MANAGEMENT FUNCTIONS

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 has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given purposes.
It is a dynamic process consisting of various elements and activities. These activities are different
from operative functions like marketing, finance, purchase etc. Rather these activities are common
to each and every manger irrespective of his level or status.

Why Is Management Important?

All organizations rely upon group efforts to achieve goals. And whenever two or more people are
required to work together, management is necessary. According to the U.S. Bureau of Labor
Statistics, management positions are projected to continue to grow by an average of 7% percent. If
that is not enough reason to become a believer in management, maybe the reasons below will:

 Accomplish goals – It is possible to accomplish goals without management, but it would

be extremely difficult. With proper management, an organization is allowed to plan and
balance their resources in such a way that every task is completed. This does not only
relate to businesses, but it also applies to our lives.
 Be more efficient – There are only so many hours in a work day, so it beneficial to make
the most of it. The last thing a company wants its employees to do is to waste time. With
good time management skills, companies are able to get as much work done as possible
with the time given to them.
 Make better decisions – The choices a business makes can make the difference between
being successful to being a complete disaster. Therefore, making rational decisions is vital
for a company if they want to do well. With good time management, they will have more
time to weigh out the positives from the negatives in their decision making.
 Earn more profit – When all of the other benefits mentioned above are met, it will usually
equal to an increase of profit for the company. The most successful and profitable
businesses in the world attribute a lot of it to their management skills

Different experts have classified functions of management.

According to George & Jerry, “There are four fundamental functions of management i.e. planning,
organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”.
Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for
Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for
Budgeting.

But the most widely accepted are functions of management given by KOONTZ and O’DONNEL
i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each function
blends into the other & each affects the performance of others.

1. Planning

It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-determined
goals.

According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do.
It bridges the gap from where we are & where we want to be”.

A plan is a future course of actions. It is an exercise in problem solving & decision making.

Planning is determination of courses of action to achieve desired goals. Thus, planning is a

systematic thinking about ways & means for accomplishment of pre-determined goals. Planning
is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

In the planning stage, managers establish organizational goals and create a course of action to
achieve them. During the planning phase, management makes strategic decisions to set a direction
for the organization. Managers can brainstorm different alternatives to achieve the objective before
choosing the best course of action. While planning, managers typically conduct an in-depth
analysis of the organization’s current state of affairs, taking into consideration its vision and
mission and evaluating what resources are available to meet organizational objectives.

While planning, managers usually evaluate internal and external factors that may affect the
execution of the plan, such as economic growth, customers and competitors. They also establish a
realistic timeline for achieving the goal or goals based on the organization’s available finances,
personnel and resources. Managers may have to take additional steps, such as seeking approval
from other departments, executives or their board of directors before proceeding with the plan.

There are several approaches to planning:

 Strategic planning: This type of planning is often carried out by an organization’s top
management and usually creates goals for the entire organization. It analyzes threats to the
organization, evaluates the organization’s strengths and weaknesses and creates a plan of
 how the organization can best compete in its environment. Strategic planning usually has
a long timeframe of three years or more.
 Tactical planning: Tactical planning is the shorter-term planning of an objective that will
take a year or less to achieve. It is usually carried out by an organization’s middle
management. Tactical planning is usually aimed at a specific area or department of the
organization such as its facilities, production, finance, marketing or personnel.
 Operational planning: Operational planning is the process of using tactical planning to
achieve strategic planning and goals. Operational planning creates a timeframe for putting
a portion of the strategic goal into practice operationally.

2. Organizing

It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals.

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”.

The purpose of organizing is to distribute the resources and delegate tasks to personnel to achieve
the goals established in the planning stage. Managers may need to work with other departments of
the organization, such as finance and human resources, to organize the budget and staffing. During
the organizing stage, managers strive to create a work environment conducive to productivity.
Managers typically take employees’ motivation and aptitude into account to match employees with
roles and tasks that best fit their abilities.

When assigning team member roles, managers should explain and ensure that employees
understand their individual duties. To help employees feel engaged and productive, managers
should ensure that employees are assigned an appropriate amount of work and an appropriate
amount of time to complete their work.

To organize a business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc.

The main purpose of staffing is to put right man/woman on right job i.e. square pegs in
square holes and round pegs in round holes.

According to Koontz & 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 un the structure”. Staffing involves:

 Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.

4. Directing

It is that part of managerial function which actuates the organizational methods to work efficiently
for achievement of organizational purposes.

It is considered life-spark of the enterprise which sets it in motion and action of people, because
planning, organizing and staffing are the mere preparations for doing the work.

Direction is that inter-personnel aspect of management which deals directly with influencing,
guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:
  Supervision
 Motivation
 Leadership
 Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person
to another. It is a bridge of understanding

5. Controlling

Controlling is the process of evaluating the execution of the plan and making adjustments to ensure
that the organizational goal is achieved. During the controlling stage, managers perform tasks such
as training employees as necessary and managing deadlines. Managers monitor employees and
evaluate the quality of their work. They can conduct performance appraisals and give employees
feedback, providing positive remarks on what they are doing well and suggestions for
improvement. They may also offer pay raise incentives to high-performing employees. It implies
measurement of accomplishment against the standards and correction of deviation if any to ensure
achievement of organizational goals.

The purpose of controlling is to ensure that everything occurs in conformities with the standards.
An efficient system of control helps to predict deviations before they actually occur. According
to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being
made towards the objectives and goals and acting if necessary, to correct any deviation”.

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”. Therefore, controlling has following steps:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d. Corrective action.