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Posted on August 17th, 2012, by

Traditionally, management planning plays an extremely important role since it provides a company with larger opportunities to develop and implement an effective marketing strategy as well as to plan and organize the production process. In this respect, it is hardly possible to find an organization, which could function without effective management. In order to prove the significance of management planning in the contemporary business environment, it is possible to refer to the practical application of this management function in WorldCom.

First of all, it should be said that management planning was an essential component of the management company.

Obviously, the management planning is of the utmost importance in the contemporary business environment because it facilitates consistently the marketing performance of the organization of the work of the company and its relations with its clients and partners, but, what is more important it improves relationships within the company. In this respect, it is important to underline the fact that WorldCom has faced serious difficulties because of the poor management planning to the extent that the company had to pass through the procedure of bankruptcy because it was unable to maintain a stable marketing performance. At this point, it is obvious that poor management planning has played the crucial role in the downfall of the company and, therefore, it is strategically important for WorldCom’s recovery.

To put it more precisely, the poor management planning affected the performance of the company consistently because it proved to be unable to forecast the further development of the industry and market, as well as its forecasts concerning the development of the company turned out to be inaccurate. At the same time, the company developed its planning on the basis of uncertain forecasts, while the planning process itself was inaccurate and ineffective. In this respect, it is worth mentioning the fact that WorldCom overestimated its potential, while the planning process involved mainly the administration of the company, its top executives, while all the rest of the staff was distanced from the planning process.

Obviously, it was one of the major problems of the management planning within WorldCom because the administration of the company set the goals, developed strategies to meet these goals and controlled the implementation of the plan regardless of the position of the personnel of the company and opinion of employees. As a result, there was a significant gap between the plans of the administration and the position of the personnel of the company. In fact, many employees simply failed to understand what the strategic and tactical goals of the company were. In such a situation, they were apparently discouraged to work more effectively and productively because they could not adequately assess and evaluate effects of their work. Hence, their personal motivation was extremely low (Schein, 1999).

In addition, the unwillingness of the administration to involve employees into the process of planning resulted in the inability of top executives to adequately assess the situation within the company because they could not understand the current needs of employees. The latter increased the tension between the administration and employees, especially when the position of the company had started to deteriorate. In such a situation, the administration of the company had revealed another flaw in its management planning. To put it more precisely, when the administration understood that its plan did not work and the company was rapidly losing its market share, top executives of WorldCom proved to be unable to introduce changes into the plan, which could improve the situation consistently and, thus, save the company from the bankruptcy (Peters, 2007).

It is worth mentioning the fact that the effective management planning heavily relies on the flexibility of the planning process. In the contemporary business environment, it is very important to respond fast to changes occurring in the industry or market. The more flexible the management planning is the more opportunities the company has to introduce changes in the plan which can minimize negative effects of unexpected changes within the industry, market or organization itself.

At the same time, it is important to underline that the management planning is also of the ethical position of the company in relation to investors and clients for whom services of the company are very significant. At this point, WorldCom also turned out to be poorly prepared to ethical challenges it had faced. To put it more precisely, the company apparently needed to involve the personnel in the management planning process. Employees should feel involved in the planning and development of basic strategies of the company. In such a way, they would see clearly major goals of the company and their own role in the achievement of these goals.

Thus, in conclusion, it should be said that the role of planning process can hardly be underestimated. The experience of WorldCom reveals the fact that poor management planning can lead to negative effects on the organizational performance.

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