Strategic Planning and Other Essentials of Management - Case Study Example

Running Head: Management Assignment Student Name: Course Name and Code: Year of Study: Tutor: Date of Submission: Management Introduction Efficient and effective management not only plays the role of improving a company’s general operations but is also a prerequisite for enhancing productivity. Accordingly, all managers must continually seek to improve these aspects in order to improve the outcome of activities within the firm. This discussion seeks to establish the importance of efficiency and effectiveness within the organisation by focusing on a real organisation. The manager I interviewed is the Director of Strategy for SP Austen, Mr. McCarthy**. SP Austen is a private electricity and gas transmission and distribution company responsible for servicing over a million customers in Australia’s South East. SP AusNet also undertakes select solutions to customers which include management of energy, water and environmental needs. The company which employs approximately 1,500 employees manages a $6.3 billion network of electricity and gas. SP AusNet is a member of the larger multinational company known as Singapore Power. 51 percent of SP AusNet is owned by Singapore Power’s wholly owned subsidiary, Singapore Power International Pte Ltd. The company is registered in the Australian Securities Exchange. SP AusNet is known for its consistent commitment to its customers, who include both corporate and individual customers hence its popularity in the market. SP AusNet is to a large extent a market leader in the Australian energy market. Mr. McCarthy’s work mostly involves facilitating strategic planning; ensuring that organisational goals are met through ensuring that deadlines for compliance are met; guiding decisions and making recommendations; making reports on energy trading to the Electric Commission; networking with energy experts and general coordination of information and duties aimed at making the company successful. All these culminate in effective strategy design aimed at achieving the organisation’s objectives. As a result, his role is of great importance to SP AusNet. He is highly involved in the development of external networks, negotiations on behalf of the company and information transmission both within and outside the organisation. During the course of his work, there is a significant use of technical skills and knowledge as well as the need to work with individuals and groups. Furthermore, he is an energy compliance expert and has led an emissions-trading project involving 100 people. The organisation is in the service sector and is considered to be large (100+ people). The role associated with this manager is thereby demanding hence the need to develop workable skills to enhance efficiency and effectiveness. McCarthy is also given the responsibility of allocating resources through allocating tasks to employees and plays a major role in searching for new opportunities in the company’s environment. The relevance of achieving efficiency and effectiveness Efficiency and effectiveness are highly imperative in the management work of the manager. As a matter of fact, they are often considered the foundations of organisation success and hence given significant importance. Efficiency is defined as the process of doing things right and is basically a minimum condition to enhance survival in a company after the achievement of success (Koontz and Weihrich, 2006). It is concerned with resource usage, such that the management strives to attain low wastage. On the other hand, effectiveness denotes doing the right things. It is concerned with goal attainment, such that the management strives to enhance high attainment (Koontz and Weihrich, 2006; Jalham and Abdelkader, 2006). Overall, managers strive to enhance low wastage (high efficiency) and to promote high goal attainment (high effectiveness).These concepts are interrelated in that a successful business with great effectiveness may collapse due to poor efficiency. Similarly, the most efficient business is not capable of surviving if it lacks effectiveness. Notably, the role of a manager requires a proactive approach and strategy in order to achieve the company’s objectives, hence the reason why effectiveness and efficiency are imperative virtues for McCarthy to enhance in the course of his work. The benefits associated with efficiency and effectiveness can be identified as follows: Time management Optimal resource utilisation Increased productivity Quality products and services Application to McCarthy’s job and SP AusNet in general McCarthy’s job to a large extent influences the organisation’s competitiveness because he is responsible for designing strategy to be used at the firm. This denotes that he must outline proactive strategies aimed at meeting the firm’s goals and objectives while minimizing chances of loss. Accordingly, he must demonstrate sheer effectiveness and efficiency in performing his roles. This is expected to lead to a number of positive outcomes as analysed below. Effectual achievement of the firm’s goals Efficiency and effectiveness promote the achievement of the organisation’s goals through increasing the speed of production and reducing the production expenses. Consequently, profitability, which is a major goal of the firm, will be achieved easily. Shareholder satisfaction and customer satisfaction are also likely to be achieved thus improving the competitive position of the company in the energy sector (Koontz and Weihrich, 2006). The Functions of Management as identified by Fayol identify planning and organizing as important functions which managers are expected to undertake (Lamond, 2003). In the process of defining goals, setting out strategies, developing plans, coordinating activities and structuring work with an objective of accomplishing the firm’s objective, McCarthy and other managers must ensure that efficiency and effectiveness are given considerable priority. This will ensure that the planning and organizing functions are effective in meeting the firm’s objectives. Reduction in the cost of production and consequent increase in profits Mintzberg identifies the decisional role as one of the things that managers do, and this includes the decision making and allocation of resources (Mintzberg, 1994). The decision process by McCarthy should therefore encompass increased efficiency and effectiveness so as to save resources. Notably, efficiency aids the management in enhancing low resource wastage which reduces the expenses required for production. Efficiency and effectiveness ensure that the production process is smooth and therefore avoids unnecessary losses thus reducing production costs. The firm is therefore expected to record growth in profits thus promoting the continuity of the company. As the Director of Strategy, McCarthy is likely to benefit from increased recognition as the inclusion of effectiveness and efficiency impact positively on strategy thus leading to desirable results. Improving the demand for energy Customers tend to associate with reliable companies because they can effectively cater to their needs. McCarthy’s adoption of high efficiency and effectiveness in the firm’s strategies could improve the quality of products and services and also ease the production process thus leading to reliable supply. This would in turn improve the company’s image in terms of reliability hence improve demand for energy, thus placing the company at an advantage over competitors. Fayol notes that a manager performs the role of controlling, which involves monitoring performance and taking necessary actions where the set standards are not met (Lamond, 2003). It would therefore be the duty of the manager to ensure that the right standards are maintained in order to attract customers. Establish effective relationships with stakeholders Company efficiency and effectiveness is expected to improve the overall image of the company due to increased profitability, competitiveness and high quality of goods and services (Jalham and Abdelkader, 2006). Consequently, it would be easier for the company to maintain effective relationships with stakeholders. This is especially important in attracting new customers and investors. According to Mintzberg’s and Katz’s Management Roles, the manager is interpersonal in that he or she interacts significantly with people while performing managerial duties Fryer, Fryer and Ellis, 2004; Mintzberg, 1994). Workable relationships however are only possible where the stakeholders derive significant benefits due to efficiency witnessed in the firm. Customers are likely to choose a company that is profitable due to the high level of efficiency and effectiveness witnessed at the company. Employee satisfaction/motivation Grant (2010) notes that employees prefer to work in a favourable environment. In this case, efficiency and effectiveness ingrained in the workflow process is expected to be motivating since the process is bound to be faster and more productive. Consequently, the employees are expected to be motivated thus improving their effectiveness in the organisation. As noted by Grant, employees are expected to be more productive if they are satisfied with their jobs. Conclusion This discussion undoubtedly establishes that effectiveness and efficiency within the organisation are highly imperative and that managers must continually seek to enhance these attributes within the organisation. As indicated in the discussion, effectiveness and efficiency are interrelated and they are bound to have a significant effect on organisational success. Examples include increase in productivity, profitability, quality of goods and services and employee motivation. McCarthy, SP AusNet Director of Strategy could benefit immensely from enhancing efficiency and effectiveness as identified in this discussion. It is established that the various roles plated by managers are likely to be effectively met when efficiency and effectiveness are enhanced. For example, the ability to create relationships is improved when a company performs well due to efficiency and effectiveness. Other benefits that are expected to emerge include effective achievement of the firm’s goals, reduction in the cost of production, increased quality of production, improved demand for energy and employee satisfaction and motivation. In conclusion, efficiency and effectiveness are core components in enhancing a firm’s continuity and competitiveness. Reference List Fryer, M., Fryer, B. G. & Ellis, R. (2004). The practice of construction management: people and business performance. New York: Wiley-Blackwell. Grant, P. (2010). Job Design and Ability as Determinants of Employee Motivation: Developing the Mathematics of Human Motivation via the Law of Escalating Marginal Sacrifice. Journal of Leadership, Accountability and Ethics. 8 (1), 1-13. Jalham, I. S. & Abdelkader, W. T. (2006) Improvement of organizational efficiency and effectiveness by developing a manufacturing strategy decision support system. Business Process Management Journal, 12 (5), 588 – 607. Koontz, H. & Weihrich, H. (2006). Essentials of Management. New York: Tata McGraw-Hill. Lamond, D. (2003). Henry Mintzberg vs Henri Fayol: of Lighthouses, Cubists and the Emperor's New Clothes. Journal of Applied Management and Entrepreneurship, 8(4), 5-24. Mintzberg, H (1994). Rounding out the manager’s job. Sloan Management Review, 36 (1) 11- 26. Read More