NUMBER 346• 1 SEPTEMBER 2003 • PLANNING
INDEX OF QUOTESReferences
Henri Fayol (1949) is generally considered the father of planning. As early as 1917, he led a nationally owned French mining concern from the brink of bankruptcy to international dominance. This was clearly the result of his development of a specific system. This system involved forecasts from various levels and persons within the organization. Managers from each level submitted their best estimates of the coming years activity and, based on this information, the Chief Executive Officer would make up a one to five year plan. Financial evaluations and control of departments were then based upon these projections.
Based on the business practices and policies of 1917, this was a radical and unsettling approach. Prior to Fayol’s innovation, the charisma and entrepreneurial abilities of the firm’s leadership was believed to be the major factor leading to its success. As more firms became corporations and the size of business entities continued to grow, Fayol’s planning approach became widely accepted. General Motors adopted this approach (luring the 1930s and 1940s and provided an excellent example of this (Sloane, 1963) in the United States.
Since World War II, the evolution of planning approaches can be viewed as three distinct phases (Camillus, 1986). The first of these phases lasted through the 1950s and was, in actuality, an evolution of Fayol’s approach. Its base of operation was in the accounting department of a business. Budgeting and financial projections were used by management to develop future projections and to control operational decisions. From this writer’s experience, this appears to he the primary planning process used in the field of child and youth care today. How many of our present day agencies are operated (in reality) by a business office.
As the continued steady growth of the U S. economy seemed to he a certainty, the financial projecting of the 1950s lead to the development of the long range planning process of the l96Os. This was an advance over the previous approach since it emphasized the future as a major element in the process. Organizations employing this approach identified objectives for expansion and established plans to meet the objectives. We see in the child and youth care field a continued use of this model.
In the 1970s, we realized (as we sat in gas lines) that the future was just not going to he a straight line projection of the past. Planning began to become a very uncertain process as all organizations had to deal with over capacity, resource constraints, and volatile markets. Hyper-rational approaches no longer seemed to he the answer. In particular, human service organizations faced growing social skepticism as well as financial constraints from private and public funding sources.
Leaders needed a tool that could accommodate these new dynamics in the external environments. Beginning in the mid-seventies, we saw the emergence and acceptance of the strategic planning model. Strategic planning was a more flexible tool in that it could take into account some uncertainty, increased market competition, and limited expansion. Most of the agencies and organizations that are considered leaders in our field today utilize this approach. In most cases, one of the main reasons for their current viability is directly related to their planning skills.
As we move into the 1990s there is valid and increasing doubt as to the effectiveness of strategic planning. The Sloane Management Review (Summer, 1984) pulls together many of these concerns into one issue and offer a representative view of the strategic planning model. In a personal interview with William Berry, CEO of Dominion Resources, Inc., one of Virginia’s largest corporations, Mr. Berry made it quite clear that he and many of his peers view strategic planning as a model that is unable to incorporate the new factors that leaders must face in planning for their organizations future.
If the planning process is continually going through changes and fads, how does the modern day administrator choose an appropriate approach? Planning experts have their pet approaches such as: (a) Planning, Programming, and Budgeting System, (b) Management by Objectives, (c) Project Evaluation and Review Technique, (d) Zero - Based Budgeting, (e) Theory X, (I) Theory Y, (g) Strategic Planning, (h) Management Information Systems, and (j) Theory Z.
What should leaders and administrators do? This writer recommends that each agency decide individually. A quality decision can he based on integrating the knowledge of the history and evolution of planning, an understanding of the present situation, and an estimate of what the future may hold.
One point above all others is abundantly clear. YOU MUST PLAN! The implications for administrators who do not plan are serious today and lethal tomorrow.
Mescon, Albert, and Khedouri (l985) cite overwhelming evidence that supports the use of formal planning. They found that organizations involved in any form of planning have faster growth rates. These firms also had the highest return on investment, return on equity and in any field they led their peers in growth and vitality.
Overall, these three authors state that these studies "indicate a strong positive correlation between planning and organizational success " (p.247). Planning seems to be questioned only in terms of matching the proper model to the organization’s needs, generating useable or realistic plans and being aware of cost benefit issues.
Sullivan, Frank.(1989). The total agency planning model. The Child and Youth Care Administrator. Vol.2 No.2 pp 44-46
Camillus, J.C. (1986). Strategic planning and management control. Lexington, Mass: D.C.Heath
Fayol, H. (1949). General and industrial management. London: Pitman
Sloane, A. (1963). My years at general motors. New York: Doubleday
Mescon, M.H.; Albert, M. & Khedouri, F. (1980) Management. New York: Harper & Row.