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An organizational study approach to planning problems in an Industrial–Military activity
An Organizational Study Approach to Planning Problems in an Industrial-Military Activity· Frederick C. Weston, Jr. t
Colorado State University, Fort Collins, Colorado
The problems of planning and managementin an Industrial-Military activitypresentparticularproblems. This article outlines a study into the operation of such a unit and highlightsthe absence ofprofit type criteria or any other form of quantativemeasure ofperformance. It also illustratesthe limitationsof the formalized planning systems whichexistin the environmentdescribed. The study findingssuggest the serious need for review of the mechanisms of planning between the operating organizations and higherlevel organizations.
W
ITHIN
THE
MILITARY
STRUCTURE,
there exist several organizations whose mission or function is output oriented. Organizations of this type may closely resemble industrial firms engaged in manufacturing. For definitional purposes, an 'industrial-military' organization is defined as an organization under military command that is engaged in industrial operations, that competes for and receives funding for project type work, and whose efficiency is measured by the ability to accomplish a specified mission at the lowest cost. In contrast to managers in business firms who focus on the selection and determination of goals and objectives, formulation of policy, the *Certain material within this paper is taken fully or in part from references (1). tThe author is an Associate Professor at the College of Business, Colorado State University.
58
planning process, and future profits and markets, managers within an industrialmilitary organization emphasize concepts of weapon systems planning and program management. The objective of this paper is to report some of the planning problems that exist within an industrial-military organization. The organization studied was a typical ammunition depot within the organizational responsibility of the Naval Ordnance Systems Command (NOSe). ·BACKGROUND It is important to establish at the outset
that there are unique differences within the planning literature with respect to several basic planning questions. Again, these differences largely stem from the orientation of the corporate planning literature versus that of the defense planning literature. Some of the basic planning topics in question form, affected by this difference in orientation, and with respect to an industrial-military organization, include: • What is planning? • Why is planning necessary? • What inputs are/should be a part of the local planning function? • What are the constraints to planning? • What areas of planning are/should be included within the planning function? • How should the planning function be organized? • What results are/should be expected from formalized planning?
• What type of planning process should be employed? • What is/should be the time span of planning? In conjunction with the above questions, 50 managers in four line or operating departments constituting three levels of organizational responsibility were asked several integrative questions pertaining to planning.t The results obtained are discussed within the sections that follow. Planning Problems Related to the Concept of Planning
Managers within the industrial-military organization studied perceived planning in a conceptual framework consistent with the current management literature. Higher level managers viewed planning more broadly than did lower level managers. However, the concept ofplanning perceived by most managers was clouded by a lack of planning on a total organizational basis. Eighty-four per cent of those managers interviewed felt that planning on a total organization basis was not a current reality. The strength of this feeling was directly proportional to the level of management. Fifty per cent of those managers interviewed felt that real goals and objectives were established for the organization while the remaining 50 per cent stated just the opposite. Some managers who stated that goals and. objectives did exist, stated that they were meaningless from an operational point of view. tEvery effort was made to insure that the sample selected would be representative of managers in similar industrial-military organizations.
LONG RANGE PLANNING
These results combined indicate that total organizational planning does not exist and that there does exist an absence of real goals and objectives to provide the basis for any realistic planning. This situation did influence managers as to how they perceived planning since some managers were totally unaware of the concept, purpose and benefit of total organizational planning and thus viewed planning in a narrow, personal context. Managers also were asked to respond to the impact of certain postulated variables to their perceived concept of planning. The variables considered were: EPF-the exclusion of a profit function or substitute criterion; CBP-the current budgeting process; NPS-formalized planning systems within the Navy; BLR-bilinear responsibility; WFS-the extent (number) of workload funding sources. Of these variables, WFS, the extent of workload funding sources, was considered to have the most impact on the perceived concept of planning. Managers responded that their concept of planning was strongly influenced by how the funding sources at the higher organizational levels viewed planning, including what planning would consist of. However, these same managers felt constrained since a lack of profit or an adequate substitute criterion negated a basis from which any planning effort could be evaluated. Planning Problems Related to the Need to Plan
Participants were queried about the need to plan within an industrial-military organization. Not one manager responded negatively when asked about the need to plan on a total organization basis. Some managers questioned what role with respect to planning an organization of the industrial-military type, considering its
low position within the total defense hierarchy, should play. Lower level managers often expressed confusion and concern as to the implications, problems, and even benefits of total planning. While higher level managers possessed a greater understanding of both the concept of planning and the need to plan, managers at all levels again felt that variable WFS has the most significant effect on the need to plan. To support this conclusion, several managers stated that operational funds are received from numerous sources, with timing and amounts uncertain, such that no overall direction exists (see Table 1). Many participants expressed the view that all the postulated variables have a positive effect on the need to plan since little information was obtained from the formalized planning systems such as the RDT&E Planning System, the Navy Planning and Programming System, and the Shore Facilities Planning System. In addition, Bilinear responsibility was perceived as an organizational problem that increased the need for total organizational planning. The reponse to the current budgeting system was similar to that of the formalized planning systemslittle information was received and this generated a positive need for planning. Planning Problems Related to the I nputs to the Planning Process
A major point made by several managers, with respect to the formalized planning systems, was that those responsible for the higher level planning systems were incapable of providing the operative, organization with the information needed for even a normal level of operation. Many managers felt that the nature of the business precluded anyone from predicting defense needs in general and ordnance needs in particular. Several made reference to the standard 'GIGO' cliche. Another planning problem emphasized by several participants was that one
Table 1. Responses Indicating the Variable Having the Most Significant Effect on the Need to Plan.
Variable
(%)
Branch Manager
EPF CBP NPS BLR WFS No Response
3 4 2 3 13 1
( ( ( ( ( (
Total
26
(100)
DECEMBER, 1973
12) 15) 8) 12) 50) 4)
Managerial Level Department (%) Director or (%) Division Assistant Manager
-
1
7 5 1 6
( 37) ( 26) ( 5) ( 32)
1 3 -
19
(100)
5
-
( 20) ( 20) ( 60)
(100)
Total
(%)
4 11 8 4 22 1
( 8) ( 22) ( 16) ( 8) ( 44) ( 2)
50
(100)
funding source may assign funds for work and yet be unable to authorize the billets (manpower) to perform the expected services. Managers commented also on the lack of planning assumptions, quantitative objectives, a single cource of planning information, and the absence of a longrange outlook. Consistent with these comments, 46 per cent cited the Navy Planning Systems and the variable NPS as having the most significant effect on the inputs to the planning process. Thirty per cent of the managers cited WFS. Thus, at the time of this study, and for the type of organization studied, it can be stated that planning systems within the Navy, as a whole, contribute at best marginally to the information received at the local activity level. Planning Problems Related to the Constraints to Planning
Many managers felt frustrated that they were constrained, that the existing planning systems were of marginal value locally, that little direction regarding the future was apparent, that more than one authority line existed, and that communications were not adequate. A general consensus was that 'real' planning (where control could be exerted) was limited to a single fiscal year. The effect of this was not knowing what or how to plan for future equipment, modernization of facilities, and the like. This was considered a major constraint. Several managers at all levels felt that the nature of ordnance defense planning was also a major constraint. Production, testing and evaluation of weapon system components, and even some aspects of research and development and weapons engineering, at this organizational level, often is done on a 'crash' basis. The demands of the war in South-East Asia, shifting priorities, and newly discovered problems or supply line deficiencies often account for these short lead times that are imposed by a higher level. All levels of managers were quick to criticize that allowances were not being made at higher organizational levels that the war would go on. This is evidenced by the fact that the Shore Facilities Planning System has a lead time of at least 3 to 4 years from the time a plan is offered to the time funds are received, if ever at all. Thus, all requests for funds must be labeled 'emergency' to receive any attention at all. Many managers were not even aware that this system existed. These managers considered this lack of information and communication to also be a major planning constraint. 59
Another 'constraint' pertained to both the extent of workload funding sources and bilinear responsibility. Many managers pointed out that work was being received by one funding source but the billets (manpower) to perform this work were often controlled by another source. This also was considered a major constraint by those interviewed. In fact, one source has billet control. However, much of the work performed is for funding sources other than the source possessing billet control. These sources had no authority to authorize billets, and the fact that field activities under the control of one parent organization were performing work for another parent organization (funding source), often led to controversy between the two. This situation was cited often when 'the extent of workload funding sources' (WFS) was stated as the variable most affecting the constraints to planning. Several managers cited additional constraints they felt existed. These constraints, cited less frequently than the major constraints immediately above were, in general, considered to be of a lesser nature. These are summarized briefly as follows: Endogenous Operational Constraints (1) Varying values placed on total organization planning by current and future commands. (2) Appropriate feedback for analytical comparisons of plans with performance. (3) Lack of worthwhile historical information of costs on major as well as minor projects/products. (4) Lack of workload priority determination, often resulting in slippage of work schedules and neglect of priority work. (5) The lack of a civilian liaison person to phase in and phase out both new and old Commanding and Executive Officers. (6) Internal civilian-military differences. (7) No single planning philosophy backed by either internal personnel or external authorities and funding sources. (8) No forecasts or even attempts at forecasting. Exogenous Operational Constraints (1) The inability of funding sources to communicate with each other. (2) Inability to hire and fire civil service personnel as needs dictate. (3) Lead time in contracting, often resulting in not having suitable materials when needed. 60
Planning Problems Related to the Areas of Planning
(4) The necessity of acqumng needed equipment from project funds when specific allocations for this same equipment may not have been made. (5) Implication that an 'ammunition depot' is restricted to ordnance related production, R&D, engineering and testing.
The two areas of planning that were indicated as most important to line managers were manpower planning and facilities planning (see Table 2). Another conclusion derived from Table 2 is the lack of stress placed on market planning (seven
Table 2. Responses Indicating the Most Important Areas of Planning (participants were asked to make two choices).
Managerial Level Area of Planning
Manpower Planning Facilities (capacity) Planning Financial Planning (other than budgeting) Scheduling Finished Output Budgeting Market Planning Organization Planning Process Planning Quality Level Planning Product Planning Maintenance Planning Total
Department Director or (%) Assistant
Branch Manager
(%)
Division Manager
(%)
13 14
( 25) ( 27)
14 7
( 37) ( 18)
2 3
( 20) ( 30)
29 24
6 4 5 3 3 1 2
( 12) ( 8) ( 10) ( 6) ( 6) ( 2) ( 4)
( (
1 1
( 10) ( 10)
1
(
2)
2 3 3 3 2 2 1 1 -
9 8 8 7 5 4 3 2 1
(100)
38
-
52
(6) Inability to compete with private industry for needed skills with regard to salaries. Exogenous Planning and Information Constraints (1) The congressional system of annual appropriations. (2) Uncertainty as to who future customers will be or type of work to be performed; corresponding problems of facilities, tooling and equipment. (3) Uncertainty as to what future weapons and weapon systems will require in ordnance support. (4) Lack of access to higher level planning documents. Three variables, NPS, BLR and WFS, were cited with almost equal frequency as having the most effect on the constraints to planning that exist. The number of funding sources discourages overall consistency of information and guidance. Bilinear responsibility compounds the funding source problem in that all levels of managers receive information from a multitude of sources. The formalized planning systems were, for the most part, at the time of this study, meaningless as a planning instrument at the local level for the type of information desired.
5) 8) 8) 8) 5) 5) 3) 3)
1 1 1 -
( 10)
(100)
10
(100)
(
(
( ( (
(
( 10) ( 10)
Total
100
out of a possible 50 respondents) and financial planning other than budgeting (nine out of a possible 50 respondents). This low level of response in these two areas is a direct result of the nature of an industrial-military organization-military, with aggregate planning and workload decisions often performed externally. Individual managers within the local level organization are interested in aggregate planning, as is evidenced by the stress given facilities planning. However, coordination, emphasis and direction, internal and external, is apparently lacking. Each participant also was asked to identify the area of planning that currently receives the greatest current emphasis. Each participant could use the list of areas of planning (provided by the author) for this question if he so chose. A majority ranked budgeting first and manpower planning second. Facilities planning, previously indicated by 24 participants as most important, accounted for only five responses. The point was made again by several managers that budgeting was stressed, but that the organization and perceived purpose of the local budgeting process apparently was not intended for line department use. Thus there was a difference in the areas of planning that were perceived as most important and the areas that were most heavily emphasized. The difference was due to the fact that LONG RANGE PLANNING
managers felt that the areas emphasized, budgeting in particular was intended for external accounting purposes and not for internal control and planning purposes. Finally, variable WFS (the extent of workload funding sources) appears to have the most impact on the areas of planning at the local activity level. This result was attributed to lack of direction from funding sources as to what area should be emphasized at the local level. Planning Problems Related to the Organization of the Planning Function
.Most managers concurred in principle WIth the current scheme of organizing the planning function as a staff function to the Co.mmanding Officer. Several participants p010ted out that since Command is often thought not to be in tune with the departments, the planning group should be responsive to the line departments. ~everal suggested that the planning group, 10 fact, could only function in an advisory ~ol~ ?y coordinating the planning of the ~ndlvldu~l departments and summarizing 10putS 1OtO an aggregate plan. While managers did expect to engage in planning on a departmental basis, the point also was expressed that unless some coordination and guidance emanated from a single source, planning would be independent both of Command and the other departments. Another question pertains to whether the planning staff or the line departments should engage in planning. The answer was paradoxical. Some, particularly lower level managers, felt that the planning staff ~hould perform the actual planning only If proper guidelines, backing and direction were issued by Command to the planning staff. On the other hand, these managers felt that the role of the depart~e~ts w.as that of doing the actual planning If dIrectIOn was lacking. In this latter case the planning staff could only coordinat~ and summarize. A major reservation to centralized planning felt by some managers was the possibility that planning personnel would ~e unfamiliar with departmental operatIOns. It was felt that, if this did occur planning would be unresponsive t~ departmental desires and that cooperation (and thus communication) would ebb to the poi?t of marginal results. This feeling was qUIte strong at all managerial levels within the line departments. Rapport was felt to be necessary to keep the planning staff 'from going off into left field,' as was stated by one department director. The general consensus was that both the planning staff and the departments need to DECEMBER, 1973
develop a sense of mutual trust and understanding. No organizational relationships would work without this type of working relationship. The variable seen as most influencing the appr~ach to organizing the planning functIon was NPS (Navy Planning Systems). Though many managers had expressed a lack of knowledge of the formalized planning systems within the Navy, NPS was chosen as the variable that should exert the most influence on the form of organization locally. Planning Problems Related to the Expected Results from Formalized Planning
An attempt was made to ascertain what results from planning were expected. The response from all levels of management was that goals and objectives were expected, that workload priorities would be established, and that some indication wo~ld be given as to whether the organizatIon would remain ordnance-oriented including whether activities and service~ would expand. Department directors doubted that planning would bring worthwhile results. This conclusion by these managers was based on the present system where goals an~ objectives were missing, direction and gUldance was absent, and desired information from higher level planning systems did not. ~l~er down to the field activity lev~l. DIVISIon managers were quite evenly spht as to whether or not positive results could occur. Branch managers, on the whole, were more optimistic than both division managers or department directors. Each participant was queried as to what problems he thought would be encountered in any attempt to establish formal planning. The problems mentioned most often were: • Personnel; • Communication; • Rapidity with which the defense picture can change; • Gaining and maintaining departmental support; • Staff-line problems; • Obtaining needed information (external and internal); • Selling the need for planning flexibility; • Higher level recognition and support; • Establishing work priorities goals and objectives. ' Variable NPS was indicated as the variable, of those postulated, having the greatest positive influence on the results expected from formalized planning. The
response to NPS is a most unusual result l.ight of the fact that several managers mdlcated they were not familiar with or only marginally familiar with, these for~al systems. Thus, it must be interpreted that the participants who indicated NPS to this question were again answering what should have the most effect on the expected results. Investigation resulted in the conclusion by the author that this premise was correct. ~n
Planning Problems Related to the Planning Method·
There was consistent agreement among all three levels of management that the planning method, whatever it is to consist of, must be continuous and include both short-range and long-range planning. Managers perceived the need to consider almost separately but yet continuously: the shorter range dynamic changes associated with the type of business engaged in and also the longer range trendproducing factors. There was a consensus that the form and content of any planning process should be the responsibility of the planning staff. The planning staff, as a staff function, has no line responsibility; thus it was felt that ~~s group should assume the responsib~lity o.f preparing. guidance to planning mcluding overall dlfection. Variable NPS (Navy Planning Systems) was cited, as having the most effect on the form of planning process employed, with the frequency of response increasing with managerial level. The fact that several of the participants were not aware of these formalized planning systems or did not feel they were receiving the benefit of them, to these managers, apparently is irrelevant. Based on follow-up questions asked of several of the participants, the author must conclude that the responses indicate this variable should have the most effect on the form and content of the planning process adopted, believing that any such process should be compatible with higher level systems. Those managers who did not advocate compatibility of higher and lower level planning systems pointed out that little is being gained from the higher level systems. Variables CBP and WFS were responded to nearly as often as NPS as variables having the most significant effect on the appropriate method of planning. Managers who responded to CBP held the view that
*In the specific organization being studied, a planning process had been proposed to Command and the four line departments prior to this questioning.
61
the budgeting process was not functioning properly in a current context, and would need to be adjusted, modified or adapted in order to obtain the necessary shortrange operational type information desired. These managers also considered the budgeting process as having considerable impact on the manner in which long-range financial information was injected into the planning process. Those that responded to WFS adopted the viewpoint that since funds are obtained from several sources, any planning system must be responsive to the reporting requirements of these sources and yet flexible enough for local use. Planning Problems Related to the Time Span of Planning
Four out of five department directors or their assistants stated that the time horizon for an industrial-military organization of the type defined should be 5 years. The remaining director stated that a 3-year time period should be in effect. A 5-year idealistic time horizon was also the general feeling of both division managers and branch managers. A few instances existed where a division or branch manager would state a 1- or 2-year limit because of apparent budgetary limitations. Longer periods of time, such as 10 years, also were stated occasionally. Here the thinking was often in terms of planning for a time horizon consistent with the next two or three Commanding Officers. Several managers prefaced their time estimates based on short and long-range planning considerations. Still, as-year period was considered both appropriate and adequate. This 5-year period is most consistent with current planning literature pertaining to the private industry sector and also various elements of the Department of Defense planning scheme such as the Five-Year Defense Plan (FYDP). While these same managers felt that 5 years was appropriate for planning
62
purposes, very few felt that this time period was in fact realistic. The maximum realistic limit offered by any of the five department directors was 2 years. Several division and branch managers stated that the fiscal year served as an effective upper limit. This result illustrates quite clearly that managers feel very positive about the need to plan for a time period greater than that perceived to be actually feasible with any degree of worth or success. This is a restatement of the feeling by these managers that the type of business engaged in, and the apparent lack of information, flexibility, and overall direction, constrain the time span of planning. Overall, brush-fire or limited wars of the future, coupled with higher level planning system requirements and expectations, were seen as having the overriding influence on establishing a time horizon for planning at the field activity level. Consistent with this observation, managers chose NPS as the variable having the most effect on the time span of planning. Here again, the interpretation is that NPS was perceived as the variable that should ha~'e the most effect on the time horizon of planning. SUMMARY
At the time of this study, a profit type criteria was absent in the industrialmilitary form of organization, including any other quantitative measure of performance and operating efficiency. Many managers cited the need for a profitlike criteria. Several also felt that not having such a criteria was a constraint to planning of such magnitude to prevent, on its own, positive planning results. The current budgeting process at the field activity level does not serve local needs. In the opinion of those managers interviewed, the budgeting function was considered ineffective for planning purposes and is deemed an exercise to satisfy external accounting requirements
rather than to meet internal information needs. Formalized planning systems within the Navy do not serve field activity planning needs. Field activity personnel seldom received information from higher levels which would allow for the type of planning desired. This lack of inputs was considered particularly acute with respect to facilities planning and manpower planning. Bilinear responsibility is a constraint to planning due to the lack of a single channel of authority and responsibility from which local managers receive workload and higher level planning information. Respondents perceived the net impact of having several funding sources from which funds were received as a mixed blessing. While these managers encouraged acceptance of projects from various sources, as a means of reducing the dependence on any single source, they were critical of the overall lack of direction and consistent information. Since future workload is at best uncertain as to source and quantity, no criteria is available for determining the need for long-range facilities, manpower, equipment or technological base. The findings of the study suggest that the concept, role, process and planning problems that exist within an industrialmilitary organization, including the mechanism for planning between the operating organization and the higher level parent organization and funding authorities, are in serious need of review.•
REFERENCES (1) Frederick C. Weston, Jr., Some Planning Problems in an Industrial-Military Organization. Paper presented at the 11 th American Meeting, The Institute of Management Sciences, Los Angeles, California, October 1970; and Planning in an IndustrialMilitary Organization: A Comprehensive Analysis and Examination (unpublished D.B.A. dissertation, Indiana University, 1969).
LONG RANGE PLANNING
Colorado State University, Fort Collins, Colorado
The problems of planning and managementin an Industrial-Military activitypresentparticularproblems. This article outlines a study into the operation of such a unit and highlightsthe absence ofprofit type criteria or any other form of quantativemeasure ofperformance. It also illustratesthe limitationsof the formalized planning systems whichexistin the environmentdescribed. The study findingssuggest the serious need for review of the mechanisms of planning between the operating organizations and higherlevel organizations.
W
ITHIN
THE
MILITARY
STRUCTURE,
there exist several organizations whose mission or function is output oriented. Organizations of this type may closely resemble industrial firms engaged in manufacturing. For definitional purposes, an 'industrial-military' organization is defined as an organization under military command that is engaged in industrial operations, that competes for and receives funding for project type work, and whose efficiency is measured by the ability to accomplish a specified mission at the lowest cost. In contrast to managers in business firms who focus on the selection and determination of goals and objectives, formulation of policy, the *Certain material within this paper is taken fully or in part from references (1). tThe author is an Associate Professor at the College of Business, Colorado State University.
58
planning process, and future profits and markets, managers within an industrialmilitary organization emphasize concepts of weapon systems planning and program management. The objective of this paper is to report some of the planning problems that exist within an industrial-military organization. The organization studied was a typical ammunition depot within the organizational responsibility of the Naval Ordnance Systems Command (NOSe). ·BACKGROUND It is important to establish at the outset
that there are unique differences within the planning literature with respect to several basic planning questions. Again, these differences largely stem from the orientation of the corporate planning literature versus that of the defense planning literature. Some of the basic planning topics in question form, affected by this difference in orientation, and with respect to an industrial-military organization, include: • What is planning? • Why is planning necessary? • What inputs are/should be a part of the local planning function? • What are the constraints to planning? • What areas of planning are/should be included within the planning function? • How should the planning function be organized? • What results are/should be expected from formalized planning?
• What type of planning process should be employed? • What is/should be the time span of planning? In conjunction with the above questions, 50 managers in four line or operating departments constituting three levels of organizational responsibility were asked several integrative questions pertaining to planning.t The results obtained are discussed within the sections that follow. Planning Problems Related to the Concept of Planning
Managers within the industrial-military organization studied perceived planning in a conceptual framework consistent with the current management literature. Higher level managers viewed planning more broadly than did lower level managers. However, the concept ofplanning perceived by most managers was clouded by a lack of planning on a total organizational basis. Eighty-four per cent of those managers interviewed felt that planning on a total organization basis was not a current reality. The strength of this feeling was directly proportional to the level of management. Fifty per cent of those managers interviewed felt that real goals and objectives were established for the organization while the remaining 50 per cent stated just the opposite. Some managers who stated that goals and. objectives did exist, stated that they were meaningless from an operational point of view. tEvery effort was made to insure that the sample selected would be representative of managers in similar industrial-military organizations.
LONG RANGE PLANNING
These results combined indicate that total organizational planning does not exist and that there does exist an absence of real goals and objectives to provide the basis for any realistic planning. This situation did influence managers as to how they perceived planning since some managers were totally unaware of the concept, purpose and benefit of total organizational planning and thus viewed planning in a narrow, personal context. Managers also were asked to respond to the impact of certain postulated variables to their perceived concept of planning. The variables considered were: EPF-the exclusion of a profit function or substitute criterion; CBP-the current budgeting process; NPS-formalized planning systems within the Navy; BLR-bilinear responsibility; WFS-the extent (number) of workload funding sources. Of these variables, WFS, the extent of workload funding sources, was considered to have the most impact on the perceived concept of planning. Managers responded that their concept of planning was strongly influenced by how the funding sources at the higher organizational levels viewed planning, including what planning would consist of. However, these same managers felt constrained since a lack of profit or an adequate substitute criterion negated a basis from which any planning effort could be evaluated. Planning Problems Related to the Need to Plan
Participants were queried about the need to plan within an industrial-military organization. Not one manager responded negatively when asked about the need to plan on a total organization basis. Some managers questioned what role with respect to planning an organization of the industrial-military type, considering its
low position within the total defense hierarchy, should play. Lower level managers often expressed confusion and concern as to the implications, problems, and even benefits of total planning. While higher level managers possessed a greater understanding of both the concept of planning and the need to plan, managers at all levels again felt that variable WFS has the most significant effect on the need to plan. To support this conclusion, several managers stated that operational funds are received from numerous sources, with timing and amounts uncertain, such that no overall direction exists (see Table 1). Many participants expressed the view that all the postulated variables have a positive effect on the need to plan since little information was obtained from the formalized planning systems such as the RDT&E Planning System, the Navy Planning and Programming System, and the Shore Facilities Planning System. In addition, Bilinear responsibility was perceived as an organizational problem that increased the need for total organizational planning. The reponse to the current budgeting system was similar to that of the formalized planning systemslittle information was received and this generated a positive need for planning. Planning Problems Related to the I nputs to the Planning Process
A major point made by several managers, with respect to the formalized planning systems, was that those responsible for the higher level planning systems were incapable of providing the operative, organization with the information needed for even a normal level of operation. Many managers felt that the nature of the business precluded anyone from predicting defense needs in general and ordnance needs in particular. Several made reference to the standard 'GIGO' cliche. Another planning problem emphasized by several participants was that one
Table 1. Responses Indicating the Variable Having the Most Significant Effect on the Need to Plan.
Variable
(%)
Branch Manager
EPF CBP NPS BLR WFS No Response
3 4 2 3 13 1
( ( ( ( ( (
Total
26
(100)
DECEMBER, 1973
12) 15) 8) 12) 50) 4)
Managerial Level Department (%) Director or (%) Division Assistant Manager
-
1
7 5 1 6
( 37) ( 26) ( 5) ( 32)
1 3 -
19
(100)
5
-
( 20) ( 20) ( 60)
(100)
Total
(%)
4 11 8 4 22 1
( 8) ( 22) ( 16) ( 8) ( 44) ( 2)
50
(100)
funding source may assign funds for work and yet be unable to authorize the billets (manpower) to perform the expected services. Managers commented also on the lack of planning assumptions, quantitative objectives, a single cource of planning information, and the absence of a longrange outlook. Consistent with these comments, 46 per cent cited the Navy Planning Systems and the variable NPS as having the most significant effect on the inputs to the planning process. Thirty per cent of the managers cited WFS. Thus, at the time of this study, and for the type of organization studied, it can be stated that planning systems within the Navy, as a whole, contribute at best marginally to the information received at the local activity level. Planning Problems Related to the Constraints to Planning
Many managers felt frustrated that they were constrained, that the existing planning systems were of marginal value locally, that little direction regarding the future was apparent, that more than one authority line existed, and that communications were not adequate. A general consensus was that 'real' planning (where control could be exerted) was limited to a single fiscal year. The effect of this was not knowing what or how to plan for future equipment, modernization of facilities, and the like. This was considered a major constraint. Several managers at all levels felt that the nature of ordnance defense planning was also a major constraint. Production, testing and evaluation of weapon system components, and even some aspects of research and development and weapons engineering, at this organizational level, often is done on a 'crash' basis. The demands of the war in South-East Asia, shifting priorities, and newly discovered problems or supply line deficiencies often account for these short lead times that are imposed by a higher level. All levels of managers were quick to criticize that allowances were not being made at higher organizational levels that the war would go on. This is evidenced by the fact that the Shore Facilities Planning System has a lead time of at least 3 to 4 years from the time a plan is offered to the time funds are received, if ever at all. Thus, all requests for funds must be labeled 'emergency' to receive any attention at all. Many managers were not even aware that this system existed. These managers considered this lack of information and communication to also be a major planning constraint. 59
Another 'constraint' pertained to both the extent of workload funding sources and bilinear responsibility. Many managers pointed out that work was being received by one funding source but the billets (manpower) to perform this work were often controlled by another source. This also was considered a major constraint by those interviewed. In fact, one source has billet control. However, much of the work performed is for funding sources other than the source possessing billet control. These sources had no authority to authorize billets, and the fact that field activities under the control of one parent organization were performing work for another parent organization (funding source), often led to controversy between the two. This situation was cited often when 'the extent of workload funding sources' (WFS) was stated as the variable most affecting the constraints to planning. Several managers cited additional constraints they felt existed. These constraints, cited less frequently than the major constraints immediately above were, in general, considered to be of a lesser nature. These are summarized briefly as follows: Endogenous Operational Constraints (1) Varying values placed on total organization planning by current and future commands. (2) Appropriate feedback for analytical comparisons of plans with performance. (3) Lack of worthwhile historical information of costs on major as well as minor projects/products. (4) Lack of workload priority determination, often resulting in slippage of work schedules and neglect of priority work. (5) The lack of a civilian liaison person to phase in and phase out both new and old Commanding and Executive Officers. (6) Internal civilian-military differences. (7) No single planning philosophy backed by either internal personnel or external authorities and funding sources. (8) No forecasts or even attempts at forecasting. Exogenous Operational Constraints (1) The inability of funding sources to communicate with each other. (2) Inability to hire and fire civil service personnel as needs dictate. (3) Lead time in contracting, often resulting in not having suitable materials when needed. 60
Planning Problems Related to the Areas of Planning
(4) The necessity of acqumng needed equipment from project funds when specific allocations for this same equipment may not have been made. (5) Implication that an 'ammunition depot' is restricted to ordnance related production, R&D, engineering and testing.
The two areas of planning that were indicated as most important to line managers were manpower planning and facilities planning (see Table 2). Another conclusion derived from Table 2 is the lack of stress placed on market planning (seven
Table 2. Responses Indicating the Most Important Areas of Planning (participants were asked to make two choices).
Managerial Level Area of Planning
Manpower Planning Facilities (capacity) Planning Financial Planning (other than budgeting) Scheduling Finished Output Budgeting Market Planning Organization Planning Process Planning Quality Level Planning Product Planning Maintenance Planning Total
Department Director or (%) Assistant
Branch Manager
(%)
Division Manager
(%)
13 14
( 25) ( 27)
14 7
( 37) ( 18)
2 3
( 20) ( 30)
29 24
6 4 5 3 3 1 2
( 12) ( 8) ( 10) ( 6) ( 6) ( 2) ( 4)
( (
1 1
( 10) ( 10)
1
(
2)
2 3 3 3 2 2 1 1 -
9 8 8 7 5 4 3 2 1
(100)
38
-
52
(6) Inability to compete with private industry for needed skills with regard to salaries. Exogenous Planning and Information Constraints (1) The congressional system of annual appropriations. (2) Uncertainty as to who future customers will be or type of work to be performed; corresponding problems of facilities, tooling and equipment. (3) Uncertainty as to what future weapons and weapon systems will require in ordnance support. (4) Lack of access to higher level planning documents. Three variables, NPS, BLR and WFS, were cited with almost equal frequency as having the most effect on the constraints to planning that exist. The number of funding sources discourages overall consistency of information and guidance. Bilinear responsibility compounds the funding source problem in that all levels of managers receive information from a multitude of sources. The formalized planning systems were, for the most part, at the time of this study, meaningless as a planning instrument at the local level for the type of information desired.
5) 8) 8) 8) 5) 5) 3) 3)
1 1 1 -
( 10)
(100)
10
(100)
(
(
( ( (
(
( 10) ( 10)
Total
100
out of a possible 50 respondents) and financial planning other than budgeting (nine out of a possible 50 respondents). This low level of response in these two areas is a direct result of the nature of an industrial-military organization-military, with aggregate planning and workload decisions often performed externally. Individual managers within the local level organization are interested in aggregate planning, as is evidenced by the stress given facilities planning. However, coordination, emphasis and direction, internal and external, is apparently lacking. Each participant also was asked to identify the area of planning that currently receives the greatest current emphasis. Each participant could use the list of areas of planning (provided by the author) for this question if he so chose. A majority ranked budgeting first and manpower planning second. Facilities planning, previously indicated by 24 participants as most important, accounted for only five responses. The point was made again by several managers that budgeting was stressed, but that the organization and perceived purpose of the local budgeting process apparently was not intended for line department use. Thus there was a difference in the areas of planning that were perceived as most important and the areas that were most heavily emphasized. The difference was due to the fact that LONG RANGE PLANNING
managers felt that the areas emphasized, budgeting in particular was intended for external accounting purposes and not for internal control and planning purposes. Finally, variable WFS (the extent of workload funding sources) appears to have the most impact on the areas of planning at the local activity level. This result was attributed to lack of direction from funding sources as to what area should be emphasized at the local level. Planning Problems Related to the Organization of the Planning Function
.Most managers concurred in principle WIth the current scheme of organizing the planning function as a staff function to the Co.mmanding Officer. Several participants p010ted out that since Command is often thought not to be in tune with the departments, the planning group should be responsive to the line departments. ~everal suggested that the planning group, 10 fact, could only function in an advisory ~ol~ ?y coordinating the planning of the ~ndlvldu~l departments and summarizing 10putS 1OtO an aggregate plan. While managers did expect to engage in planning on a departmental basis, the point also was expressed that unless some coordination and guidance emanated from a single source, planning would be independent both of Command and the other departments. Another question pertains to whether the planning staff or the line departments should engage in planning. The answer was paradoxical. Some, particularly lower level managers, felt that the planning staff ~hould perform the actual planning only If proper guidelines, backing and direction were issued by Command to the planning staff. On the other hand, these managers felt that the role of the depart~e~ts w.as that of doing the actual planning If dIrectIOn was lacking. In this latter case the planning staff could only coordinat~ and summarize. A major reservation to centralized planning felt by some managers was the possibility that planning personnel would ~e unfamiliar with departmental operatIOns. It was felt that, if this did occur planning would be unresponsive t~ departmental desires and that cooperation (and thus communication) would ebb to the poi?t of marginal results. This feeling was qUIte strong at all managerial levels within the line departments. Rapport was felt to be necessary to keep the planning staff 'from going off into left field,' as was stated by one department director. The general consensus was that both the planning staff and the departments need to DECEMBER, 1973
develop a sense of mutual trust and understanding. No organizational relationships would work without this type of working relationship. The variable seen as most influencing the appr~ach to organizing the planning functIon was NPS (Navy Planning Systems). Though many managers had expressed a lack of knowledge of the formalized planning systems within the Navy, NPS was chosen as the variable that should exert the most influence on the form of organization locally. Planning Problems Related to the Expected Results from Formalized Planning
An attempt was made to ascertain what results from planning were expected. The response from all levels of management was that goals and objectives were expected, that workload priorities would be established, and that some indication wo~ld be given as to whether the organizatIon would remain ordnance-oriented including whether activities and service~ would expand. Department directors doubted that planning would bring worthwhile results. This conclusion by these managers was based on the present system where goals an~ objectives were missing, direction and gUldance was absent, and desired information from higher level planning systems did not. ~l~er down to the field activity lev~l. DIVISIon managers were quite evenly spht as to whether or not positive results could occur. Branch managers, on the whole, were more optimistic than both division managers or department directors. Each participant was queried as to what problems he thought would be encountered in any attempt to establish formal planning. The problems mentioned most often were: • Personnel; • Communication; • Rapidity with which the defense picture can change; • Gaining and maintaining departmental support; • Staff-line problems; • Obtaining needed information (external and internal); • Selling the need for planning flexibility; • Higher level recognition and support; • Establishing work priorities goals and objectives. ' Variable NPS was indicated as the variable, of those postulated, having the greatest positive influence on the results expected from formalized planning. The
response to NPS is a most unusual result l.ight of the fact that several managers mdlcated they were not familiar with or only marginally familiar with, these for~al systems. Thus, it must be interpreted that the participants who indicated NPS to this question were again answering what should have the most effect on the expected results. Investigation resulted in the conclusion by the author that this premise was correct. ~n
Planning Problems Related to the Planning Method·
There was consistent agreement among all three levels of management that the planning method, whatever it is to consist of, must be continuous and include both short-range and long-range planning. Managers perceived the need to consider almost separately but yet continuously: the shorter range dynamic changes associated with the type of business engaged in and also the longer range trendproducing factors. There was a consensus that the form and content of any planning process should be the responsibility of the planning staff. The planning staff, as a staff function, has no line responsibility; thus it was felt that ~~s group should assume the responsib~lity o.f preparing. guidance to planning mcluding overall dlfection. Variable NPS (Navy Planning Systems) was cited, as having the most effect on the form of planning process employed, with the frequency of response increasing with managerial level. The fact that several of the participants were not aware of these formalized planning systems or did not feel they were receiving the benefit of them, to these managers, apparently is irrelevant. Based on follow-up questions asked of several of the participants, the author must conclude that the responses indicate this variable should have the most effect on the form and content of the planning process adopted, believing that any such process should be compatible with higher level systems. Those managers who did not advocate compatibility of higher and lower level planning systems pointed out that little is being gained from the higher level systems. Variables CBP and WFS were responded to nearly as often as NPS as variables having the most significant effect on the appropriate method of planning. Managers who responded to CBP held the view that
*In the specific organization being studied, a planning process had been proposed to Command and the four line departments prior to this questioning.
61
the budgeting process was not functioning properly in a current context, and would need to be adjusted, modified or adapted in order to obtain the necessary shortrange operational type information desired. These managers also considered the budgeting process as having considerable impact on the manner in which long-range financial information was injected into the planning process. Those that responded to WFS adopted the viewpoint that since funds are obtained from several sources, any planning system must be responsive to the reporting requirements of these sources and yet flexible enough for local use. Planning Problems Related to the Time Span of Planning
Four out of five department directors or their assistants stated that the time horizon for an industrial-military organization of the type defined should be 5 years. The remaining director stated that a 3-year time period should be in effect. A 5-year idealistic time horizon was also the general feeling of both division managers and branch managers. A few instances existed where a division or branch manager would state a 1- or 2-year limit because of apparent budgetary limitations. Longer periods of time, such as 10 years, also were stated occasionally. Here the thinking was often in terms of planning for a time horizon consistent with the next two or three Commanding Officers. Several managers prefaced their time estimates based on short and long-range planning considerations. Still, as-year period was considered both appropriate and adequate. This 5-year period is most consistent with current planning literature pertaining to the private industry sector and also various elements of the Department of Defense planning scheme such as the Five-Year Defense Plan (FYDP). While these same managers felt that 5 years was appropriate for planning
62
purposes, very few felt that this time period was in fact realistic. The maximum realistic limit offered by any of the five department directors was 2 years. Several division and branch managers stated that the fiscal year served as an effective upper limit. This result illustrates quite clearly that managers feel very positive about the need to plan for a time period greater than that perceived to be actually feasible with any degree of worth or success. This is a restatement of the feeling by these managers that the type of business engaged in, and the apparent lack of information, flexibility, and overall direction, constrain the time span of planning. Overall, brush-fire or limited wars of the future, coupled with higher level planning system requirements and expectations, were seen as having the overriding influence on establishing a time horizon for planning at the field activity level. Consistent with this observation, managers chose NPS as the variable having the most effect on the time span of planning. Here again, the interpretation is that NPS was perceived as the variable that should ha~'e the most effect on the time horizon of planning. SUMMARY
At the time of this study, a profit type criteria was absent in the industrialmilitary form of organization, including any other quantitative measure of performance and operating efficiency. Many managers cited the need for a profitlike criteria. Several also felt that not having such a criteria was a constraint to planning of such magnitude to prevent, on its own, positive planning results. The current budgeting process at the field activity level does not serve local needs. In the opinion of those managers interviewed, the budgeting function was considered ineffective for planning purposes and is deemed an exercise to satisfy external accounting requirements
rather than to meet internal information needs. Formalized planning systems within the Navy do not serve field activity planning needs. Field activity personnel seldom received information from higher levels which would allow for the type of planning desired. This lack of inputs was considered particularly acute with respect to facilities planning and manpower planning. Bilinear responsibility is a constraint to planning due to the lack of a single channel of authority and responsibility from which local managers receive workload and higher level planning information. Respondents perceived the net impact of having several funding sources from which funds were received as a mixed blessing. While these managers encouraged acceptance of projects from various sources, as a means of reducing the dependence on any single source, they were critical of the overall lack of direction and consistent information. Since future workload is at best uncertain as to source and quantity, no criteria is available for determining the need for long-range facilities, manpower, equipment or technological base. The findings of the study suggest that the concept, role, process and planning problems that exist within an industrialmilitary organization, including the mechanism for planning between the operating organization and the higher level parent organization and funding authorities, are in serious need of review.•
REFERENCES (1) Frederick C. Weston, Jr., Some Planning Problems in an Industrial-Military Organization. Paper presented at the 11 th American Meeting, The Institute of Management Sciences, Los Angeles, California, October 1970; and Planning in an IndustrialMilitary Organization: A Comprehensive Analysis and Examination (unpublished D.B.A. dissertation, Indiana University, 1969).
LONG RANGE PLANNING