SAINt-Petersburg STATE Polytechnical University
Faculty of Economics and Management
Department of Economics and Management of Machine Production Enterprise
Course Paper
«Functions of Management»
St. Petersburg2009
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 management has;
- to review all functions of management;
- 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». [4]
The four functions of management are: planning, organizing, directing, controlling.
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 leadership.
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.» [3]
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:
1. Where are we now?
2. Where do we want to be?
3. 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.» [1]
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 taken.
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 management.
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:
1. Division of labor
2. Delegation of authority
3. Departmentation
4. Span of control
5. Coordination
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:
1. The division/specialization of labor
2. Relative authority
3. Departmentation
4. Span of control
5. The levels of management
6. Coordination centers
7. Formal communication channels
8. Decision responsibility
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:
1. They may imply a formality that doesn't exist.
2. They may be inconsistent with reality.
3. Their usual top down perspective often minimizes the role of customers, front-line managers and employees without management responsibilities.
4. They fail to capture the informal structure and informal communication.
5. They often imply that a pyramidal structure is the best or only way to organize.
6. They fail to address the potential power and authority of staff positions compared with line positions.» [1]
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 subordinates.
Delegation of authority is guided by several key principles and concepts:
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». [3]
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.