-term goals that an organization's leadership team establishes to outline expected future outcomes toward which present efforts are directed. These goals not only drive the organization as a whole, but also guide employees' efforts towards achieving the company's vision. Organization goals may be classified into the following categories: "official" goals, and Operative goals. Official goals are what the organization would like to achieve, while Operative goals are what the organization needs to achieve to become successful.
Official Goals
Official goals define the company's aims and purpose; they are the formally stated goals of an organization and are described in its public statements such as: corporate charter, mission statements, and annual reports, and and communicate the general purpose of the organization. The purpose of official goals is to help build the organization's image and reputation; such goals are usually qualitative.
Operative Goals
Operative goals are statements of the desired outcomes of the actual concrete steps/actions a business intends to take to achieve its vision and purpose. They are the outcomes the organization actually seeks to attain through its operating activities. Operative goals are quantitative and are measurable; they may be defined and detailed in the strategic plan as strategic goals. Operative goals can be categorized as:
An organization goal is a statement of desired future an organization wishes to achieve. Organizational goals describe what the organization is trying to accomplish strategically, tactically and operationally. Goals that are strategic make broad statements of where the organization wishes to be at some future point; tactical goals define specific medium-term results for functional units within the organization, and operational goals define short-term results from day-to-day operations processes.
[TBD]
Mission Goals - The mission statement is a general statement on how you will achieve your vision. The mission goals are statements of what needs to be accomplished to implement the mission and values. Some examples may include: enhance staff expertise, increase brand awareness, improve customer service.
Corporate goals - These are statements of what needs to be accomplished to implement the corporate strategy. Corporate goals set expectations for employees, investors, and customers. Corporate goals typically include customer loyalty, profit, growth, leadership and commitment to employees, customers and the community.
Business Goals - These are statements of what needs to be accomplished to implement the business strategy. Business goals.
Strategic Goals - A strategic goal is the objective you want to achieve at the end of your three to five year strategic plan. These goals are broader then your yearly objectives, but shorter than long-term goals like mission and vision statements. The difference between strategic goals and strategic objectives is subjective.
Tactical Goals - Tactical goals are targets that are established quickly in response to real world conditions as they occur. Where strategy is based on predictions about the future, tactics are based on current realities.
Operational Goals - Operational goals are time bound business objectives or key performance indicators (KPI) companies use to stay on track, and function on a day-to-day basis. Business owners and managers flesh out strategic and business goals with these short-term goals so people know what they must achieve in a more immediate time frame.
Goals help improve your overall effectiveness as a company.
Organizational Objectives
Objectives are statements of future conditions, that a manager hopes to achieve. Effective planning requires measurement of objectives. Organizational objectives may include the following:
All sets of objectives have three characteristics: priority, timing, and measurement. The phrase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned.
A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.
Organizational Goals Modeling
The concept of organizational goal types derives from how organizational goals have been employed as criteria for assessing effectiveness of decisions and actions. Conceptualized this way, organizational goals are in essence benchmarks used to evaluate the effectiveness of organizational behavior and attained outcomes.
Modeling Organization Purpose
The notion of “purpose” in social systems is expressed as a goal to be achieved by the people in positions within the organization. Members that hold those positions in the organization have to subscribe to the expressed purpose (denoted as a goal model) which gives coherence to their motivations, decisions, actions, and behavior. Obviously, the beliefs, motivations, etc. of the members of the organization that hold positions can also be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed through “soft-goal” models (e.g., declaration of some condition that can influence the achievement of purposes/goals).
Organization Goal Refinement/Alignment
Usually, high-level goals of an organization are of strategic (long-term) nature. Such goals are often made operational by refining them (through AND-OR Hierarchical decomposition) into lower-level (tactical) goals (top-down approach). The refinement of goals may proceed until sub-goals (prerequisites) are found, which could be realized by lower-level tasks in the organization’s process hierarchy that can be assigned to a role and/or position. These positions/roles are filled by employees with appropriate capabilities (skills and competency) assigned to a position/role capable to achieve the goals. In practice, the top-down approach is combined with the bottom-up approach, performed by aggregation of lower-level goals.
[TBD]
Functional Goals - Functional goals are statements of the desired outcomes of actions/activities of functional areas in the organization. Functional goals are elaborations of the Organizational Operative Goals, and they outline a capability to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
Organizational goals are long-term goals that an organization's leadership team establishes to outline expected future outcomes toward which present efforts are directed. These goals not only drive the organization as a whole, but also guide employees' efforts towards achieving the company's vision. Organization goals may be classified into the following categories: "official" goals, and Operative goals. Official goals are what the organization would like to achieve, while Operative goals are what the organization needs to achieve to become successful.
Official Goals
Official goals define the company's aims and purpose; they are the formally stated goals of an organization and are described in its public statements such as: corporate charter, mission statements, and annual reports, and and communicate the general purpose of the organization. The purpose of official goals is to help build the organization's image and reputation; such goals are usually qualitative.
Operative Goals
Operative goals are statements of the desired outcomes of the actual concrete steps/actions a business intends to take to achieve its vision and purpose. They are the outcomes the organization actually seeks to attain through its operating activities. Operative goals are quantitative and are measurable; they may be defined and detailed in the strategic plan as strategic goals. Operative goals can be categorized as:
- Strategic Goals - These are broad long-term goals set by the leadership team/executive management. Some common types of operative goals include overall performance (e.g., profitability, growth, amount of services delivered); resource (e.g., obtain financing, research grants, hire minorities); market (e.g., increase market share by x%); employee development; innovation (e.g., develop new products).
- Tactical Goals - These are elaborations of the Organizational Operative Goals, and they outline a capability to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
- Operational Goals - Operational goals are specific to the daily tasks and requirements to run a business. Operational goals define the outcomes of positions (job roles) in the organization needed to achieve Operative goals. A job role operational goal is to build processes that are easily replicated. Replicating makes it possible to hire and scale a business quickly. For example, a window washing company can set the operational goal to create a daily process for each employee that makes them efficient. Efficient operations make it easy for employees to function and to excel within their work environment. Operations ensure that products and service make it to market through predefined daily tasks.
An organization goal is a statement of desired future an organization wishes to achieve. Organizational goals describe what the organization is trying to accomplish strategically, tactically and operationally. Goals that are strategic make broad statements of where the organization wishes to be at some future point; tactical goals define specific medium-term results for functional units within the organization, and operational goals define short-term results from day-to-day operations processes.
[TBD]
Mission Goals - The mission statement is a general statement on how you will achieve your vision. The mission goals are statements of what needs to be accomplished to implement the mission and values. Some examples may include: enhance staff expertise, increase brand awareness, improve customer service.
Corporate goals - These are statements of what needs to be accomplished to implement the corporate strategy. Corporate goals set expectations for employees, investors, and customers. Corporate goals typically include customer loyalty, profit, growth, leadership and commitment to employees, customers and the community.
Business Goals - These are statements of what needs to be accomplished to implement the business strategy. Business goals.
Strategic Goals - A strategic goal is the objective you want to achieve at the end of your three to five year strategic plan. These goals are broader then your yearly objectives, but shorter than long-term goals like mission and vision statements. The difference between strategic goals and strategic objectives is subjective.
Tactical Goals - Tactical goals are targets that are established quickly in response to real world conditions as they occur. Where strategy is based on predictions about the future, tactics are based on current realities.
Operational Goals - Operational goals are time bound business objectives or key performance indicators (KPI) companies use to stay on track, and function on a day-to-day basis. Business owners and managers flesh out strategic and business goals with these short-term goals so people know what they must achieve in a more immediate time frame.
Goals help improve your overall effectiveness as a company.
Organizational Objectives
Objectives are statements of future conditions, that a manager hopes to achieve. Effective planning requires measurement of objectives. Organizational objectives may include the following:
- Mission Objectives - These are specific actions and timelines for achieving the mission goals.
- Corporate objectives - These are specific actions and timelines for achieving the corporate goals. Examples include: maximizing shareholder wealth, increasing market share, expanding current product lines, improving employee retention, etc.
- Business objectives - Business objectives are the specific, measurable results that companies hole to maintain as their business grows. Examples include: profit earnings, market share (or creation of customers), innovation & Utilization of resources, and increasing productivity.
- Strategic Objectives - Strategic objectives (strategic priorities, pillars, or planks) are purpose statements that create overall vision and set goals and measurable steps/actions for an organization to help achieve a desired outcome. A strategic objective is most effective when it is quantifiable either by statistical results or observable data. Strategic objectives may be of the following types: process objectives, behavior or outcomes based. Ideally, strategic objectives should be broad, 3 to 5 year, statements that address the core functional areas of your organization. A balanced Scorecard perspective may be used to guide decisions and make ensure your plan is focused on the core aspects of your business.
All sets of objectives have three characteristics: priority, timing, and measurement. The phrase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned.
A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.
Organizational Goals Modeling
The concept of organizational goal types derives from how organizational goals have been employed as criteria for assessing effectiveness of decisions and actions. Conceptualized this way, organizational goals are in essence benchmarks used to evaluate the effectiveness of organizational behavior and attained outcomes.
Modeling Organization Purpose
The notion of “purpose” in social systems is expressed as a goal to be achieved by the people in positions within the organization. Members that hold those positions in the organization have to subscribe to the expressed purpose (denoted as a goal model) which gives coherence to their motivations, decisions, actions, and behavior. Obviously, the beliefs, motivations, etc. of the members of the organization that hold positions can also be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed through “soft-goal” models (e.g., declaration of some condition that can influence the achievement of purposes/goals).
Organization Goal Refinement/Alignment
Usually, high-level goals of an organization are of strategic (long-term) nature. Such goals are often made operational by refining them (through AND-OR Hierarchical decomposition) into lower-level (tactical) goals (top-down approach). The refinement of goals may proceed until sub-goals (prerequisites) are found, which could be realized by lower-level tasks in the organization’s process hierarchy that can be assigned to a role and/or position. These positions/roles are filled by employees with appropriate capabilities (skills and competency) assigned to a position/role capable to achieve the goals. In practice, the top-down approach is combined with the bottom-up approach, performed by aggregation of lower-level goals.
[TBD]
Functional Goals - Functional goals are statements of the desired outcomes of actions/activities of functional areas in the organization. Functional goals are elaborations of the Organizational Operative Goals, and they outline a capability to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
Business Organization Strategy Model
Strategy in business organizations is a layered concept that exists at various levels in the organization, namely: corporate, business and operations strategy, with functional strategy providing organizational methods and resources to implement the strategy. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer. Strategic goals define outcomes the organization wants to achieve to better meet the organization's mission. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategic goal.
The point of strategy is a new vision.
Strategy is the pattern of choices on how the organization is going to position itself to gain sustainable competitive advantage over ts rivals to achieve its goals and objectives. The Strategy conceptual model provides the means to capture the relevant aspects of the world on which it is necessary to provide information. Strategy content model makes up the strategy knowledge body of an organization. It describes how the organization means to act and at best even motivates why. In most cases, it is developed collaboratively by a team of experts with different background, particularly to allow for greater variety of perspectives on the domain under observation or to establish coordination between distinct units of the organization.
[TBD]
Business Goals
Goals are statements of what needs to be done to implement the strategy. Objectives are specific milestones for meeting a specified goal. A strategy has to be sound, implemented and executed to have value. Goals and objectives provide the milestones for measuring the success of the strategy in achieving the mission and vision.
[TBD]
Strategy content must be organized in a way to address the following concerns:
The strategy content knowledge model captures the outputs of the strategy development (formulation and implementation) processes. It is comprised of the following concepts and properties.
Models relate the functional and non-functional aspects of the organizational changes and capacity development to the organization's purpose and intentions of the various stakeholders. The strategy ontology describes the basis for deriving the concepts and properties (uppercase) to structure and constitute the strategy content in a Strategy Knowledge Model.
[TBD]
Creating integrated goal models of corporate, business and operations strategy layered model, collectively define the logical model of the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame.. A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy. The intended and desired outcomes are represented as goals. A goal is a broad/general statement about intended state of the world we want to bring about.
[TBD]
Organizing (Implementation) Model
A plan specifies a set of goals and objectives that need to be achieved to successfully satisfy the intended goals of the plan. The goals of the plan are assigned to functional areas (that define key organizational capabilities) or departments and then cascaded to the resources in key capability areas for implementation and execution. The cascade within a particular capability area terminates when the organization unit that abstracts that area reaches individual or team of individual resources that fill the relevant positions in the organization unit. The cascading process is based on goal refinement techniques. The goal refinement network model that represents the cascaded goals can be elaborated by associating with each cascaded goal element assigned to a position filled by resources responsible for employing the means to be employed in accomplishing actions/tasks/activities to achieve the specified goals and objectives. Goal refinement and elaboration decisions are critical and decisive in the planning process as alternative actor assignments define alternative system proposals. A prioritized implementation time schedule and budgets can be generated from the planning model.
Policy Statements
The key to organization success is its ability to identify the important needs of each of the following groups (customers, employees, shareholders, etc.) to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
Strategy in business organizations is a layered concept that exists at various levels in the organization, namely: corporate, business and operations strategy, with functional strategy providing organizational methods and resources to implement the strategy. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer. Strategic goals define outcomes the organization wants to achieve to better meet the organization's mission. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategic goal.
The point of strategy is a new vision.
Strategy is the pattern of choices on how the organization is going to position itself to gain sustainable competitive advantage over ts rivals to achieve its goals and objectives. The Strategy conceptual model provides the means to capture the relevant aspects of the world on which it is necessary to provide information. Strategy content model makes up the strategy knowledge body of an organization. It describes how the organization means to act and at best even motivates why. In most cases, it is developed collaboratively by a team of experts with different background, particularly to allow for greater variety of perspectives on the domain under observation or to establish coordination between distinct units of the organization.
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Business Goals
Goals are statements of what needs to be done to implement the strategy. Objectives are specific milestones for meeting a specified goal. A strategy has to be sound, implemented and executed to have value. Goals and objectives provide the milestones for measuring the success of the strategy in achieving the mission and vision.
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Strategy content must be organized in a way to address the following concerns:
- flexibility to support a multitude of organization methods with different underlying concepts,
- the need to structure and integrate the generated strategy content to be able to relate the knowledge, provide means for common understanding, foster reuse, communication and collaboration, and provide means for automation.
The strategy content knowledge model captures the outputs of the strategy development (formulation and implementation) processes. It is comprised of the following concepts and properties.
- Influencer - The Influencer concept is used to describe issues of strategic relevance. It has at least one Information Source property for further explanations, which is also used to motivate its incorporation in and relevance for the strategy planning. An influencer concept is borrowed from OMG Business Motivation Model (BMM) to describe issues that have "the capability to produce an effect without apparent exertion of tangible force or direct exercise of command". The category of external factors (influencer) is large and inclusive. Every business has hundreds of potential influencer. There will always be too many influencer to model. The decision as to what influencer to model is determined by the influencer's impact the organization's mission or mandate and if its of strategic relevance.
- Strength, Weaknesses, Opportunities, and Threats (SWOT) - These concepts depict judgments resulting from an Influencer's SWOT analysis.
- Goal - Describes a future state that the unit aims to achieve. It has an optional Objective property which could be used to quantify the Goal. Goals can be decomposed into sub-goals based on AND-OR Refinement. The goals model of the organization's strategy is a layered model of a hierarchy of goals at each layer/level with strategic goals at the top; tactical goals, created and cascaded beginning from the strategic goals to functional areas/departments, it the next layer; and operational goals in the bottom layer. The model allows the organization to capture the goals resulting from the goal setting process such as the company level goals, and the set of goals created and cascaded beginning from the company goals to departments and organization units that support the organization top level goals. The operational goals capture process and individual employee goals created to support department and unit level goals.
- Strategy - Describes a course of action to channel Goal achievement. A strategy may support at least one and at most three (3) Goals. This constraint was introduced to help enforce the focus on less but more specific strategies. The strategy implementation details can be further specified using its Implementation Details property. Strategies - decisive actions - are developed for each corporate/business strategy goal in terms of "action goals" which abstracts over the specific means employed. Ideally, each strategy represents a single, distinct approach to achieving all or part of the corporate/business strategy goal. Like goals, strategies are directional. For example, a strategy for the "Raise Revenue" goal might be to "Bring in more customers." While goals and strategies are directional, objectives are specific, measurable actions that establish how the goals will be achieved. Outcomes create meanings, relationships, and differences: the Why. The attainment of each goal may require a number of objectives to be reached. A corporate or business strategy is defined in terms of the goal statements that represent the desired/expected outcomes.
- Resource - Represents a resource (or capability) that the unit may deploy. Actors represent the perspectives and objectives of the individuals (human resources) responsible and accountable for establishing the vision and direction of the organization, formulating and implementing the organization's design and strategy, and executing the implemented strategy, resulting in creating and delivering value to customers to increase customer satisfaction and stakeholders' value.
- Strategic Goal Dependency Relationship - The relationship is defined by the link between a goal model and actors, and express the expectations of each of the actors (parties) to the relationship. The actors in a social system are connected by strategic goal dependency relationships to form a social network. The goal models are linked to the actors and they express the expectations of each of these actors with respect to strategic performance.
Models relate the functional and non-functional aspects of the organizational changes and capacity development to the organization's purpose and intentions of the various stakeholders. The strategy ontology describes the basis for deriving the concepts and properties (uppercase) to structure and constitute the strategy content in a Strategy Knowledge Model.
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Creating integrated goal models of corporate, business and operations strategy layered model, collectively define the logical model of the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame.. A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy. The intended and desired outcomes are represented as goals. A goal is a broad/general statement about intended state of the world we want to bring about.
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Organizing (Implementation) Model
A plan specifies a set of goals and objectives that need to be achieved to successfully satisfy the intended goals of the plan. The goals of the plan are assigned to functional areas (that define key organizational capabilities) or departments and then cascaded to the resources in key capability areas for implementation and execution. The cascade within a particular capability area terminates when the organization unit that abstracts that area reaches individual or team of individual resources that fill the relevant positions in the organization unit. The cascading process is based on goal refinement techniques. The goal refinement network model that represents the cascaded goals can be elaborated by associating with each cascaded goal element assigned to a position filled by resources responsible for employing the means to be employed in accomplishing actions/tasks/activities to achieve the specified goals and objectives. Goal refinement and elaboration decisions are critical and decisive in the planning process as alternative actor assignments define alternative system proposals. A prioritized implementation time schedule and budgets can be generated from the planning model.
Policy Statements
The key to organization success is its ability to identify the important needs of each of the following groups (customers, employees, shareholders, etc.) to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
Managerial Process Functions
The Managerial process is a continuous decision-making process that takes place within the context of management functions of planning, organizing, leading and controlling activities. Managers must, first, develop a plan plan, then organize resources according to the plan, lead/direct the resources (i.e., employees) to work towards achieving the plan goals, and finally, control everything by monitoring and measuring the effectiveness of the plan. These four managerial functions are highly inseparable and work as an interrelated set of functions; each function bleeds into the others and each affects the performance of the others.
Planning Function
Planning is the function of management that involves setting direction, and setting objectives then 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 through situation analysis. It also requires that managers be good decision makers. Planning is a process consisting of several steps. It begins with environmental scanning (awareness 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.
Planning is looking ahead into the future and predicting possible trends or occurrences which are likely to influence the working situation. It is the most vital quality and job of a manager; and it helps maintain managerial effectiveness by guiding future activities.
Organizing Function
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. This is the process by which the established plans are moved closer to realization (implementation and execution). Organizing is the part of managing which involves establishing an intentional formalized structure of functions/capabilities, positions and roles/responsibilities for people to fill in the organization. Organizing involves determining how activities and resources are to be assembled and coordinated and involves:
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. Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources.
Leading Function
Leading is one of the functions of management involving the directing of activities and actuating the organizational methods/actions through negotiations and selling to motivate staff. 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. Leading is the responsibility of managers to let staff know what work needs to be done, and also by when to ensure efficient achievement of organizational purposes.
Leading sets the enterprise in motion through the actions of people to execute the work prepared during planning, organizing and staffing. Leading is that inter-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating subordinates for the achievement of organizational goals. To become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions. The Leading function requires leaders to do more than simply give orders, they must supervise subordinates while simultaneously motivating teams through guided leadership communicated in clear ways to contribute in meaningful ways.
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?”
Controlling Function
Controlling function refers to all the systems, processes and procedures that leaders create to monitor and evaluate the success of a plan. Controlling involves monitoring of activities, measurement of accomplishments and evaluation against some standards established in the organization; and action to correct deviations if any, to ensure achievement of organizational goals established in the plan.
Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include
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.
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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.
Controlling involves monitoring of activities, measurement of accomplishments and evaluation against some standards established in the organization; and action to correct deviations if any, to ensure achievement of organizational goals established in the plan.
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.
Modeling The Management Process
The management process as a decision-making process can be modeled as goals models. Goals and objectives are critical and effective component of the management process that enable effective orchestration of the four management functions - planning, organizing, leading and controlling activities. Broadly, within the P-O-L-C framework, goals and objectives serve to (1) gauge and report performance, (2) Improve performance, (3) align effort, and (4) manage accountability.
Goals and objectives provide the foundation for modeling at the top management level, business goals and functional area goals and performance measurement goals. The role of goals and objectives does not stop in the planning stage; if goals and objectives are to be achieved and actually improve the competitive position of the firm then the organizing, leading and controlling stages must address goals and objectives as well.
Goals are typically outcome statements, while objectives are very precise, time-based, and measurable actions that support the completion of goals.
Corporate level goals are indications of what the organization as a whole is trying to achieve (mission) and to become (vision). In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc.
Role of Goals in Planning
Goal models of planning capture the management's intentions, expectations, and assumptions underlying key management decisions and choices, and judgments. The planning goals model is an intentional goals model that define a hierarchy of goals denoting the organization's vision, mission, values, and strategies. Goals and objectives are an essential element in planning and are key referent points in many aspects of organizing, leading, and controlling. For goals and objectives to be achieved and actually improve the competitive position of the organization, the organizing, leading, and controlling stages must address goals as well.
The key element of setting goals is the ability to see them in terms of more than a single dimension. Both money and product policy are part of a statement of objectives; but it is essential that these be viewed as concrete expressions of a more abstract set of goals - the satisfaction of the needs of significant groups which cooperate to ensure the company's continued existence.
Role of Goals in Organizing
Once planning goals are set, organizing the resources (human resources and other resources) that are identified in the plan, is necessary to reach the planned goals.. The organization structure is established and the goals and objectives defined in the plan are cascaded over the structure. For instance, a functional organization structure, with functional areas such as marketing, finance, human resource, etc., have goals and objectives, that if measured and tracked, help show if and how those functions are contributing to the organization's goals and objectives. Similarly, product and service areas will likely have goals and objectives. Goals and objectives can also be set for the way functions interact with product or service areas. For instance, are the finance, marketing, and human resource functions interacting in a way that is productive? Similarly, is marketing function delivering value to product or service initiatives.
Organizing Goals Model - The organizing goal model is expressed as a goal hierarchy rooted in the vision and mission of the organization with cascaded goals that define elaborations of high level abstract vision, mission, and business goals down to more concrete goals at the functional/tactical and operations levels. The hierarchical relations between the goals hierarchy/tree are based on AND-OR (exclusive, and SOME) goal-dependency relations.
Role of Goals in Leading
In terms of leadership, it is usually top managers that set goals and objectives for the entire organization. Lower-level managers such as function and line managers have input into the goals and objectives relevant to their respective areas of the organization. For example, a CEO might believe that the organization can achieve a sales growth goal of 20% per year. With this organizational goal, the marketing manager can then set specific product sales goals, as well as pricing, volume, and other objectives through out the year that show how marketing is on track to deliver its part of the organization's sales growth. Goal setting is a primary task of leadership, along with holding others accountable for their respective goals and objectives.
Role of Goals in Control
Goals and objectives can provide a form of control since they create a feedback opportunity regarding how well or how poorly the organization is executing its strategy. Goals and objectives are also a basis for reward systems, and can align interests and accountability within and across business units.
The Managerial process is a continuous decision-making process that takes place within the context of management functions of planning, organizing, leading and controlling activities. Managers must, first, develop a plan plan, then organize resources according to the plan, lead/direct the resources (i.e., employees) to work towards achieving the plan goals, and finally, control everything by monitoring and measuring the effectiveness of the plan. These four managerial functions are highly inseparable and work as an interrelated set of functions; each function bleeds into the others and each affects the performance of the others.
Planning Function
Planning is the function of management that involves setting direction, and setting objectives then 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 through situation analysis. It also requires that managers be good decision makers. Planning is a process consisting of several steps. It begins with environmental scanning (awareness 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.
- Setting Direction - Direction setting through the development of goals and objectives, in essence, map out where the organization is headed, its short-range and long-range performance targets, and the competitive moves and internal action approaches to be used in achieving the targeted results.
- Setting Objectives - Planners must establish objectives, which are statements of what needs to be achieved and when. Goals are typically set for the organization as a whole to set the stage for a hierarchy of goals that align with the various areas in the organization structure such as functional areas, and products and services areas. Functional areas like marketing HR, accounting, etc., will need to have goals and objectives that contribute to the organization goals and objectives (derived from the vision and mission goals and objectives). Similarly, product and service areas will have goals and objectives. Goals and objectives can also be set for the way that functions and product and service areas interact.
- Option Development - Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives,
- Strategic Choice - Planners must make decisions about the best courses of action for achieving objectives.
- Operations Strategy Design - They must then formulate necessary steps and ensure effective implementation of plans.
Planning is looking ahead into the future and predicting possible trends or occurrences which are likely to influence the working situation. It is the most vital quality and job of a manager; and it helps maintain managerial effectiveness by guiding future activities.
Organizing Function
Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. This is the process by which the established plans are moved closer to realization (implementation and execution). Organizing is the part of managing which involves establishing an intentional formalized structure of functions/capabilities, positions and roles/responsibilities for people to fill in the organization. Organizing involves determining how activities and resources are to be assembled and coordinated and involves:
- Organization Structure - Organizing produces a structure of relationships in an organization and it is through these structured relationships that plans are pursued and resources coordinated. Organization structure is a component of organization design and its purpose is to create an environment for the best human performance. The structure defines the tasks to be done. The rules so established must also be designed in light of the abilities and motivations of the people available. The structure of the organization is the framework within which effort is coordinated.
- Decision Rights - Decision rights are a component of organization design. They identify what business decisions need to be made to both drive business operations and to drive alignment to strategy; who is involved in making them; what jobs and tasks, who will work for whom, and how they will be made through operating processes.
- Staffing - The process of finding the right employee with the appropriate qualifications and experience and recruiting them to fill a position, role, or job. The staffing model refers to data that measures work activities, how many labor hours are needed, and how employee time is spent.
- Job Design -Decisions made about the nature of jobs within the organization are generally called “job design” decisions.
- Organization Functions - The Organizing function brings together physical, financial, and human resources and the productive relationships among them for achieving the goals established in the planning function. Leaders need to identify what activities are necessary, assign those activities to specific personnel, effectively delegating tasks. Leaders need to coordinate tasks to keep resources moving efficiently toward goals It is important to prioritize which resources are essential at any given time.
- Organization Units (Functions / Working Parts) Goals - Organizations typically will have Functional Areas such as marketing, sales, human resources, etc., and products and services areas. Goals and objectives are set for the functional areas and products and services areas; measuring and tracking these goals and objectives help show if and how these functions are contributing to the organization goals and objectives. Goals and objectives are also set for the way the functions and products and services areas interact.
- Position Goals - These are performance goals
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. Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources.
Leading Function
Leading is one of the functions of management involving the directing of activities and actuating the organizational methods/actions through negotiations and selling to motivate staff. 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. Leading is the responsibility of managers to let staff know what work needs to be done, and also by when to ensure efficient achievement of organizational purposes.
Leading sets the enterprise in motion through the actions of people to execute the work prepared during planning, organizing and staffing. Leading is that inter-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating subordinates for the achievement of organizational goals. To become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions. The Leading function requires leaders to do more than simply give orders, they must supervise subordinates while simultaneously motivating teams through guided leadership communicated in clear ways to contribute in meaningful ways.
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?”
Controlling Function
Controlling function refers to all the systems, processes and procedures that leaders create to monitor and evaluate the success of a plan. Controlling involves monitoring of activities, measurement of accomplishments and evaluation against some standards established in the organization; and action to correct deviations if any, to ensure achievement of organizational goals established in the plan.
Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include
- establishing performance standards,
- comparing actual performance against standards, and
- taking corrective action when necessary.
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.
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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.
Controlling involves monitoring of activities, measurement of accomplishments and evaluation against some standards established in the organization; and action to correct deviations if any, to ensure achievement of organizational goals established in the plan.
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.
Modeling The Management Process
The management process as a decision-making process can be modeled as goals models. Goals and objectives are critical and effective component of the management process that enable effective orchestration of the four management functions - planning, organizing, leading and controlling activities. Broadly, within the P-O-L-C framework, goals and objectives serve to (1) gauge and report performance, (2) Improve performance, (3) align effort, and (4) manage accountability.
Goals and objectives provide the foundation for modeling at the top management level, business goals and functional area goals and performance measurement goals. The role of goals and objectives does not stop in the planning stage; if goals and objectives are to be achieved and actually improve the competitive position of the firm then the organizing, leading and controlling stages must address goals and objectives as well.
Goals are typically outcome statements, while objectives are very precise, time-based, and measurable actions that support the completion of goals.
Corporate level goals are indications of what the organization as a whole is trying to achieve (mission) and to become (vision). In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.). In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include customers, managers, employees, stockholders, etc.
Role of Goals in Planning
Goal models of planning capture the management's intentions, expectations, and assumptions underlying key management decisions and choices, and judgments. The planning goals model is an intentional goals model that define a hierarchy of goals denoting the organization's vision, mission, values, and strategies. Goals and objectives are an essential element in planning and are key referent points in many aspects of organizing, leading, and controlling. For goals and objectives to be achieved and actually improve the competitive position of the organization, the organizing, leading, and controlling stages must address goals as well.
The key element of setting goals is the ability to see them in terms of more than a single dimension. Both money and product policy are part of a statement of objectives; but it is essential that these be viewed as concrete expressions of a more abstract set of goals - the satisfaction of the needs of significant groups which cooperate to ensure the company's continued existence.
Role of Goals in Organizing
Once planning goals are set, organizing the resources (human resources and other resources) that are identified in the plan, is necessary to reach the planned goals.. The organization structure is established and the goals and objectives defined in the plan are cascaded over the structure. For instance, a functional organization structure, with functional areas such as marketing, finance, human resource, etc., have goals and objectives, that if measured and tracked, help show if and how those functions are contributing to the organization's goals and objectives. Similarly, product and service areas will likely have goals and objectives. Goals and objectives can also be set for the way functions interact with product or service areas. For instance, are the finance, marketing, and human resource functions interacting in a way that is productive? Similarly, is marketing function delivering value to product or service initiatives.
Organizing Goals Model - The organizing goal model is expressed as a goal hierarchy rooted in the vision and mission of the organization with cascaded goals that define elaborations of high level abstract vision, mission, and business goals down to more concrete goals at the functional/tactical and operations levels. The hierarchical relations between the goals hierarchy/tree are based on AND-OR (exclusive, and SOME) goal-dependency relations.
Role of Goals in Leading
In terms of leadership, it is usually top managers that set goals and objectives for the entire organization. Lower-level managers such as function and line managers have input into the goals and objectives relevant to their respective areas of the organization. For example, a CEO might believe that the organization can achieve a sales growth goal of 20% per year. With this organizational goal, the marketing manager can then set specific product sales goals, as well as pricing, volume, and other objectives through out the year that show how marketing is on track to deliver its part of the organization's sales growth. Goal setting is a primary task of leadership, along with holding others accountable for their respective goals and objectives.
Role of Goals in Control
Goals and objectives can provide a form of control since they create a feedback opportunity regarding how well or how poorly the organization is executing its strategy. Goals and objectives are also a basis for reward systems, and can align interests and accountability within and across business units.