Functions
of Management
Management in
some form or another is an integral part of living and is essential wherever
human efforts are to be undertaken to achieve desired objectives. The basic
ingredients of management are always at play, whether we manage our lives or
business. Management is a set of principles relating to the functions of
planning, organizing, directing, and controlling, and the applications of these
principles in harnessing physical, financial, human and informational resources
efficiently and effectively to achieve organizational goals.
Management is essential for organized life and
necessary to run all types of organizations. Managing life means getting things
done to achieve life’s objectives and managing an organization means getting things
done with and through other people to achieve its objectives.
There are basically five
primary functions of management. These are:
1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling
The controlling function comprises
co-ordination, reporting and budgeting, and hence the controlling function can
be broken into these three separate functions. Based upon these seven
functions, Luther Guelick coined the word POSDCORB, which
generally represents the initials of these seven functions i.e. P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for
Co-ordination, R for reporting & B for Budgeting.
But, Planning, Organizing, Staffing,
Directing and Controlling are
widely recognized functions of management.
Planning
Planning is future oriented and determines an organization’s
direction. It is a rational and systematic way of making decisions today that
will affect the future of the company. It is a kind of organized foresight as
well as corrective hindsight. It involves the predicting of the future as well
as attempting to control the events. It involves the ability to foresee the
effects of current actions in the long run in the future.
Peter Drucker has defined planning as follows:
“Planning is the continuous process of making
present entrepreneurial decisions systematically and with best possible
knowledge of their futurity, organizing systematically the efforts needed to
carry out these decisions and measuring the results of these decisions against
the expectations through organized and systematic feedback”.
An effective planning program incorporates the effect of both
external as well as internal factors. The external factors are shortages of
resources; both capital and material, general economic trend as far as interest
rates and inflation are concerned, dynamic technological advancements,
increased governmental regulation regarding community interests, unstable
international political environments, etc.
The internal factors that affect planning are
limited growth opportunities due to saturation requiring diversification,
changing patterns of work force, more complex organizational structures,
decentralization etc
Organizing
Organizing requires a formal structure of
authority and the direction and flow of such authority through which work
subdivisions are defined, arranged and co-ordinated so that each part relates
to the other part in a united and coherent manner so as to attain the
prescribed objectives.
According to Henry Fayol, “To organize a business is to provide it with everything useful or
its functioning i.e. raw material, tools, capital and personnel’s”.
Thus the function of organizing involves the
determination of activities that need to be done in order to reach the company
goals, assigning these activities to the proper personnel, and delegating the
necessary authority to carry out these activities in a coordinated and cohesive
manner. It follows, therefore, that the function of organizing is concerned
with:
1. Identifying the tasks
that must be performed and grouping them whenever necessary
2. Assigning these tasks
to the personnel while defining their authority and responsibility.
3. Delegating this
authority to these employees
4. Establishing a
relationship between authority and responsibility
5. Coordinating these
activities
Staffing
Staffing is the function of hiring and
retaining a suitable work-force for the enterprise both at managerial as well
as non-managerial levels. It involves the process of recruiting, training,
developing, compensating and evaluating employees, and maintaining this
workforce with proper incentives and motivations. Since the human element is
the most vital factor in the process of management, it is important to recruit
the right personnel.
According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization
structure through proper and effective selection, appraisal & development
of personnel to fill the roles designed in the structure”.
This function is even more critically
important since people differ in their intelligence, knowledge, skills,
experience, physical condition, age and attitudes, and this complicates the
function. Hence, management must understand, in addition to the technical and
operational competence, the sociological and psychological structure of the
workforce.
Directing
The directing function is concerned with leadership, communication, motivation and supervision so that the employees
perform their activities in the most efficient manner possible, in order to
achieve the desired goals.
The leadership element
involves issuing of instructions and guiding the subordinates about procedures
and methods.
The communication must be open both ways so that the
information can be passed on to the subordinates and the feedback received from
them.
Motivation is
very important, since highly motivated people show excellent performance with
less direction from superiors.
Supervising subordinates would lead to continuous
progress reports as well as assure the superiors that the directions are being
properly carried out.
Controlling
The function of control consists of those
activities that are undertaken to ensure that the events do not deviate from
the per-arranged plans. The activities consist of establishing standards for
work performance, measuring performance and comparing it to these set standards
and taking corrective actions as and when needed, to correct any deviations.
According to Koontz & O’Donell, “Controlling is the measurement & correction of performance
activities of subordinates in order to make sure that the enterprise objectives
and plans desired to obtain them as being accomplished”.
The controlling function involves:
a.Establishment of standard performance.
b.Measurement of actual performance.
c.Measuring actual performance with the
pre-determined standard and finding out the deviations.
d.Taking corrective action.
All these five functions of management are
closely interrelated. However, these functions are highly indistinguishable and
virtually unrecognizable on the job. It is necessary, though, to put each function
separately into focus and deal with it.
