This lecture provides all the information regarding what are the
core functions of management in a business
Functions of management
Planning is the:
Start of the process
Bridge between present
Increases likelihood of
achieving desired results
The only thing certain about the future of any organization is
change, and planning
is the essential bridge
between the present and the future that increases the likelihood
of achieving desired results. Planning is the
process by which one determines whether to attempt a task, works
out the most effective way of reaching
desired objectives, and prepares to overcome unexpected
difficulties with adequate resources. Planning is
the start of the process by which an individual or business may
turn empty dreams into achievements.
Planning enables one to avoid the trap of working extremely hard
but achieving little.
Planning is an up-front investment in success. Planning helps a
firm achieve maximum effect from a given
effort. Planning enables a firm to take into account relevant
factors and focus on the critical ones. Planning
helps ensure that the firm can be prepared for all reasonable
eventualities and for all changes that will be
needed. Planning enables a firm to gather the resources needed
and carry out tasks in the most efficient way
possible. Planning enables a firm to conserve its own resources,
avoid wasting ecological resources, make a
fair profit, and be seen as an effective, useful firm. Planning
enables a firm to identify precisely what is to be
achieved and to detail precisely the who, what, when, where, and
why needed to achieve desired objectives.
Planning enables a firm to assess whether the effort, costs and
implications associated with achieving
desired objectives are warranted. Planning is the cornerstone of
effective strategy formulation. But even
though it is considered the foundation of management, it is
commonly the task that managers neglect most.
Planning is essential for successful strategy implementation and
strategy evaluation, largely because
organizing, motivating, staffing, and controlling activities
depend upon good planning.
The process of planning must involve managers and employees
throughout an organization. The time
horizon for planning decreases from two to five years for
top-level to less than six months for lower-level
managers. The important point is that all managers do planning
and should involve subordinates in the
process to facilitate employee understanding and commitment.
Planning can have a positive impact on organizational and
individual performance. Planning allows an
organization to identify and take advantage of external
opportunities and minimize the impact of external
threats. Planning is more than extrapolating from the past and
present into the future. It also includes
developing a mission, forecasting future events and trends,
establishing objectives, and choosing strategies
An organization can develop synergy through planning.
exists when everyone pulls together as a
team that knows what it wants to achieve; synergy is the 2 1 2 5
5 effect. By establishing and communicating
clear objectives, employees and managers can work together
toward desired results. Synergy can result in
powerful competitive advantages. The strategic-management
process itself is aimed at creating synergy in an
Planning allows a firm to adapt to changing markets and thus
shape its own destiny. Strategic management
can be viewed as a formal planning process that allows an
organization to pursue proactive rather than
reactive strategies. Successful organizations strive to control
their own futures rather than merely react to
external forces and events as they occur. Historically,
organisms and organizations that have not adapted to
changing conditions have become extinct. Swift adaptation is
needed today more than ever before because
changes in markets, economies, and competitors worldwide are
Defining task and
Delegation of authority
The purpose of
organizing is to achieve coordinated
effort by defining task and authority relationships.
Organizing means determining who does what and who reports to
whom. There are countless examples in
history of well-organized enterprises successfully competing
against, and in some cases defeating, much
stronger but less-organized firms. A well-organized firm
generally has motivated managers and employees
who are committed to seeing the organization succeed. Resources
are allocated more effectively and used
more efficiently in a well-organized firm than in a disorganized
The organizing function of management can be viewed as
consisting of three sequential activities: breaking
tasks down into jobs (work specialization), combining jobs to
form departments (departmentalization), and
delegating authority. Breaking tasks down into jobs requires
development of job descriptions and job
specifications. These tools clarify for both managers and
employees what particular jobs entail.
Combining jobs to form departments’ results in an organizational
structure, span of control, and a chain of
command. Changes in strategy often require changes in structure
because new positions may be created,
deleted, or merged. Organizational structure dictates how
resources are allocated and how objectives are
established in a firm. Allocating resources and establishing
objectives geographically, for example, is much
different from doing so by product or customer.
The most common forms of departmentalization are functional,
divisional, strategic business unit, and
Span of control
Unity of command
Span of control
Unity of command
Span of control
Unity of command
Delegating authority is an important organizing activity, as
evidenced in the old saying "You can tell how
good a manager is by observing how his or her department
functions when he or she isn't there."
Employees today are more educated and more capable of
participating in organizational decision making
than ever before. In most cases, they expect to be delegated
authority and responsibility, and to be held
accountable for results. Delegation of authority is embedded in
the strategic-management process.
Influencing people to
accomplish specific objectives
Communication is a
Motivating can be
defined as the process of influencing people to accomplish specific objectives.
explains why some people work hard and others do not.
Objectives, strategies, and policies have little
chance of succeeding if employees and managers are not motivated
to implement strategies once they are
formulated. The motivating function of management includes at
least four major components: leadership,
group dynamics, communication, and organizational change.
When managers and employees of a firm strive to achieve high
levels of productivity, this indicates that the
firm's strategists are good leaders. Good leaders establish
rapport with subordinates, empathize with their
needs and concerns, set a good example, and are trustworthy and
fair. Leadership includes developing a
vision of the firm's future and inspiring people to work hard to
achieve that vision. Kirkpatrick and Locke
reported that certain traits also characterize effective
leaders: knowledge of the business, cognitive ability,
self-confidence, honesty, integrity, and drive.
Research suggests that democratic behavior on the part of
leader’s results in more positive attitudes toward
change and higher productivity than does autocratic behavior.
Group dynamics play a major role in employee morale and
satisfaction. Informal groups or coalitions form
in every organization. The norms of coalitions can range from
being very positive to very negative toward
management. It is important, therefore, that strategists
identify the composition and nature of informal
groups in an organization to facilitate strategy formulation,
implementation, and evaluation. Leaders of
informal groups are especially important in formulating and
implementing strategy changes.
the most important word in management, is a major component in motivation. An
organization's system of communication determines whether
strategies can be implemented successfully.
Good two-way communication is vital for gaining support for
departmental and divisional objectives and
policies. Top-down communication can encourage bottom-up
process becomes a lot easier when subordinates are encouraged to
discuss their concerns, reveal their
problems, provide recommendations, and give suggestions. A
primary reason for instituting strategic
management is to build and support effective communication
networks throughout the firm.
The management function of
human resource management, includes
activities such as recruiting, interviewing, testing, selecting,
orienting, training, developing, caring for,
evaluating, rewarding, disciplining, promoting, transferring,
demoting, and dismissing employees, and
managing union relations.
Staffing activities play a major role in strategy-implementation
efforts, and for this reason human resource
managers are becoming more actively involved in the
strategic-management process. Strengths and
weaknesses in the staffing area are important to identify.
The complexity and importance of human resource activities have
increased to such a degree that all but the
smallest organizations now need a full-time human resource
manager. Numerous court cases that directly
affect staffing activities are decided each day. Organizations
and individuals can be penalized severely for
not following federal, state, and local laws and guidelines
related to staffing. Line managers simply cannot
stay abreast of all the legal developments and requirements
regarding staffing. The human resources
department coordinates staffing decisions in the firm so that an
organization as a whole meets legal
requirements. This department also provides needed consistency
in administering company rules, wages,
Human resources management is particularly challenging for
international companies. For example, the
inability of spouses and children to adapt to new surroundings
has become a major staffing problem in
overseas transfers. The problems include premature returns, job
performance slumps, resignations,
discharges, low morale, marital discord, and general discontent.
Wage & salary admin
Strategists are becoming increasingly aware of how important
human resources are to effective strategic
management. Human resource managers are becoming more involved
and more proactive in formulating
and implementing strategies. They provide leadership for
organizations that are restructuring or allowing
employees to work at home.
operations conform to planned operations
function of management includes all
those activities undertaken to ensure that actual
operations conform to planned operations. All managers in an
organization have controlling responsibilities,
such as conducting performance evaluations and taking necessary
action to minimize inefficiencies. The
controlling function of management is particularly important for
effective strategy evaluation. Controlling
consists of four basic steps:
1. Establishing performance standards
2. Measuring individual and organizational performance
3. Comparing actual performance to planned performance standards
4. Taking corrective actions
Measuring individual performance is often conducted
ineffectively or not at all in organizations. Some
reasons for this shortcoming are that evaluation can create
confrontations that most managers prefer to
avoid, can take more time than most managers are willing to
give, and can require skills that many managers
lack. No single approach to measuring individual performance is
without limitations. For this reason, an
organization should examine various methods, such as the graphic
rating scale, the behaviorally anchored
rating scale, and the critical incident method, and then develop
or select a performance appraisal approach
that best suits the firm's needs.
Management Audit Checklist of Questions
The checklists of questions provided below can help determine
specific strengths and weaknesses in the
functional area of business. An answer of
to any question could indicate a potential
the strategic significance and implications of negative answers,
of course, will vary by organization, industry,
and severity of the weakness. Positive or
answers to the checklist questions suggest
potential areas of
1. Does the firm use strategic-management concepts?
2. Are company objectives and goals measurable and well
3. Do managers at all hierarchical levels plan effectively?
4. Do managers delegate authority well?
5. Is the organization's structure appropriate?
6. Are job descriptions and job specifications clear?
7. Is employee morale high?
8. Are employee turnover and absenteeism low?
9. Are organizational reward and control mechanisms effective?