Planning Functions of Management

Topics: Management, Tyco International, Dennis Kozlowski Pages: 5 (1524 words) Published: November 1, 2008
Planning Functions of Management
“Planning is concerned with the future impact of today's decisions. It is the fundamental function of management from which the other four functions stem” (Erven, 1999). Considering planning is the first of the four functions of management, one can appreciate the importance and impact it has on the other functions. Production cannot begin and staff cannot be mobilized unless the planning phase has been completed. Factors however, do exist which affect the planning phase and if not considered can set the organization on a detrimental course. This paper will examine to what degree different management planning functions impact the Tyco Corporation as well as factors that influence the planning phase. Legal

“Tyco International, founded by Edward Breen in 1960 is located in Princeton, New Jersey and employs 247, 900 employees” (Tyco, 2008). While the name Tyco is synonymous with success and growth, yet little is known of the legal challenges encountered when planning a new product or altering an existing one. Issues such as liability, contract negotiation and possible revenue loss, which could impact ability to repay loans, are just a few of the influences which effect the planning phase. Considering Tyco is a global organization, the legal complexities of opening a new plant, acquiring a competitor or acquiring a new CEO can be daunting, yet must be carefully considered if the planning is to be successful. “When Dennis Kozlowski became the CEO in 1992, leading with aggressiveness acquiring several other companies into the organization” many legal ramifications needed to be considered (Tyco, 2008). Additionally, “In 1999, when after a stock split, Tyco merged and bought out several companies, making their profits grow beyond 30 billion dollars” the legal complexities involved in planning any corporate strategy increased greatly (Tyco, 2008). While legal considerations must be made during the planning process, one must also maintain a positive ethical stance that is consistent with the community. Understandably, when planning a strategy one must consider the legal ramifications, yet one must also appreciate the ethical effects on the organization. Ethics

“Nothing is more important to a company than its credibility -- credibility with investors, customers, government leaders and employees” (Breen, 2007). For any phase of planning to be successful and accepted by the organization, that plan must be in line with the current ethics of the organization. Tyco has seen firsthand the effects of erroneous ethical decisions during the planning phase. During the Enron and WorldCom fiasco, Tyco was targeted for suspected irregular accounting practices. Obviously, the decisions made by the Accounting department during the planning phase did not complement the actual ethics of the organization. Tyco has taken many strides to improve their image including “appointing a new CEO Ed Breen in 2002” (Tyco, 2008). Additionally, Tyco has drafted a new employee Guide to Ethical Conduct. That document, approved by the new Board of Directors, sets forth rules in areas of harassment, conflicts of interest, compliance with laws, and fraud” (Breen, 2007). The new employee guide is another stride in creating assurance that ethics are a strong consideration in the planning phase. While legalities and ethical standards are strong influencers to the planning phase, often allegiance to the stockholders or the bottom line can skew a previously productive plan. Corporate responsibility means more than just making the investors happy, yet this not always the case. Corporate Responsibility

“Corporations have an interest in maintaining a successful front in the eyes of shareholders and securities analysts because investors buy shares of companies that are healthy and growing” (Einstein Industries, 2008). Too often, as was the case with Tyco, managers and CEO’s forgo legal and ethical guidelines during the planning phase which...

References: Breen, E. (2007). Corporate responsibility: Governance. Retrieved on May 20, 2008 from +Breen/??&DCRID=1977593717
Einstein Industries, Inc. (2008). National legal news: Shareholder fraud. Retrieved on May 20, 2008 from crimes/securities-fraud/shareholder-fraud/
Erven, B. (February 24, 1999). Management Excel: Helping people improve their management skills. Retrieved on May 20, 2008 from
Reuters, Inc. (December 21, 2006). SEC settles with former Tyco exec. Retrieved on May 20, 2008 from ID=2006-12 21T170658Z_01_N21177142_RTRUKOC_0_US-SEC-TYCO.xml
Tyco, International. (2008). Investor Relations: General press release. Retrieved on May 20, 2008 from
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