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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 an 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 coordination, reporting, and budgeting, and hence the controlling function can be broken into these three separate functions. Based upon these seven functions, Luther Gulick 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.
Five Functions of Management
1. 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 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.
See also Advantages and Disadvantages of Management by Objectives (MBO)
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 the workforce, more complex organizational structures, decentralization, etc
2. Organizing
Organizing requires a formal structure of authority and the direction and flow of such authority through which work subdivisions are defined, arranged and coordinated 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:
- Identifying the tasks that must be performed and grouping them whenever necessary
- Assigning these tasks to the personnel while defining their authority and responsibility.
- Delegating this authority to these employees
- Establishing a relationship between authority and responsibility
- Coordinating these activities
See also Management as a Science
3. 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’Donnell, “Managerial function of staffing involves manning the organization structure through the 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.
4. 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.
See also Features, Importance and Limitations of Planning
5. Controlling
The function of control consists of those activities that are undertaken to ensure that the events do not deviate from the pre-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’Donnell, “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.
Functions of Management
Management is the process of directing resources in an efficient and effective manner towards the accomplishment of the organizational objectives. It is described as a social process involving responsibility for economical and effective planning and regulation of operation of the organization for the fulfilment of the 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.
Various management experts have defined management. Some of the definitions of these experts are given below.
- “Management is the development of people and not the direction of things. Management is the personnel administration.” – Lawrence A. Apply
- “The art of getting things done through people”- Marry Parker Follet
- “Management is the art of getting things done through and with the people in formally organised groups.” – Horold Kanontz
- “To manage is to forecast and plan, to organise, to command, to co-ordinate and to control.” – Henry Fayol
- “Management is a distinct process consisting of planning, organising, activating and controlling to determine and accomplish the objectives by the use of people and resources.” – G.R. Terry
- “Management is simply the process of decision making and control over the action of human beings for the express purpose of attaining pre-determined goals.” – Stanley Vance
Activity of the management is carried out for fulfilling its responsibilities for achievement of the organizational objectives by pursuing different functions of the management. Different management experts have broken down, listed and explained these functions. The number of broken down functions by different management experts varies. Some have listed four, some have listed five and some even more than five. However the basic functions are five (Fig 1) namely (i) planning, (ii) organizing, (iii) directing, (iv) coordinating, and (v) controlling. This breakdown is being accepted by most of the management experts and originally this was listed by Henry Fayol. However he used the word ‘command’ in place of ‘directing’. These five functions are described below.
Fig 1 Basic functions of management
Planning
Planning is a basic and the primary function of management which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. It is a dynamic process and very essential for every organisation to achieve their ultimate goals.
Planning is the starting point of the whole management process and occupies the first position in the management process. It involves defining a goal and determining the most effective course of action needed to reach that goal.
Planning is looking ahead. Drawing up a good plan of action is the hardest of the five functions of the management. This requires an active participation of the entire organization. With respect to time and implementation, planning is to be linked to and coordinated on different levels. Planning is to take the organization’s available resources and flexibility of personnel into consideration to guarantee continuity and to get effective co-ordination, contribution and perfect adjustment.
Through this function, management looks ahead and chalks out future course of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. By Planning usually a detailed programme is made regarding future courses of action.
Planning is a way to do the things in orderly way, to think before acting and to act in the light of facts rather than guesses. It is deciding of the best alternative among others to perform different managerial functions in order to achieve predetermined goals. It makes possible things to occur which would not otherwise occur.
The planning function of the management controls all the planning that allows the organization to run smoothly. It also involves knowledge of the organizational resources and the future objectives of the organization.
Organizing
An organization can only function well if it is well-organized. This means that there must be sufficient capital, staff and raw materials so that the organization can run smoothly and that it can build a good working structure. The organizational structure with a good division of functions and tasks is of crucial importance. Organizing function is an important function of the five functions of the management.
Organizing is the function of management which follows planning. It is a function by which the management is able to define the role positions, the jobs related and the co-ordination between authority and responsibility. It is a function in which the synchronization and combination of human, physical and financial resources takes place. All the three resources are important to get results. Organizing function helps in achievement of results which in fact is important for the organization.
The organizing function leads the management towards the systematic and proper organization of its activities. Organization is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently.
Organizing function is effective only if the management follows the guiding principles in order to make important decisions and act upon them.
The organizing function of leadership controls the overall structure of the organization. The organizational structure is the foundation in the organization. Without it the day-to-day activities of the organization becomes difficult and unsuccessful. Organizing involves designating tasks and responsibilities to employees with the specific skill sets needed to complete the tasks. Organizing also involves developing the organizational structure and chain of command within the organization.
Directing
Directing function is a key management function which actuates the organizational methods to work efficiently for achievement of organizational objectives. It is considered life-spark of the organization which sets in motion the action of the employees because planning and organizing are the mere preparations for doing the work.
Directing includes all those activities which are designed to encourage the employees to work effectively and efficiently. It consists of process or technique by which instructions are issued and operations are carried out as originally planned. It is that inert-personnel aspect of management function which deals directly with influencing, guiding, instructing, supervising, and motivating employees for the achievement of organizational goals.
Directing is said to be the heart of management process. Planning, and organizing have got no importance if directing function is not there in the organization.
Directing function has four important elements namely (i) supervision, (ii) motivation, (iii) leadership, and (iv) communication. Through this function, the management instructs, guides and oversees the performance of the employees to achieve the predetermined goals.
Through the directing function, management initiates action and it is from here that the actual work starts. Directing includes human factors in it. In simple words, it can be described as providing guidance to the employees in doing their work.
Directing function helps the organization since through this function management gives orders and clear working instructions to the employees so that they know exactly what is expected from them. Return from all employees are optimized if they are given concrete instructions with respect to the activities that must be carried out by them.
Directing function helps management to communicate clearly with the employees and helps in motivating and encouraging them perform.
Directing is always a complicated function since it involves dealing with employees of different kind. Management needs basic skills and practices for achieving success in the function of directing. Proper implementation of this function ensures the employees work effectively and efficiently and in turn helps the organization to achieve its goals.
Coordinating
Coordinating function of the management ensures unification, integration, synchronization of the efforts of the organizational employees so as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other functions of management. It is an orderly arrangement of employee’s efforts to provide unity of action. It is the integration of several parts into an orderly whole to achieve the purpose of understanding.
Management through coordinating function achieves harmony, rhythm and unity in the individual’s efforts for the achievement of organizational goals and this is a key to the organizational success. Coordinating function is the essence of the management and is implicit and inherent in all other functions of the management.
When all activities are harmonized, the organization will function better. Positive influencing of employees’ behaviour is important in this. Coordinating function therefore aims at stimulating motivation and discipline within the group dynamics. This requires clear communication and good leadership. Only through positive employee behaviour management, the intended objectives can be achieved.
The coordinating function of management controls all the organizing, planning and directing activities of the organization and ensures that all the activities function together for the good of the organization. Coordinating typically takes place in meetings and other sessions with the department heads to ensure all departments are on the same wave length in terms of objectives and goals. The function of coordinating involves communication, supervision and direction by management.
The function of coordinating always applies to group efforts. There is no need for coordination when only single individual is working. The need for orderliness, integration arises only when more individuals are working as different individuals come from different backgrounds, have different styles of working so there is need to unify their efforts towards the common direction.
The function of coordinating always emphasises on unifying the efforts of different individuals because conflicting efforts may cause damage to the organization. The main aim of the management is to coordinate the activities and functions of all individuals to common goal.
Coordinating is a non-ending function. It is a continuous function although its degree may vary. The management work continuously to achieve coordination because without coordination the organization cannot function efficiently.
Coordinating is a universal function; it is required at all the levels, in all the departments and to perform all the functions due to interdependence of various activities on each other.
Coordinating function is a function of the management which is to be practiced by employees working at different levels. It is needed for the coordination of the activities of the organization.
Through the function of coordinating, the activities of organization avoid confusion and chaos. It brings unity and integrity to the actions of individuals in the organization and that is why it is usually the most deliberately performed function of the management.
Controlling
Controlling function of the management consists of seeing that everything is being carried out in accordance with the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from recurring. Through this function management checks current performance against pre-determined standards contained in the plans, with a view to ensure adequate progress and satisfactory performance. Management also ensures by controlling that the organizational objectives and the plans devised to attain them are accomplished.
Controlling function is a systematic exercise that helps the management to adjust operations as needed in order to achieve the plan, or to maintain variations in the organizational objectives within allowable limits. It ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling function measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions
Controlling function takes place in a four-step process namely (i) establishment of the performance standards based on organizational objectives, (ii) measurement and reporting of the actual performance, (iii) comparison of the results with performance and standards, and (iv) taking of the corrective or preventive measures as needed. Each of these steps is about solving problems in a creative manner.
Controlling, is one of the important managerial functions since it helps to check the errors and to take the corrective actions so that deviations from standards are minimized and stated goals of the organization are achieved in a desired manner.