When to Call the Organization Doctor


The first step to solve any problem is to diagnose symptoms. A solution cannot be created without first defining what the problem is. This holds true for any company. As opposed to hiring consultants to administering solutions to a company's ailments immediately, the managers should first diagnose organizational problems within the company. The answer might right be within. Managers should be trained to have and use diagnostic tools. Essential tools include the knowledge of organizational-effectiveness elements; and a methodology to use them. The functions of management are illustrated in this framework.

This article presents a situation where a company may be experiencing problems within the organization. Implementation of the four functions of management is essential in effectively achieving the company goals. Planning provides a basis or a foundation for coordinating and directing activities of the organization in order to achieve these goals. It sets the stage for all other management functions by establishing purpose and direction. After diagnosing what the original problem is, realistic solutions have to be presented. This is the goal that has to be achieved. A plan must be developed to administer and coordinate the resources for which they are responsible so that the goals can be reached. While top management establish goals and strategy overall, managers throughout the organization must develop operational plans for their workgroups that contribute.

A strategic direction has to be developed, and subordinate departments should align their goals with that direction. This is part of the organizing function. Managers should organize the members of the workgroup in organizations so that information, resources, and work flow logically and efficiently throughout the organization. They should determine the tasks that must be done, who will do them, and how those tasks will be managed and coordinated. It may be beneficial to have an organizational structure (organizational chart). This will allow better understanding of workflow, and further, will allow the organization to be more responsive to changes in the environment.
Managers must also be capable of leading the members of their workgroup towards achieving their set goals. Effective leadership is the key to achieve this. Leaders are able to enhance the performance of their direct employees by setting goals in the beginning of the review period; supervisors coaching their performance throughout; and giving an honest and fair feedback at the end of the period. A good leader must understand the dynamics of individual and group behavior, be able to motivate their employees, and be an effective communicator. Rewards may be given to employees who are motivated and successful in achieving company goals.

Controlling is the monitoring of the performance of the organization, identifying deviations between planned and actual results, and correcting situations as needed. When an organization is not performing as planned originally, managers must take corrective action. This may involve either taking a more aggressive approach to the original plan or adjusting the plan to the current situation. It has been shown in research studies that infrastructure is an underlying foundation required for performance. Communication between two departments is adversely affected if their physical locations are more than 100 feet apart. Control is an important function because it provides a method for ensuring that the organization is moving towards the achievement of its goals.

After applying these elements to diagnose the problem, the first step is to review the current state of the organization in relation to these elements individually and independently. Studying their inter-relationship or systemic fit with one another is the next step. Once a fit problem is identified, a systemic fit analysis is complete, managers will have to either: live with the problem and devise a plan to control losses; use internal resources to fix the problem by redesigning some elements; or hire the help of a consulting firm.

These management functions and systemic elements are defined in our previous paper focused on Hilton Hotels, and the external and internal factors that impact its planning function of management. Planning has been labeled the primary function of management because it sets the stage for all other aspects of management. Along with other practical reasons for planning, managers need to plan in order to cope up with uncertainties in the environment. These may be the external and internal factors described previously. A decline in business, compounded by rising costs in the hospitality business can compel the company to take drastic yet effective cost-cutting measures. So here, the problem is diagnosed as the operational costs and profit being on an apparent inverse proportion. Theoretical costs are higher. The plan is to implement cost-cutting procedures. It will be beneficial for Hilton to review their financial trends - such as break-even analysis, or cost-volume-profit analysis. This helps planners gauge the potential impact of price changes and profit objectives on sales volume. After this is accomplished, measures within the organization have to be taken, such as downsizing in personnel, and consolidating departments to promote multi-tasking. Marketing strategies have to be visualized to generate more business. The use of technology can bring promising results. A lot of things can be accomplished faster, more accurately, and more efficiently.


Llewellyn, Robert N. (March 2002). When to Call the Organization Doctor.
HRMagazine, 47(3), 79-81.

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