Functions of Management
Functions of Management
Faculty of Economics and
Department of Economics
and Management of Machine Production Enterprise
«Functions of Management»
St. Petersburg 2009
Research and analysis of functions of management is urgent
problem indeed. Management combines characteristics of science and art. In the
first place management means direction of people, therefore it is impossible to
formalize it. But we can mark out some functions of management. So accurate
compliance with management functions allows your organization with the best
profit and efficiency. In this work you can find description of each management
function and some advices to improve them.
The present paper is devoted to the problems of management.
This work is aimed at analysis of four functions of management. The following
tasks are to be solved in this paper:
to decide how much functions
to review all functions of
to discuss the main ways of improving
functions of management;
The books and articles of the following authors constitute
the theoretical basis for this work: Bernard L. Erven, Henri Fayol, James
Higgins, Jayashree Pakhare and others. They discussed different theoretical and
practical problems of the matter of this course paper.
In this paper, I attempt to clarify the interdependence of
management functions. To do so, I first present all functions then described
each one in details.
The structure of this course paper is as follows. The first
part reviews all management functions. Part 2–5 dwells on each function of
management. The final part summarizes the whole work.
To decide the first task how
much functions management has I compared some viewpoints of scientists. As Jayashree Pakhare consider,
management has only four functions: planning,
organizing, directing and controlling. At the same time according to Bernard L. Erven and Henri Fayol, management has five
functions: four previous plus staffing. I think that staffing is not as much
important as other functions and is contained in organizing therefore in what
follows I analyzed only four functions.
«Any organization, whether new or old, whether small or big
need to run smoothly and achieve the goals and objectives which it has set
forth. For this they had developed and implemented their own management
concepts. There are basically four management concepts that allow any
organization to handle the tactical, planned and set decisions. The four basic
functions of the management are just to have a controlled plan over the
preventive measure». 
The four functions of management are: planning, organizing,
Planning is the foundation area of management. It is the
base upon which all the areas of management should be built. Planning requires
administration to assess, where the company is presently set, and where it
would be in the upcoming. From there an appropriate course of action is
determined and implemented to attain the company’s goals and objectives.
Planning is unending course of action. There may be sudden
strategies where companies have to face. Sometimes they are uncontrollable. You
can say that they are external factors that constantly affect a company both
optimistically and pessimistically. Depending on the conditions, a company may
have to alter its course of action in accomplishing certain goals. This kind of
preparation, arrangement is known as strategic planning. In strategic planning,
management analyzes inside and outside factors that may affect the company and
so objectives and goals. Here they should have a study of strengths and
weaknesses, opportunities and threats. For management to do this efficiently,
it has to be very practical and ample.
The second function of the management is getting prepared,
getting organized. Management must organize all its resources well before in
hand to put into practice the course of action to decide that has been planned
in the base function. Through this process, management will now determine the
inside directorial configuration; establish and maintain relationships, and
also assign required resources.
While determining the inside directorial configuration,
management ought to look at the different divisions or departments. They also should
think about harmonization of staff, and try to find out the best way to handle
the important tasks and expenditure of information within the company.
Management determines the division of work according to its need. It also has
to decide for suitable departments to hand over authority and responsibilities.
Directing is the third function of the management. Working
under this function helps the management to control and supervise the actions
of the staff. This helps them to assist the staff in achieving the company’s
goals and also accomplishing their personal or career goals which can be
powered by motivation, communication, department dynamics, and department
Employees those are highly provoked generally surpass in
their job performance and also play important role in achieving the company’s
goal. And here lies the reason why managers focus on motivating their
employees. They come about with prize and incentive programs based on job
performance and geared in the direction of the employees requirements.
It is very important to maintain a productive working
environment, building positive interpersonal relationships, and problem
solving. And this can be done only with Effective communication. Understanding
the communication process and working on area that need improvement, help
managers to become more effective communicators. The finest technique of
finding the areas that requires improvement is to ask themselves and others at
regular intervals, how well they are doing. This leads to better relationship
and helps the managers for better directing plans.
Control, the last of four functions of management, includes
establishing performance standards which are, of course, based on the company’s
objectives. It also involves evaluating and reporting of actual job
performance. When these points are studied by the management then it is
necessary to compare both things. This study on comparison of both decides
further corrective and preventive actions.
Planning is concerned with the future impact of today's
decisions. It is the fundamental function of management from which the other
four stem. The need for planning is often apparent after the fact. However,
planning is easy to postpone in the short-run. Postponement of planning
especially plagues labor oriented, hands on managers.
«The organizing, directing and controlling functions stem
from the planning function. The manager is ready to organize and staff only
after goals and plans to reach the goals is in place. Likewise, the leading
function, influencing the behavior of people in the organization, depends on
the goals to be achieved. Finally, in the controlling function, the
determination of whether or not goals are being accomplished and standards met
is based on the planning function. The planning function provides the goals and
standards that drive the controlling function.» 
Planning is important at all levels of management. However,
its characteristics vary by level of management.
The order from general to specific is: vision-mission-objectives-goals.
The key terms are defined as follows:
Vision is nonspecific
directional and motivational guidance for the entire organization. Top managers
normally provide a vision for the business. It is the most emotional of the
four levels in the hierarchy of purposes.
Mission is an organization's
reason for being. It is concerned with scope of the business and what
distinguishes this business from similar businesses. Mission reflects the
culture and values of top management.
Objectives refine the
mission and address key issues within the organization such as market standing,
innovation, productivity, physical and financial resources, profitability,
management and worker performance and efficiency. They are expected to be
general, observable, challenging, and untimed.
Goals are specific
statements of anticipated results that further define the organization's
objectives. They are expected to be SMART: Specific, Measurable, Attainable,
Rewarding, and Timed.
Development of tactics is a fifth level of planning.
Tactics, the most specific and narrow plans, describe who, what, when, where
and how activities will take place to accomplish a goal.
«Strategic planning is one specific type of planning.
Strategies are the outcome of strategic planning. An organization's strategies
define the business the firm is in, the criteria for entering the business, and
the basic actions the organization will follow in conducting its business». [3,
229] Strategies are major plans that commit large amounts of the organization's
resources to proposed actions, designed to achieve its major objectives and
goals. Strategic planning is the process by which the organization's strategies
are determined. In the process, three basic questions are answered:
Where are we now?
Where do we want to be?
How do we get there?
«The «where are we now?» question is answered through the
first three steps of the strategy formulation process: (1) perform internal and
external environmental analyses, (2) review vision, mission and objectives, and
(3) determine SWOT: Strengths, Weaknesses, Opportunities and Threats. SWOT
analysis requires managers to be honest, self-disciplined and thorough. Going
on to strategy choices without a comprehensive SWOT analysis is risky.» 
Strengths and weaknesses come from the internal environment
of the firm. Strengths can be exploited, built upon and made key to
accomplishment of mission and objectives. Strengths reflect past
accomplishments in production, financial, marketing and human resource
management. Weaknesses are internal characteristics that have the potential to
limit accomplishment of mission and objectives. Weaknesses may be so important
that they need to be addressed before any further strategic planning steps are
Opportunities and threats are uncontrollable by management
because they are external to the firm. Opportunities provide the firm the
possibility of a major improvement. Threats may stand in the way of a firm
reaching its mission and objectives.
Organizing is establishing the internal organizational
structure of the business. The focus is on division, coordination, and control
of tasks and the flow of information within the organization. Managers
distribute responsibility and authority to job holders in this function of
Each organization has an organizational structure. By
action and/or inaction, managers structure businesses. Ideally, in developing
an organizational structure and distributing authority, managers' decisions
reflect the mission, objectives, goals and tactics that grew out of the
planning function. Specifically, they decide:
Division of labor
Delegation of authority
Span of control
Management must make these decisions in any organization
that has more than two people. Small may not be simple.
Organizational structure is particularly important in
family businesses where each family member has three hats (multiple roles):
family, business and personal. Confusion among these hats complicates
organizational structure decisions.
Division of labor is captured in an organization chart, a
pictorial representation of an organization's formal structure. An organization
chart is concerned with relationships among tasks and the authority to do the
tasks. Eight kinds of relationships can be captured in an organization chart:
Span of control
The levels of management
To improve organizing managers should listen to the opinion
of Bernard L. Erven. «Organization charts have important weaknesses that should
be of concern to managers developing and using them:
They may imply a formality
that doesn't exist.
They may be inconsistent
Their usual top down
perspective often minimizes the role of customers, front-line managers and
employees without management responsibilities.
They fail to capture the
informal structure and informal communication.
They often imply that a
pyramidal structure is the best or only way to organize.
They fail to address the
potential power and authority of staff positions compared with line positions.»
Authority is legitimized power. Power is the ability to
influence others. Delegation is distribution of authority. Delegation frees the
manager from the tyranny of urgency. Delegation frees the manager to use his or
her time on high priority activities. Note that delegation of authority does
not free the manager from accountability for the actions and decisions of
Delegation of authority is guided by several key principles
Exception principle – Someone must be in charge. A person
higher in the organization handles exceptions to the usual. The most
exceptional, rare, or unusual decisions end up at the top management level
because no one lower in the organization has the authority to handle them.
Scalar chain of command – The exception principle functions
in concert with the concept of scalar chain of command – formal distribution of
organizational authority is in a hierarchical fashion. The higher one is in an
organization, the more authority one has.
Decentralization – Decisions are to be pushed down to the
lowest feasible level in the organization. The organizational structure goal is
to have working managers rather than managed workers.
Parity principle – Delegated authority must equal
responsibility. With responsibility for a job must go the authority to
accomplish the job.
Span of control – The span of control is the number of
people a manager supervises. The typical guideline is a span of control of no
more than 5–6 people. However, a larger span of control is possible depending
on the complexity, variety and proximity of jobs.
Unity principle – Ideally, no one in an organization
reports to more than one supervisor. Employees should not have to decide which
of their supervisors to make unhappy because of the impossibility of following
all the instructions given them.
Line and staff authority – Line authority is authority
within an organization's or unit's chain of command. Staff authority is
advisory to line authority. Assume a crew leader reports to the garden store
manager who in turn reports to the president. Further assume that the crew
leader and store manager can hire and fire, and give raises to the people they
supervise. Both the crew leader and store manager have line authority. To
contrast, assume that the president has an accountant who prepares monthly
financial summaries with recommendations for corrective action. The accountant
has staff authority but not line authority.
«Departmentation is the grouping of jobs under the
authority of a single manager, according to some rational basis, for the
purposes of planning, coordination and control. The number of departments in an
organization depends on the number of different jobs, i.e., the size and
complexity of the business». 
Directing is influencing people's behavior through
motivation, communication, group dynamics, leadership and discipline. The
purpose of directing is to channel the behavior of all personnel to accomplish
the organization's mission and objectives while simultaneously helping them
accomplish their own career objectives.
Managers give this function a variety of names. Higgins
calls it leading. Other labels are: influencing, coaching, motivating,
interpersonal relations, and human relations.
The directing function gives the manager an active rather
than a passive role in employee performance, conduct and accomplishments.
Managers accomplish their objectives through people. In blaming others for her
or his human resource problems, a manager is denying the management
responsibilities inherent in the directing function.
The directing function gives managers a second responsibility:
helping people in the organization accomplish their individual career goals.
Organizations do not succeed while their people are failing. Helping people in
the organization with career planning and professional development is an
integral part of the directing function.
Selection, training, evaluation and discipline cannot
guarantee a high level of employee performance. Motivation, the inner force
that directs employee behavior, also plays an important role. Highly motivated
people perform better than unmotivated people. Motivation covers up ability and
skill deficiencies in employees. Such truisms about motivation leave employers
wanting to be surrounded by highly motivated people but unequipped to motivate
their employees. Employers and supervisors want easily applied motivation
models but such models are unavailable.
Three ways of looking at motivation are: needs, rewards and
effort. The needs approach stems from the notion that peoples' unsatisfied
needs drive their behavior. Figure out a person's needs, satisfy the needs and
the person will be motivated. For example, a person with a high need to satisfy
goals is motivated by production targets. The rewards approach is based on the
expectation that rewarded behavior is repeated. Giving a person a bonus for
excellent performance during a difficult harvest period encourages the person
to make a special effort during the next difficult harvest. The effort approach
to motivation is based on the expectation that effort brings the worker what he
or she wants. The thought that working hard leads to advancement and new career
opportunities is consistent with the effort approach. The effort approach
includes a presumption that the employer is fair, i.e., effort is recognized
and rewarded. Managers cannot reduce motivation to a simple choice of one of
these approaches. Each of the three approaches contributes to an understanding
of motivation and how motivation varies person to person and over time.
«The most effective motivation for employees comes from
within each employee, i.e., self-motivation. Possible indicators of
self-motivation include: past accomplishments in school, sports, organizations
and work; stated career goals and other kinds of goals; expertise in one or
more areas that shows evidence of craftsmanship, pride in knowledge and
abilities, and self-confidence; an evident desire to continue to learn; and a
general enthusiasm for life.» 
The process starts with a sender who has a message for a
receiver. Two or more people are always involved in communication. The sender
has the responsibility for the message.
The sender's message travels to the receiver through one or
more channels chosen by the sender. The channels may be verbal or nonverbal.
They may involve only one of the senses, hearing for example, or they may
involve all five of the senses: hearing, sight, touch, smell, and taste.
Nonverbal communication, popularly referred to as body language, relies
primarily on seeing rather than hearing.
The sending of a message by an appropriate channel to a
receiver appears to have completed the communication process or at least the
sender's responsibility. Not so! After sending the message, the sender becomes
a receiver and the receiver becomes a sender through the process of feedback.
Feedback is the receiver's response to the attempt by the sender to send the
message. Feedback is the key to determination by the sender of whether or not
the message has been received in the intended form. Feedback involves choice of
channel by the receiver of the original message. The channel for feedback may
be quite different from the original channel chosen by the sender. A puzzled
look may be the feedback to what the sender considered a perfectly clear oral
Problems with any one of the components of the
communication model can become a barrier to communication. These barriers
suggest opportunities for improving communication.
Lack of feedback
Poor listening skills
The following general guidelines may help communication. This
is a part of the third goal.
Have a positive attitude
about communication. Defensiveness interferes with communication.
Work at improving
communication skills. It takes knowledge and work. The communication model and
discussion of barriers to communication provide the necessary knowledge.
Include communication as a
skill evaluated along with all the other skills in each person's job
Make communication goal
oriented. Relational goals come first and pave the way for other goals.
Approach communication as a
creative process rather than simply part of the chore of working with people.
Experiment with communication alternatives.
Accept the reality of
miscommunication. The best communicators fail to have perfect communication.
Communication is at the heart of many interpersonal
problems in family businesses. Understanding the communication process and then
working at improvement provide managers a recipe for becoming more effective
communicators. Knowing the common barriers to communication is the first step
to minimizing their impact. Managers can reflect on how they are doing and use
the ideas presented in this paper. When taking stock of how well you are doing
as a manager and family member, first ask yourself and others how well you are
doing as a communicator.
High quality farm worker performance requires
implementation of carefully made tactical plans. Deviations from the plans by
employees results in standards not being met and goals not being accomplished.
Managers must deal with employees' deviation from rules, procedures and
expected behaviors. Employees coming late to work, not following safety
procedures when working alone, not properly cleaning equipment in their rush to
get home, and using wrong or wrong amounts of medication are examples of
unacceptable behavior that should be addressed rather than ignored. A
cautionary note is in order. Employers can easily confuse discipline problems
with selection, training and communication problems. This discussion of
discipline applies to those cases in which the employee can reasonably be
expected to perform or behave according to established standards, norms or
rules, i.e., they have been carefully selected, well trained and are regularly
A disciplined person exhibits the self-control, dedication
and orderly conduct consistent with successful performance of job
responsibilities. This discipline may come through self-discipline, co-workers
or the supervisor/employer. Self-discipline is best and most likely to come
from well selected, trained, and motivated people who regularly have feedback
on their performance.
An employee not performing up to the agreed upon standards
or not following the understood rules is object to punishment, i.e.,
disciplinary action. Punishing or disciplining employees falls among the least
pleasant activities in human resource management. In the short-run, doing
nothing or ignoring errant actions and behavior almost always comes easier than
taking the needed action. Not disciplining when needed sends confusing messages
to the errant employee, other employees and other managers in the farm
business. If starting work at 6:30 a.m. rather than 6:00 a.m. draws no reaction
from the employer, does this mean the starting time has been changed to 6:30?
Several guidelines help to reduce the compounding of
discipline problems with problems in disciplining. Both employers and employees
need to know the rules and performance expectations. An employee handbook or
other form of written statement provided each employee is basic. Rules should
be uniformly enforced among all employees. If special rules apply to a certain
employee, e.g., use of the pickup truck without asking permission, other
employees need to be so informed. Punishment should be based on facts. All
parties should be heard rather than depending on one person only for facts.
Action should be taken promptly. «Saving up» a series of minor problems and
infractions for a grand explosion is poor disciplinary practice. All discipline
other than discharge should have the objective of helping the employee. Permit
the employee to maintain self-respect by disciplining the employee's behavior
or act. Do not berate the person.
Keeping punishment consistent with the severity of an
offense challenges all labor managers. Being thirty minutes tardy for work the
fourth time in two weeks has to be handled differently from being thirty
minutes tardy for the first time in two years. Theft of tools has to be handled
differently than tardiness for work. Progressive discipline provides a formal
structure within which errant employees can be handled. In progressive
discipline, the severity of punishment increases in relation to the seriousness
of the offense or the number of times an offense is repeated. Typical levels in
progressive discipline are: informal talk and counseling, oral warning or
reprimand, written warning, disciplinary layoff and discharge.
Both employers and employees usually react negatively to
the atmosphere of conflict and parent disciplining child inherent to
progressive discipline. High priority placed on selection, training, informal
communication and performance appraisal reduces the need for punishment of
employees. Treating employees as adults, expecting them to rely on
self-assessment for correcting problems and relying on informal counseling
rather than formal reprimands provide an atmosphere of positive discipline.
«Controlling is a four-step process of establishing
performance standards based on the firm's objectives, measuring and reporting
actual performance, comparing the two, and taking corrective or preventive
action as necessary.
Performance standards come from the planning function. No
matter how difficult, standards should be established for every important task.
Although the temptation may be great, lowering standards to what has been
attained is not a solution to performance problems. On the other hand, a
manager does need to lower standards when they are found to be unattainable due
to resource limitations and factors external to the business.» 
Corrective action is necessary when performance is below
standards. If performance is anticipated to be below standards, preventive
action must be taken to ensure that the problem does not recur. If performance
is greater than or equal to standards, it is useful to reinforce behaviors that
led to the acceptable performance.
The control process is cyclical which means it is never
finished. Controlling leads to identification of new problems that in turn need
to be addressed through establishment of performance standards, measuring
Employees often view controlling negatively. By its very
nature, controlling often leads to management expecting employee behavior to
change. No matter how positive the changes may be for the organization,
employees may still view them negatively.
Control is both anticipatory and retrospective. The process
anticipates problems and takes preventive action. With corrective action, the
process also follows up on problems.
Ideally, each person in the business views control as his
or her responsibility. The organizational culture should prevent a person
walking away from a small, easily solvable problem because «that isn't my
responsibility.» In customer driven businesses, each employee cares about each
customer. In quality driven dairy farms, for example, each employee cares about
the welfare of each animal and the wear and tear on each piece of equipment.
Controlling is related to each of the other functions of
management. Controlling builds on planning, organizing and leading.
Managers can use one or a combination of three control
strategies or styles: market, bureaucracy and clan. Each serves a different
purpose. External forces make up market control. Without external forces to
bring about needed control, managers can turn to internal bureaucratic or clan
control. The first relies primarily on budgets and rules. The second relies on
employees wanting to satisfy their social needs through feeling a valued part
of the business.
Self-control, sometimes called adhocracy control, is
complementary to market, bureaucratic and clan control. By training and
encouraging individuals to take initiative in addressing problems on their own,
there can be a resulting sense of individual empowerment. This empowerment
plays out as self-control. The self-control then benefits the organization and
increases the sense of worth to the business in the individual.
Effective control systems have the following
1. Control at all levels in the business
2. Acceptability to those who will enforce decisions
6. Cost effectiveness
8. Balance between objectivity and subjectivity
9. Coordinated with planning, organizing and leading
Managers expect people in an organization to change their
behavior in response to control. However, employee resistance can easily make
control efforts dysfunctional. The following behaviors demonstrate means by
which the manager's control efforts can be frustrated:
1. Game playing ® control is something to be beaten, a game between the «boss and me and
I want to win.»
2. Resisting control ® a «blue flu» reaction to too much control
3. Providing inaccurate information ® a lack of understanding of why the information
is needed and important leading to «you want numbers, we will give you numbers.»
4. Following rules to the letter ® people following dumb and unprofitable rules in
reaction to «do as I say.»
5. Sabotaging ® stealing, discrediting other workers, chasing customers away, gossiping
about the firm to people in the community
6. Playing one manager off against another ® exploiting lack of communication among
managers, asking a second manager if don't like the answer from the first
Summing up the results of the conducted analysis the
following conclusions can be made:
Management operates through various functions. To decide how much functions
management has I compared some viewpoints of scientists. I think that management has only four functions:
«Planning: deciding what needs to happen in the future
(today, next week, next month, next year, over the next 5 years, etc.) and
generating plans for action.
Organizing: (implementation) making optimum use of the
resources required to enable the successful carrying out of plans.
Directing: determining what needs to be done in a situation
and getting people to do it.
Controlling: monitoring, checking progress against plans,
which may need modification based on feedback.» 
In addition, in the paper you can find general rules to
improve communication, which is the part of directing, and organizing.
As you can see competent performance of all management
functions ensures an organization stability of development, high profitability
and efficiency. Planning helps to work out strategy. Organizing is responsible
for creation the structure of company. Directing makes people to follow
strategy. Controlling checks running of the whole company.
Bernard L. Erven (2003). The
Five Functions of Management: The Foundation of ManagementExcel. Retrieved March 29, 2009, from:
Henri Fayol (1916). Model:
Five functions of management. Retrieved March 30, 2009, from: http://www.provenmodels.com/3
James Higgins, The
Management Challenge, Second edition, Macmillan, 1994.
(25.09.2007). Management Concepts – The Four Functions of Management. Retrieved March 29, 2009, from:
Unknown author (2009).
Wikipedia, the free encyclopedia: Management. Retrieved March 29, 2009, from: http://en.wikipedia.org/wiki/Management#Basic_functions_of_management