Some Problems in the Organization of Planning in Multidivisional Organizations: The Tennessee Valley as a Case Illustration

Davies, C. (1976). Some Problems in the Organization of Planning in Multidivisional Organizations: The Tennessee Valley as a Case Illustration. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-76-026

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Abstract

This paper is concerned with the organization of planning activities in large organization. Planning is an essential activity that must be carried out by all organizations if they are to continue to exist in the real, unstatic world. However, the organization of planning may take many different forms, from the use of large centralized planning units to a largely informal, unspecialized activity carried out at many organizational levels.

The main thesis of this paper is that there exist particular definable and qualitatively measurable factors that determine in any particular case the organization of planning that will be most suitable. The center of interest here is on problems which are peculiar to divisionalized structures, in which each division has a planning function which feeds into a planning function for the corporate whole. It is hypothesized that where the situations facing each of the divisions would lead naturally to the adoption of different forms of planning, pressures exist forcing them towards similar forms. In this circumstance one or more of the divisions will find itself with a poorly adapted system. At the corporate level difficult trade-offs will need to be made between maladaptation in one part of the organization as against some other part.

Much of the paper is concerned with discussion of a theoretical nature characterizing different ways of organizing planning and the factors determining the suitability of one mode rather than another. However, the ideas are tested against the experiences gained from study of the Tennessee Valley Authority. The field work on the TVA was carried out by a team of IIASA scientists during 1975. The study was a wide ranging one covering management practices, strategy formulation, planning, use of models, environmental management and organization structure. The information used here draws especially on the findings of study related to organization structure and planning.

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