What Contemporary Planning Issues Do Managers Face?
5-4 Discuss contemporary issues in planning.
The second floor of the 21-story Hyundai Motor headquarters buzzes with data 24 hours a day. That’s where you’d find the company’s Global Command and Control Center (GCCC), which is modeled after the CNN newsroom with numerous “computer screens relaying video and data keeping watch on Hyundai operations around the world.” Managers get information on parts shipments from suppliers to factories. Cameras watch assembly lines and closely monitor the company’s massive Ulsan, Korea, factory looking for competitors’ spies and any hints of labor unrest. The GCCC also keeps tabs on the company’s R&D activities in Europe, Japan, and North America. Hyundai can identify problems in an instant and react quickly. The company is all about aggressiveness and speed and is representative of how a successful twenty-first-century company approaches planning.46
We conclude this chapter by addressing two contemporary issues in planning. Specifically, we’re going to look at 1 planning effectively in dynamic environments and crisis situations and then 2 at how managers can use environmental scanning, especially competitive intelligence.
How Can Managers Plan Effectively in Dynamic Environments and in Crisis Situations?
As we saw in Chapter 2, the external environment is continually changing. How can managers effectively plan when the external environment is continually changing? We already discussed uncertain environments as one of the contingency factors that affect the types of plans managers develop. Because dynamic environments are more the norm than the exception, let’s look at how they can effectively plan in such environments. We also want to take a quick look at how managers can help their organizations prepare for responding to a crisis.
Dynanic Environments
In an uncertain environment, managers should develop plans that are specific, but flexible. Although this may seem contradictory, it’s not. To be useful, plans need some specificity, but the plans should not be set in stone. Managers need to recognize that planning is an ongoing process. The plans serve as a road map although the destination may change due to dynamic market conditions. They should be ready to change directions if environmental conditions warrant. This flexibility is particularly important as plans are implemented. Managers need to stay alert to environmental changes that may impact implementation and respond as needed. Keep in mind, also, that even when the environment is highly uncertain, it’s important to continue formal planning in order to see any effect on organizational performance. It’s the persistence in planning that contributes to significant performance improvement. Why? It seems that, as with most activities, managers “learn to plan” and the quality of their planning improves when they continue to do it.47 Finally, make the organizational hierarchy flatter to effectively plan in dynamic environments. A flatter hierarchy means lower organizational levels can set goals and develop plans because organizations have little time for goals and plans to flow down from the top. Managers should teach their employees how to set goals and to plan and then trust them to do it. And you need look no further than Bangalore, India, to find a company that effectively understands this. Just a decade ago, Wipro Limited was “an anonymous conglomerate selling cooking oil and personal computers, mostly in India.” Today, it’s a $8.5 billion-a-year global company with most of its business coming from information-technology services.48 Accenture, EDS, IBM, and the big U.S. accounting firms know all too well the competitive threat Wipro represents. Not only are Wipro’s employees economical, they’re knowledgeable and skilled. And they play an important role in the company’s planning. Since the information services industry is continually changing, employees are taught to analyze situations and to define the scale and scope of a client’s problems in order to offer the best solutions. These employees are the ones on the front line with the clients and it’s their responsibility to establish what to do and how to do it. It’s an approach that positions Wipro for success no matter how the industry changes.
Crisis Situations
On February 27, 2010, the fifth strongest earthquake ever recorded struck Chile. It was so strong that NASA estimated it tilted the Earth’s axis by three inches.49 (Mind boggling, isn’t it!) The 2017–2018 flu season, which proved to be worse than expected, required many hospitals to make adjustments to facilities, processes, and procedures to handle the massive numbers of sick individuals.50 Hurricane Harvey struck Houston with a fury in late August 2017 and left behind devastating flooding.51 Cyber-attacks on major corporations, government agencies, and other institutions are happening more and more frequently. All of these are examples of crisis situations, which require managers to be prepared above-and-beyond the normal, everyday planning challenges associated with dynamic environments. How? Well, the first thing to remember in planning for a crisis is you can’t wait until a crisis happens! A comprehensive crisis response plan needs to be prepared and in place. Experts suggest that it cover three critical dimensions: people, preparedness, and testing.52 When a crisis hits, an organization’s people need to know what their response is to be. And they know this through being prepared (preparedness) and through rehearsing simulated crises (testing). All of this requires intense and deliberate planning. Worth it? You bet!