The Planning Function of Management
Planning is “the process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals” (InvestorWords, 2011). Planning is pivotal not only for business success but also for personal life. In addition, planning is always geared towards achieving a specific objective(s). Moreover, planning is the main function of management, and it takes the most priority in the management process (Bateman, 2010). The planning function is well related to other management functions, and that is why it is implemented by the managers at all levels of the management process. Generally, planning is paramount in deciding the direction that all business activities will take. In the planning process, different business problems are evaluated, decisions are made regarding the course of action to take, and then the business activities are changed accordingly.
Planning is beneficial to the success of the business in the following ways. First, it accelerates the process of achieving business goals. This due to the fact that, in planning, objectives are clearly set and the mechanism of accomplishing them stipulated. Secondly, it enhances togetherness and focuses since people will be working with well-defined objectives. Additionally, it improves competitiveness and reduces friction and duplication processes. Lastly, it improves managerial effectiveness and eliminates/reduces hasty decisions and actions.
Generally, planning requires a considerable amount of time. Due to this factor, the planning moves mostly gradually, taking a step-by-step approach. Usually, planning will involve the following steps: first, classifying the problem, which involves identification of the problems or opportunities, and then understanding the necessary course of action in order to tackle the issues. The second step is determining the objectives; this involves deciding the specific objectives that will be pursued clearly. The third step is the gathering of data and information relating to the problems facing the business.
This makes the planning function to be result-oriented. The fourth step is analyzing and classifying information; this enhances sorting between the relevant and irrelevant information facilitating purposeful use of information. The Firth step involves establishing planning premises, which are different assumptions and predictions relating to the future of the business that acts the background for the planning processes. The sixth step involves determining the alternative plans, including considering the different alternative plans and choosing the best alternative for execution.
The seventh step is choosing the operating plan and preparing the derivative plans. In this case, the preparation of the derivative plans will enhance the effective execution of the master plan in sub-sections. The eighth step involves arranging the timing and sequence of operations. This is followed by securing the participation of employees and departments. The last step involves the follow up of the proposed plan. Therefore, it is crucial for the management to follow the above steps in the execution of its planning function.
In essence, a successful company like Halliburton must always observe proper management of planning function through analyzing the present situation, evaluating the future prospect, laying out concrete objectives, and deciding which opportunities the company will participate in (Bateman, 2010).
The influence that legal issues, ethics, and corporate social responsibility have had on management planning at Halliburton Company
Halliburton Company was founded in 1919, and it is one of the largest global suppliers of products and services to the energy industry (Halliburton, 2011). The company provides employment to over 60000 people worldwide in around 80 countries serving the upstream oil and gas industry throughout the lifecycle of the reservoir, which accounts for more than 18.0 billion dollars per annum (Halliburton, 2011). The company has continuously remained a leading player in the global energy sector despite many challenges it has experienced over the decades, especially due to various legal issues relating to the planning process. Among the key drivers of its success is the corporate and business approach, the company adopts in various areas where it operates.
The approaches it adopts are mainly shaped by its sustainability goals in efforts to remain competitive. In order to avoid various legal issues, the management encompasses the idea of remaining a good corporate neighbor to the communities in its planning process: through promoting better environment, providing remarkable social and economic benefits by creating sustainable relationships using sustainable technology and sourcing, and maintaining the company’s integrity and accountability through transparency in reporting (Halliburton, 2011).
Most of the major legal issues pertaining to Halliburton Company are related to transparency and reporting issues. That way, the company’s management is very committed in its planning process on transparency and reporting to the extent that it has formed a strategic partnership with several companies for the purpose of identifying and changing any policy weakness while remaining focused on the business goals and its stakeholders. Though quite successful in terms of its operations, the company has witnessed several legal issues, including allegations of overpricing of its services to the U.S. government in Iraq and the alleged kickbacks in Nigeria. In the Nigerian saga, it was alleged that the company issued bribes worth $180 million to secure a multibillion-dollar natural gas deal, while for Iraq, the Halliburton unit Kellogg Brown and Root, a major America’s contractor in Iraq, was being investigated by the Justice Department for overpricing meals for military and fuel taken into Iraq (Pleming, 2004).
Apart from legal issues, the company also had a fair share of ethical issues. Legal issues and ethical issues that touch on Halliburton are quite interrelated. Thus, the management, in its planning function, had to deal with adopting better transparency and reporting policy. For example, Halliburton Company has recently been accused of unfair competition due to the manner in which it acquires government contracts; corruption and fraud, especially with the Nigeria kickbacks allegations and the U.S. Securities and Exchange Commission (SEC), alleged scandal for accounting irregularities that settled with $7.5 million fine (Ethics in Business, 2011). So far, the management responded to these by being more accountable and responsible in its accounting process.
Corporate social responsibility is a legal obligation of companies to channel some of their earnings to the welfare of the communities in which they operate. Since the time it was established, Halliburton has channeled a vast amount of resources and time to charitable purposes to communities where its people reside and work. The company as achieved these by building neighborhood homes, supporting local youth, environmental conservation initiatives, treatment and eradication of disease and supporting education initiatives through a number of ways such as corporate contributions, employee giving, employee volunteerism, Halliburton Foundation Inc, and charity golf tournament (Halliburton, 2011). To achieve this, management has always incorporated its corporate social responsibility in the overall company plans and budget allocations set aside to finance these programs and activities.
Factors that influence the company’s strategic, tactical, operational, and contingency planning
The major factors that influence Halliburton Company’s strategic, tactical, operational, and contingency planning include technology, competition, market availability, diversity, and manpower. Technology is one of the key drivers of this company with the two divisions – Completion and Production, and Drilling and Evaluation – possessing state of the art technology that has enabled the company to offer a huge array of products, services and integrated solutions for oil and gas exploration, development and productions (Halliburton, 2011).
Using the latest technology, the company is able to serve the gas and oil industry in all key areas from locating oil reservoirs, control and analysis of geological data, drilling, and ensuring optimal production throughout the lifetime of the reservoir. To enhance continued performance, the company has an interest in developing new technologies and products, to the extent that it is even in the process of developing a new source of energy. Through its Explosive Products Center, the company is well recognized globally for developing safe and reliable explosive products used in all energy sectors (Halliburton, 2011).
In terms of competition and market availability, the company has continued to remain one of the major contractors to the U.S. government. Also, by forming a strategic alliance with other major companies in the energy industry, such as France Technip, Japan Gasoline Corp, among many others, the company as to become more competitive in the industry. Additionally, though controversial, the company has managed to work closely with governments of the countries they work in, a factor that has enabled them to acquire many contracts compared with the competitors i.e., especially from the U.S. government. Another key factor in the company’s management planning is embracing diversity. The company has employed people from diverse backgrounds, something that has reduced biases and positively influenced the company’s business culture. By embracing diversity, the company has also created better supply chains and partnerships with the communities in which it operates.
Bateman, T. (2010). Management: Leading & Collaborating in a Competitive World. NY: McGraw-Hill.
Ethics in Business. (2011). Ethics at Halliburton & KBR. Web.
Halliburton. (2011). Company Information. Web.
InvestorWords. (2011). Definition of planning. Web.
Pleming, S. (2004). Halliburton Tackles Legal Problems with New Ads. Web.