The integrative role of planning in differentiated organizations

Abstract

Using a five-cluster analysis it is found that organizations tend to require different internal structural characteristics which may be portrayed along a continuum. This represents young, small, simple organizations at the one end and older, large, complex organizations, at the other end of the continuum. As the size and complexity of organizations increase, their characteristics change so as to meet their more complex differentiative or integrative needs. In addition to changing the characteristics of the internal decision structure along the continuum to achieve integration, it is found that organizations also increase their involvement in planning as their size and complexity increase. With the aid of an environmental cluster analysis it is also observed that organizations which operate in increasingly complex operational environments tend to increase their degree of involvement in corporate planning.
It is possible to conclude with confidence that the greater the differentiation and environmental uncertainty caused by growth, diversification and organizational complexity, the greater become the integrative needs provided by the range of facilities of corporate planning. The survey results reveal a facet previously ignored in the classic concept of corporate planning. While environmental uncertainty does play a part in determining the degree of an organization's involvement in the corporate planning process, the complexity of the organization itself plays a stronger and more dominant role in dictating the degree of involvement. In the South African context, planning is primarily a powerful internal integrator of complex organizations, and only secondarily, a management technique for coping with uncertain future business environments.