Fundamentals of Management: Planning, Organizing, Leading, and Controlling

This document provides an overview of the fundamentals of management, including planning, organizing, leading, and controlling. It discusses the advantages and disadvantages of virtual and self-managed work groups and provides recommendations for OZAlpha Company. The document also explores the goals and environmental factors that impact management decisions. Recommended for students studying management.

Fundamentals of management
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Abstract
Conducting effective analysis of management functions including planning, organizing,
leading and controlling determines how OZAlpha Company will operate. Planning function
involves outlining of the objectives, goals, targets and analysis of macro environment.
Organizing function covers organizational structure and culture for the company. Leading
function covers the leadership style appropriate for OZAlpha Company and controlling includes
managing all operations and how resources are managed. After weighing both advantages and
disadvantages of virtual and self-managed groups the paper recommended the OZAlpha’s
executive board of director to implement self-managed groups as it will increase productivity,
easily managed and also enhance customer satisfaction at the same time. The company short
terms plan or goals is to recruit clients with an income of $100,000 while long-term plans is to
set up divisional region and recruit suitable staff. The environmental scan was done using
PESTEL framework that classifies the factors influencing the business in terms of political,
economic, social, technological, ecological and legal. The report recommended OZAlpha to
adopt divisional organizational structure as it with be easier to monitor performances of self-
managed teams. The new divisional organization uses mechanistic organizational structure.
Democratic or participative leadership style is appropriate for managing regional division. The
motivation, reward and recognition strategies include bonuses, promotions and salary
increases. The controlling assists the managers to measure performances and turnover rates.
The paper concluded that effective adoption of four management functions helps the
organization to set up effective regional division group.

Table of Contents
Abstract............................................................................................................................................2
Table of Contents.............................................................................................................................3
INTRODUCTION................................................................................................................................3
PART A: DIVISIONAL STRUCTURE.....................................................................................................4
Virtual teams (work groups)........................................................................................................4
1.1 Advantage of virtual teams (work groups).......................................................................5
1.2 Disadvantage of virtual teams (work groups)...................................................................5
1.3 Advantage of virtual teams (work groups).......................................................................6
1.4 Disadvantages of virtual teams (work groups).................................................................8
1.5 Recommendations............................................................................................................8
PART B: PLANNING, ORGANIZING, LEADING AND CONTROLLING..................................................8
PLANNING........................................................................................................................................8
1.1 Regional division goals......................................................................................................8
Short term goals...........................................................................................................................8
Long term goals............................................................................................................................9
1.2 Environmental Scan..........................................................................................................9
1.3 Operations/ divisional management..............................................................................12
ORGANIZING..................................................................................................................................13
1.4 Divisional structure or design.........................................................................................14
LEADING.........................................................................................................................................14
1.5 Leadership style..............................................................................................................14
3.2 Reward, recognition and motivation...................................................................................15
3.3 Communication....................................................................................................................15
4. CONTROLLING............................................................................................................................16
References.....................................................................................................................................17

INTRODUCTION
Effective analysis of all management functions including planning, organizing, leading and
controlling are very important for OZAlpha Company to determine the best divisional structure
to adopt between virtual and self-managed work groups. In planning phase, OZAlpha
management need to outline the objectives, goals and targets of an organization and further
conducts macro environment analysis to determine the external factors that may influence
operations of the company. Zwikael and Ahn (2011 p.25) stated that “effective planning
involves advanced decisions on what to do, how to do and when will it be done” and therefore,
it is only through effective planning that OZAlpha will be able to expand its operations effective.
In organizing, OZAlpha must organize its operation by coming up with organizational structures
and culture that cooperates and directs diverse departments through the optimization of
available resources. In terms of leading, OZAlpha need to strategize on a leadership style that
involves encouraging, inspiring and motivating employees to achieve their personal and
professional goals in an organization. Through effective leadership the company would be in a
position to provide effective operations and performances from all the regional divisions. In
terms of Controlling, the companies need to controls operations and activities taking place in
the organization.
PART A: DIVISIONAL STRUCTURE
This section of the report provides a comparison between virtual and self-managed
groups and recommends the best work group that should be adopted by OZAlpha Company.

Virtual teams (work groups)
According to research conducted by Lizano and Barak (2012 p.1769-1776) more than 60%
of companies around the globe offers telecommuting services with on-demand economy
contributing to rise of contractors and freelancers. This is an indication that majority of
companies around the world are shifting to virtual teams. According to Hoch and Kozlowski
( 2014 p.390) virtual teams (work groups) is defined as a collection of individuals working from
diverse geographical locations and relying on communication technologies like Skype, voice and
video conferencing, FAX and email in order to collaborate
1.1 Advantage of virtual teams (work groups)
 Lower office costs due to elimination of computers equipment’s, lease, electricity and
other capital resources required in self-managed groups or an organization.
 Pooling of talents as there are no restrictions on hiring the available talent pool in a
specific local area.
 Retention of skilled employees as there are majority of people who feels comfortable
working and earning from home
 Lower employee’s costs as an organization is able to access countries with same talent
level but lower living standards.
 Reductions in time as staff do not travel every day to their offices.
 Increased in production as there are no office distractions and travelling. A research
conducted by Ayoko, Konrad and Boyle (2012 p.156) there are 13% increase in
productivity when employees works remotely.

 Access of multiple markets as an organization can hire sales people in multiple location
without significant costs.
 Great team flexibility as an organization can scale up or down team easily as compared
to
1.2 Disadvantage of virtual teams (work groups)
 High cost of technology due to use and maintenance of multiple communication
technologies like video-conferencing, instant messaging and other forms of
technologies.
 Lack of collaboration, trusts and conflicts due to lack of face-to-face interactions, cold
relations and non-verbal cues.
 Poor leadership is often experienced as many managers are incapable of managing
many initiatives and virtual employees while still providing clear visions and goals
 Other challenges include differences work ethics, misunderstanding and poor
communication or coordination, lack of direction and clarity, incompatible
communication preferences, mismatched needs and skills, hidden incompetence,
difficult in task delegation, inability to ask right questions, deficient commitment and
sense of productivity and lack of personal connection and empathy.
 Differences in time zones pose a problem of scheduling of diverse operations as it
becomes difficult to plan for virtual meetings and the actual time between the team
members
 Managing diverse multicultural teams in virtual and self-managed work groups remains
a key problem. With self-managed groups consisting of individuals from diverse

cultures, each with its own work habits, values and customs, the workforce conflict is
significantly experienced
Self-managed work groups
Self-managed work groups are groups of employees who come together, combine different
talents and skills and work towards a common goal without usual managerial supervision
1.3 Advantage of virtual teams (work groups)
 Innovations as team members have freedom to improve and review working practices.
 Increased in production as compared to virtual teams because teams are usually
responsible for their actions and they work towards a common goal. A research
conducted by Littlewood, Malliaras, Mawson, May, S. and Walters, (2014 p.54-60)
shows that self-managed groups are 15-20 percent productive than virtual and fixed
location teams.
 Improved customer satisfaction as a result of effective customer service and improved
sales figures as research from diverse scholars have revealed that there are less
complains and customer returns arising from self-managed groups.
 Engagement and commitment is very high as teams are more involved due to increased
responsibility and autonomy. In terms of flexibility, autonomy and flexibility are usually
applied to time management which leaves employees in charge of their individual roles
and they choose the schedule that fits are flexible for them to achieve organizational
goals.

 Increased compatibility between employees and employers as self-managed teams are
able to release stress from leaders and focus on their roles. In addition, through self-
managed teams learn from each other.
 Other benefits for self-managed teams includes effective decision making, improvement
of efficiency, problem-solving, freedom to travel, flexible working time, extensive
training.
 Self-managed work groups enable job satisfaction because employees are more
independent and directive involved in the daily activities of an organization.
Furthermore, the direct involvement derives a sense of satisfaction as employees are
working as part of the close-knit team, making effective decisions and solving diverse
problems.
 self-managed teams are sensitive to customer needs and have a wide range of skills
because they come from diverse backgrounds
1.4 Disadvantages of virtual teams (work groups)
 Difficult to interact with other part of organization as a result of work practices
differences.
 Redundant communications due to lack of clear structure of communication, making
decisions and obtaining guidance.
 Freeloaders problem because lack of one member to hit deadline or target impacts the
work of other teams.

1.5 Recommendations
Both virtual and self-managed work groups use their company’s mission statement to
create purposes that are beneficial and meaningful to an organization. The purposes include
things like productivity, increasing sales and problem-solving. After weighing both advantage
and disadvantage of virtual and self-managed groups, I can recommend to OZAlpha’s board of
directors to adopt self-managed teams as it will be easier to manage and productive the same
time.
PART B: PLANNING, ORGANIZING, LEADING AND CONTROLLING
PLANNING
Planning is a management function that is concerned with outlining of organizational goals
for future directions and determination of resources and missions that are essential to achieve
targets. In order to meet the objectives, managers develop short and long terms goals.
1.1 Regional division goals
Short term goals
 To recruit clients with an income of $100,000 within a duration of 6 months.
Long term goals
 To set up regional division that will provide both face-to-face interaction and technology
based advice through Skype as a way of increasing sales and production.
 Operate regional division over extended hours (7 days in a week) in order to attract
farmers and other regional workers with varying working time.

 To employ 24 fulltime employees including 1 dedicate system network specialist, six
administrative support staff, 2 team leaders and 16 planners without changing divisional
structure but with ability of upscaling staff as the business grows.
1.2 Environmental Scan
PESTLE is a tool that is used to analyses the external factors that impact how an
organization conducts business. The factors include political, economic, social, technological,
legal and environmental.
Political factors play a significant role in the profitability of the financial service industry in
Australia. The political conditions that affect how financial service industry operates include the
current trends of political instability and increased corruption levels as research conducted by
Gong and Wu ( 2012 p.192) shows that corruption has consumed 3% of Australia GDP every
year. Other political factors include:
 Trade regulations and tariffs
 Risks of military invasion
 Anti-trust laws related to financial service industry
 protection of intellectual property
 Increased in taxations and incentives
 Government favoring some trade partners
 Product labeling
 Industrial safety regulations
 Mandatory benefits of employees
 Work week regulations

 wage legislation (minimum wage and overtime)
 Price regulations
 Legal framework for contract enforcement.
Economic factors, a macro environment like interest rates, saving rates, inflation rate and
foreign exchange rate affects the demand and investment of the financial service industry in
Australia. Other economic conditions that influences how the financial service industry of
Australia does business include:
 stability of the currency
 exchange rates
 efficiency of financial markets
 Unstable interests rates
 Changing gross domestic product (GDP)
 inflation rates
 Unemployment rates
 Government intervention in the free markets related to financial service industry
 Levels of workforce skills
 Discretionary growth rate
 Economic growth rate
 Business cycle stage
 Labour costs and productivity in the economy and levels of education.
Social-cultural conditions that are impacting the way financial servicing industry operates
include:

 Shared beliefs and attitudes of the population in regard to financial industry.
 Culture (social convections, gender roles)
 Leisure and interests
 Attitudes (such as health and environmental consciousness)
 Entrepreneurial spirit (the way people are willing to invest in the financial industry)
 Demographics power
 Hierarchy and class structure.
Technological conditions that are impacting the way financial servicing industry operates
include:
 Competitors’ levels of competitions
 Rate of technological diffusion
 Technological impact on product offering and impact of value chain structure.
 Cost structure in the financial servicing industry.
Environmental factors that impact the operations of the financial service industry in
Australia include:
 Laws regulating environmental pollution
 Recycling laws
 Weather and climate change affecting consumer patterns
 Attitudes towards ecological products and support of renewable energy.
Legal factors that impact the way Australian business operates include:
 anti-trust laws that have been imposed by the government in the financial servicing
industry

 Data protection laws
 Health and safety laws
 Employment laws
 Consumer protection and e-commerce laws
 Discrimination law
 Copyright, patents or intellectual property laws.
1.3 Operations/ divisional management
Use of effective organizational structure and culture is the best way of building cohesion of
the regional division. For example, depending on the function and cultures of the self-managed
work groups, the organization can have a flexible divisional structure that can manage and
support workforce change. This section will conduct analysis of some organizational structure in
order to determine the appropriate structure for managing self-work groups and organization.
If OZAlpha Company adopts functional organization structure, the organization could be
divided into smaller workgroups for specific roles and tasks. For example, division by
departments each with its manager. The structure will ensure groups are grouped with a set of
skills and functions and therefore they will be able to focus on collective energies on executing
roles (Denman and Contreras, 2013 P.2707).
The company could also strategize and opt for a divisional structure that will allow
autonomy among the groups. Each division will have its manager and resources although they
all work under the same parent company. In addition through divisional structure, the
performance of each division including self-managed groups and organization can be measured,
team leaders or managers held accountable for profits and sales of their region, effective and

efficient coordination of activities among divisions and flexibility in responding to changes in
local markets. In addition, the company can change self-managed work groups to divisional
easily. The Company may opt for a matrix structure that allows employees to report to many
bosses depending on the situation.
I can recommend the company to adopt the divisional structure as it will make sure each
workgroup reports to its divisional manager hence will be easier to monitor team members and
their performances. Furthermore, the functional structure will ensure groups are categorized in
accordance with their skills and functions and therefore the organization will likely to have high
productions. In addition, all managers from diverse regions will eventually report to OZAlpha
Company in regard to performances and team progress. The structure is also flexible for the
company as it allows employees to report to their own managers in their divisions and several
managers to report to one chief executive officer.
Divisional organizational structure

ORGANIZING
Organizing in management functions involves development of organizational structure and
allocation of resources in order to ensure an organization meets its objectives and goals.
1.4 Divisional structure or design
According to Brescia, Colombo and Landoni (2016 p.132) Divisional structure splits
employees into segments which are corresponded to specific markets, services or products. In
terms of specialization, divisional structure will ensure each group or division has more
autonomy and task are divided in terms of specializations with functional units such as
research and development (R&D), marketing, customer care and personnel. The division of
tasks by specialization will be more advantageous to generalization as it will ensure there is
distributed performance from each member.
In terms of centralization, the decisions will be made at divisional levels because each self-
managed group designed to operate with its own resources and budgets and having one
manager controlling all activities taking place within that division.
In terms of the formalization, the team will use formal style of organizing employees. The
formal style will ensure there is evolution of roles as prescribed by the manger leading self-
managed work groups. Furthermore, the roles will not be easily changed and in case there is
need to change the policy the decision must come from strategic level management. The
decisions will follow hierarchical structure that involves consultations from employees-
managers- board of directors.

The formation of new division is mechanism as there is more formality and bureaucratic,
reliance in formal communication methods, association of centralized decision-making and
supervision and standardized procedures and policies
LEADING
1.5 Leadership style
The most common leadership approaches used in the organization include autocratic,
democratic and laissez-fair. In autocratic or authoritative leadership, leaders delegated tasks
without getting pieces of advice from employees. In democratic or participative leadership
style, leaders include employees’ inputs or decision making in decision-making process
although a leader makes the final decision. in the laissez-fair or delegative leadership approach,
leaders allow employees to have decisions and they become responsible for decisions taken by
employees.
1.6 Reward, recognition and motivation
The reward strategies for regional divisional staff include awarding employees with
yearly bonus compensations, an increase in commissions and an increase in salaries. The
recognition strategies regional divisional staffs involve the use of non-monetary rewards such
as “employee of the year” or even awarding employing with certificates at various levels of
management. According to Maslow theory of motivation, employees need to reward with non-
monetary and monetary incentives in order for them to perform excellently. The motivation
strategies for regional divisional staff used include use of internal promotional of employees,
provision of training and career development opportunities and mentorship programs, clear
definition of goals and effective leadership programs.

1.7 Communication
Communication and interpersonal skills are important for managers in OZAlpha
Company as they promote effective persuasions and negotiations in order to ensure success of
the team. In addition, effective communication ensures, there is minimized misunderstanding
and miscommunication in the workforce and reduction of workforce conflicts. The suitable
strategies for management communication to and from regional division staff is through emails
and technologies such as social media and Skype. The suitable ways of managing this
communication and maintaining a conducive environment that fits diversity workforces is
through training of employees on intercultural interactions and communication skills, providing
effective communication channels such as audio and video conferencing, airing of feedbacks
through suggestion boxes and emails and use of social media in a way that it improves the
profile of the organization.
I will recommend OZAlpha to facilitate its communication through the hierarchical
communications where communication is passed from employee –to – supervisor-manager-
board of directors. I will also recommend the OZAlpha to recruit employees without
discrimination of gender, location, race or disability in order to maintain workforce diversity.
CONTROLLING
Controlling in divisional regions will ensure there is verification of activities that occurs in
conformities with the instructions issued, plan adopted by an organizational and principles that
are established. In addition, Controlling will also ensure that resources are utilized effectively
as per the planned goals and there is deviation of actual performances from standard
performances. The aspects of operation that should be controlled and measured include

performances, employee turnover and competencies of employees and they should be done on
monthly basis.
Conclusion
Effective follow up of four functions of management including planning, controlling, leading
and organizing will ensure that OZAlpha Company sets up an effective regional divisions that
involves self-managed work groups. Recruiting diverse employees regardless of the ethnic,
gender, race or any other form of discrimination will ensure organization meets the short and
long term goals as all skills and experiences will be involved.

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