POSDCORB is an acronym which means Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting which was first coined in a paper on administrative management that was written for the Brownlow Committee by Luther Gulick and Lyndall Urwick. POSDCORB can be used as a systematic framework for efficiently executing business processes in a company or by an individual.
Gulick’s “Notes on the Theory of Organization” further defines the patterns of POSDCORB. That document explains how portions of an executive’s workload may be delegated, and that some of the elements can be organized as subdivisions of the executive depending on the size and complexity of the enterprise.
Under Organizing, Gulick emphasized the division and specialization of labor in a manner that would increase efficiency. Yet Gulick observed that there were limitations. Based on his practical experience, he carefully articulated the many factors.
Gulick described how the organization of workers could be done in four ways. According to him, these are related and may be multi-level. Specifically, they are:
- By the purpose the workers are serving, such as furnishing water, providing education, or controlling crime. Gulick lists these in his organizational tables as vertical organizations.
- By the process the workers are using, such as engineering, doctoring, lawyering, or statistics. Gulick lists these in his organizational tables as horizontal organizations.
- By the clientele or material: the persons or things being dealt with, such as immigrants, veterans, forests, mines, or parks in government; or such as a department store’s furniture department, clothing department, hardware department, or shoe department in the private sector.
- By the place where the workers do their work.
Gulick stresses how these modes of organization often cross, forming interrelated structures. Organizations like schools may include workers and professionals not in the field of education such as nurses. How they are combined or carefully aggregated into a school — or a school system — is of concern. But the early work of Gulick was not limited to small organizations. He started off his professional career at New York City’s Bureau of Municipal Research and advanced to President Franklin D. Roosevelt’s Committee on Administrative Management.
Under Coordination, Gulick notes that two methods can be used to achieve coordination of divided labor. The first is by organization, or placing workers under managers who coordinate their efforts. The second is by dominance of an idea, where a clear idea of what needs to be done is developed in each worker, and each worker fits their work to the needs of the whole. Gulick notes that these two ideas are not mutually exclusive, and that most enterprises function best when both are utilized.
Gulick notes that any manager will have a finite amount of time and energy, and discusses span of control under coordination. Drawing from the work of Henri Fayol, Gulick notes that the number of subordinates that can be handled under any single manager will depend on factors such as organizational stability and the specialization of the subordinates. Gulick stops short of giving a definite number of subordinates that any one manager can control, but authors such as Sir Ian Hamilton and Lyndall Urwick have settled on numbers between three and six. Span of control was later expanded upon and defended in depth by Lyndall Urwick in his 1956 piece The Manager’s Span of Control.
Under coordination, as well as organization, Gulick emphasizes the theory of unity of command: that each worker should only have one direct superior so as to avoid confusion and inefficiency. Gulick discusses the concept of a holding company which may perform limited coordinating, planning, or budgeting functions. Subsidiary entities may carry out their work with autonomy, but as the holding company allows, based upon their authority and direction.
Importance of POSDCORB
Every business needs to have systematic framework in ensuring there is maximum output, minimum wastage and higher margins. POSDCORB is one such method in management where workforce and employees can be managed in a way which would be beneficial for a company. This concept helps organizations to break down the work into multiple processes and help in getting maximum value out to each employee. These steps and stages of POSDCORB help the HR team to deliver to the needs of a company.
Example of POSDCORB
Consider a multinational starting an exercise involving a good number of employees in the workforce. As per POSDCORB, the planning stage would be doing the thorough research about the number of people needed, team size, work type etc. Organizing and staffing stages would be the HR department making a list of people i.e. supervisors and subordinates who would could execute this role. One this is done, as per POSDCORB directing would be giving instructions and ensuring implementation of the plan as per the requirement. To ensure a better two way communication, coordinating plays a pivotal role. Once all this done, the different ways of reporting are done which ensures accountability and responsibility of the team. Finally, the budget to be allocated is studied. In this way, POSDCORB can be used for better management.
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