Management is an important aspect in all business organization regardless of their size. It ensures proper utilization of the available resources in order to achieve a company’s goal, objective, mission and vision. Management has got various concepts, planning being the core upon which the rest should build on.
Planning has got many merits on the company’s performances and failure to plan can have adverse effects eventually leading to collapse. In this paper, WorldCom is the subject of study where effects of planning and various factors that led to its failure have been looked at.
Planning is very important in any organization as it helps one focus ahead and determines what actions to be implemented in the future. It falls among the four functions of management, the rest being directing, organizing and controlling. Planning is an on going process and because unavoidable factors will always be present to influence a company’s performance either positively or negatively, adjustment to the planned action is required and this can be termed as strategic planning.
It gives a systematic way of determining when a given activity or task in the organization is going to be executed, which manner it is going to be done and the individual responsible for executing it.
It is a basic function of management which enables adequate use of available resources in order to meet the demand. It ensures achievement of the set goals by use of facts and not guesses. Since objectives and goals are set in planning, alternatives are also availed by the same process so as to maximize the results of an organization at the long run.
As a basic function of management, planning is vital for success of any company as it determines the current position and gives a way of reaching future expectations. It simplifies ways of achieving set goals in an organization. Strategic planning is vital as it enables establish a company’s strengths and weakness (Rane 2007).
WorldCom organization is a company responsible for telecommunications. In 2000, this company failed in its services delivery due to lack of proper management plan which is essential in achieving a company’s goals and objectives.
Firstly, the management did not control the bad actions such as acts of fraud by those under their control. Infact, they joined hands in the perpetuation of these acts which are a detriment to success of a company.
Under, proper management, those above such as the human resource managers and departmental directors are supposed to control when, how and who is responsible for certain action and that a proper coordination among the various departments is available.
Lack of such responsibility saw this company which initially performed well go down. Secondly, information dispersion was not done in the right manner, there are several instances where transactions were carried out within minutes and the stakeholders had no idea or received very short notices of the same.
Proper communication is important for it ensures satisfaction among the involved parties. For a company’s development, it has to be flexible and be in a position to adapt to the changes that occur; this is made possible by research on the desired technological advancements, this helps the company offer services well to the satisfaction of the customers.
There should be proper consultations before making decision that is likely to affect the functioning of the organization at large. This is evident in WorldCom acquisition of Skytel, Inc and intermedia Inc. Other cases of decision making failures included the debt management, loan and benefit management, where the directors made these decisions on their own. Contrary to management plan, directors of WorldCom become self centered in that they were up to their own interests rather than the company’s wellbeing.
This contributed to management failure which contributed greatly to the collapse of the organization. Individual responsibility and proper governance lacked in WorldCom which form the basics for strategic planning. It is for these reasons that the organization did not perform to the expectations (Worldcom et al, 2003).
In planning, social responsibility requires an individual or a group’s engagement in an activity that is helpful to the society and not just to an individual.
Usually, research and development are meant not to maximize profits in an organization but to serve the customers satisfactorily and in a safer manner. By WorldCom, not involving social responsibility, which is by not involving in actions that are beneficial to all, it did not succeed.
Top officials engaged in fraud cases involving financial statement in order to gain not minding about customer’s interests. Apart from business responsibility, managers of a company may engage in activities such as conducting fund drives to collect money that can be used to help the needy in the society such as orphans, HIV/AIDS victims and the aged. In order to improve the corporate image of a company, management decisions that are right and good are made regardless of how unprofitable they might be.
Ethics also call for actions that are aimed at bringing much profit to the company for the benefit of all the employees. Though some actions may be considered unethical to some individuals, they are undertaken so as to help a company gain advantage such actions may include employees’ relocation and retrenchment of others in order to maximize profits.
In many cases, governments impose laws and regulations which a company must operate under; this affects its normal running as it must adhere to such imposed rules. In such cases deregulations has been employed in most companies WorldCom being among them (Thinking made easy, 2008).
Several factors may have had an influence on the planning management of WorldCom, such may include; finance, lack of competent labor and inexperienced mangers. As a large company that deals with communication system, a lot of money was required for its proper running but this was unavailable leading to the company’s borrowing of loans.
Lack of proper management of debts within the company led to misappropriation of funds resulting to greater debts accumulation. Human resource is vital for such a company in the production of the information system, this was in adequate in the company and the incoporaration of some system without the employee’s knowledge led to low outcome.
Managers for this company were self-centered and they made most of the decision on their own with an aim of benefitting themselves which is contrary to management requirement. Lack of good communication protocol also resulted to the company’s failure.
In conclusion, for the success of any organization, it is important to have proper planning failure to which the company can easily collapse or fail to achieve its set goals. Without planning WorldCom did not perform well to the end and all companies are vulnerable if planning is not incorporated in its management process.
Rane Sanjay .(2007). The Four Functions of Management: Foundation for All Management Concepts. Web.
Thinking made easy. (2008). Web.
WorldCom et al. Second interim report of dick Thornburgh, bankruptcy court examiner (2003). Web.