The Functions of Management

Introduction: Planning, organizing, leading and controlling (POLC) are the four basic processes or functions of management that constitute the entire work of management. They are all essential parts of management. Planning: Planning involves setting objectives and deciding on actions to be taken to achieve these objectives. It also establishes mission statement, defining the goals of the organization and determining the activities and resources required to achieve them. The managers should decide what to do, how to do it, when to do it and by whom it is to be done. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, competitors, and their customers. Planners must then attempt to forecast future conditions. This forecast form the basis for planning and provides direction. It reduces uncertainty while playing a major role in minimizing wastes, redundancy and risks. It also in a way sets the standard for controlling process. An organization first need to come up with a vision and mission statement this way the customer and the staff will know what to expect. A Mission Statement defines the organization's purpose and primary objectives. Its prime function is internal – to define the key measure or measures of the organization's success – and its prime audience is the leadership team and stockholders. Vision Statements also define the organizations purpose, but this time they do so in terms of the organization's values rather than bottom line measures (values are guiding beliefs about how things should be done). The vision statement communicates both the purpose and values of the organization. For employees, it gives direction about how they are expected to behave and inspires them to give their best. Shared with customers, it shapes customer‟s understanding of why they should work with the organization. Once the mission and vision statements put together the organization needs to figure out long term and short term goals for their business. Goals are a great way to make sure your business is on track and it‟s doing what you want it to do and if not, you can‟t make adjustments along the way so you can still meet your goal. The mission statement is the basis for all goals and plans outlined throughout the organization. Therefore, managers must use effective planning and goal-setting techniques to ensure that internal policies, roles, performances, structures, products, and expenditures are in line with the mission of the organization. Planning involves decision making and choosing among alternative future courses of action. In lay mans terms it could be thought of as thinking before action. It also sets the standards for control. It provides rational and fact based procedure for Decision making.

experimentation or research and analysis. Strategic planning: It involves analyzing competitive opportunities and threats. Strategies refer to the determination of basic long term objectives and of courses of action and allocation of resources to achieve these aims. Michael Porter identified three generic strategies that a firm can adopt: a) Overall Cost Leadership strategy [Deccan Airways aimed at being a low cost carrier] b) Differentiation Strategy [Vertu aims at selling to only a select clientele] c) Focused Strategy [Olivea luxury coaches between Chennai and Bangalore for the business traveller] . It forms the core of the planning process. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization‟s mission.It forms better chances of success and focuses on the organization's goals and helps to cope with changing environment. Tactical planning: It is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Operational planning: It generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. costs or profits.) Selection of an alternative is done based on experience. which is its fundamental reason for existence. often three years or more. and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans. An organization‟s top management most often conducts strategic planning. Goals and plans can become the standard against which performance measurement can be done. There are many different types of plans and planning. The evaluation of alternatives could be done based on the Marginal Analysis (where the additional revenues arising from additional costs are compared) or the Cost Effectiveness Analysis (where objectives are less specific than sales. Middle-level managers often engage in tactical planning. Tactics are the action plans through which strategies are executed. as well as the strengths and weaknesses of the organization. Decision Making is defined as the selection of a course of action from among alternatives.

Druker explained the MBO (Management by Objective) as a concept wherein the top management first sets objectives based on the mission of the company. If it wasn't. 3. Analysing the present situation and future opportunities. management may either have to modify their existing plan. Keep in mind that it's probably a good idea to create flexible alternative plans in the beginning.Common between the planning levels is a five-step process: 1. If the plan is going well. measurable and quantifiable. weaknesses. because it's much easier to be able to change an existing plan rather than having to implement a whole new one. time bound. Peter F.This step involves management devising several plans on how to achieve their objectives. management can revise the way they are conducting their activities so that they can see whether they can still make any improvements on their plan. opportunities available currently and in the future such as increased market demand for an organisation's products. such as competition. 4. This may involve changing the way activities are undertaken in the organization. The test helps management outline the organisation's strengths such as brand name. Implementing the plan-At this stage. weaknesses such as understaffing. The characteristics of a well-designed goal can be stated as it should be specific. 5.Setting objectives-This step involves management defining their goals. and threats to the organisation.this is done by undertaking a SWOT (strength. or select another plan from the alternatives they created. or economic turmoil. some see it as a motivational technique. Monitoring and reviewing results-Management must monitor the results that their plan generates. Though some perceive it as an appraisal tool. and decide whether the plan they selected was successful. opportunities and threats) analysis. management selects the best plan from the alternatives they've developed. Some of the major benefits of this approach are a) Significant improvement of Managing b) Clarification of Organization c) Encouragement of personal commitment d) Development of effective control Organizing: . written in terms of actions. 2. Developing and evaluating alternatives. still others consider it as a planning and control device.

Decisions made about the structure of an organization are generally referred to as organizational design decisions. engineering). Decisions made about the nature of jobs within the organization are generally called “job design” decisions. enterprise function (marketing. delegating to the head of each group the authority necessary to perform activities. Organizing at the level of the organization involves deciding how best to departmentalize. It also includes the job of filling and keeping filled positions in the organization. Printers. experience has shown that it is possible for jobs to become too narrow and specialized. Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources.Organizing encompasses filling positions in the organization structuring and Human Resource Management. grouping these activities in the light of human and material resources available and the best way to utilize them. Decisions must be made about the duties and responsibilities of individual jobs. geography (south. Traditionally. Organizing also includes deciding what type of management structure is required. EMEA. UPS) Organizing also involves the design of individual jobs within the organization. hospitals). which assumed that the more narrow the job content. Many larger organizations use multiple methods of departmentalization. customer served (Corporate banking. tying the groups together horizontally and vertically through authority relationships and information flows. The organization expansion becomes possible by grouping activities and people into departments. product. There are many different ways to departmentalize. jobs into departments to coordinate effort effectively. In case the human resources available do not fit the skill set for the company‟s strategy then this functionality is responsible to hire additional personnel or train the existing resources. explains the career progression The logic to organizing can be summarized as identifying and classifying the activities necessary to achieve the objectives from planning process. or customer. including organizing by function. as well as the manner in which the duties should be carried out. The structure is usually represented by an organization chart. which provides a graphic representation of the chain of command within an organization. Agricultural banking). This could be done by virtue of time (shifts eg. geography. Tablets. A formal organization structure/chart enables effective working of the staff by helping them understand the authority relationships. or cluster. the more proficient the individual performing the job could become. finance. job design was based on principles of division of labor and specialization. APAC). The process of organizing involves designing and development of structure of relationships between members of the team or group assigned to carry out the planned task. Institutional banking. north. However. equipment required (Sales team could be divided into PC. Doing the same mundane job over and over again for years can have negative .

Leading: . delegation. Recently. assigning tasks.outcomes. Many jobs are now designed based on such principles as empowerment. This could be geographic concentration. and turnover. Centralization is the concentration of authority. Effective organizing depends on the mastery of several important concepts: work specialization. The process includes determining the results to be achieved. Authority is the right in a position to exercise discretion in making decisions affecting others. authority. sometimes called division of labor. span of control. Staffing involves identifying work force requirements. promoting. Work specialization. compensating and training or otherwise developing both candidates or current job holders to accomplish their tasks effectively and efficiently. appraising. Employees within each department perform only the tasks related to their specialized function. is the degree to which organizational tasks are divided into separate jobs. and centralization versus decentralization. The chain of command is an unbroken line of authority that links all persons in an organization and defines who reports to whom. selecting. inventorying the people available. recruiting. placing. departmental or general tendency to restrict delegation. The span is defined as the number of subordinates that a supervisor can manage. chain of command. job enrichment and teamwork. including decreased job satisfaction and organizational commitment. Delegation of authority is when a superior gives a subordinate the discretion to make certain decisions. planning the careers of. delegating authority and holding the person responsible for results. many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. increased absenteeism. Decentralization is the tendency to disperse the decision making authority.

Some of the special motivation techniques used today includes money. This is not just a matter for larger businesses. Most employees prefer to work in a place where they have the liberty to use their creativity and innovate. patents etc. If there is no good leadership the business will not reach its objective. This approach analyzes the work situation and determines what causes workers to act the way they do and initiate changes to eliminate troublesome areas or obstruction to performance. Edgar H. even if only one or two people is employed manager still need to make sure that they make the most of their abilities and aptitudes. wishes and similar forces. attention from leadership (often in the form of one on one conversation) and an opportunity to lead a project or task force. According to a November 2009 Mckinsey report the three key motivators were praise from immediate managers. Human motives are based on needs. air. directing and guiding the people in the organization for carrying out their work as per plans and objectives. A very important and often overlooked factor in managing people is creativity. Others are secondary such as self esteem. desires. This freedom address their need to achieve their own goals and enables them to contribute to the company better in terms of new products. Psychologist B. Leading plays a very crucial part in the business organization. Skinner developed an interesting technique for motivation called positive reinforcement or behavior modification. This holds that individuals can be motivated by proper design of their work environment and praise for their performance and that punishment for poor performance produces negative results. status affiliation. Schein developed four conceptions about motivation of people: a) Rational-economic assumption: based on the idea that people are primarily motivated by economic incentives b) Social assumptions: based on the idea that people are motivated by social needs.F. for instance let us consider the leadership and motivation . efficient ways to do existing activities. quality of work life and job enrichment. participation. Motivation refers to the entire class of drives. Job enrichment attempts to make the job more varied by removing dullness associated with performing repetitive operations. Every successful business requires effective leadership to fully utilize the skills of staff in order to achieve the aims of the business. Innovation is the ability to use these ideas. sleep and shelter.Leading refers to the process of motivating. c) Self actualization assumptions: suggests that motives fall into 5 classes in a hierarchy ranging from simple needs for survival to highest needs of self actualization with maximum use of one‟s potential d) Complex assumptions: people are complex and variable and have many motives which combine into a complex pattern. needs. A leader is interpreted as someone who sets direction in an effort and motivates people to follow that direction. accomplishment and self-assertion. affection. Creativity is the ability to develop new ideas. Some of these are physiological requirements for water.

There are no official channels and so ideas flow more easily and are quickly implemented. c) the ability to inspire and d) the ability to act in a manner that will develop a climate conducive to responding to and arousing motivations. Understanding the human factor is the key for the leading function. Controlling: . Leading involves the social and informal sources of influence that you use to inspire action taken by others. As motivators they might act as transformational or transactional leaders. A manager‟s view of the human nature influences the selection of motivational and leadership approaches. needs. Human motives are based on needs. wishes and similar forces. status affiliation. Leaders can impact on innovation as motivators and as organizational architects. As organizational architects they create the organizational context or environment within which innovation takes place. their subordinates will be enthusiastic about exerting effort to attain organizational objectives. Others are secondary such as self esteem. A manager must harmonize the needs of the individuals with the demands of the enterprise. air. The hierarchy of the company runs lateral instead of vertical to maximize creativity. The ingredients of leadership can be summarized as a) the ability to use power effectively and in a responsible manner. Some of these are physiological requirements for Google. sleep and shelter. If managers are effective leaders. Leaders encourage their group to be more innovative and creative by letting them communicate in a less stressful and casual environment. affection. accomplishment and self-assertion. desires. b) the ability to comprehend that humans beings have different motivation forces at different times and in different situations. Motivation refers to the entire class of drives.

In order to overcome the time lags in control. Feed forward control requires designing a model of a process/system and monitoring inputs with a view to detecting future deviations of results from standards and plans thereby giving managers time to take corrective actions. . number of defective products. Performance standards are often stated in monetary terms such as revenue. or profits but may also be stated in other terms. it is suggested that managers use a feed forward control approach and not rely on feedback alone. which include (1) establishing performance standards. and then compare it to the figures they thought they would achieve. or emotions of their subordinates. or they can find ways to improve current performance even if things are going according to plan Managerial control is usually perceived as a simple feedback system. or levels of quality or customer service. identifying variants and taking remedial action. compare with set standards. values. This function does not imply that managers should attempt to control or to manipulate the personalities. Smith and Cronjé state that the technical meaning of „control‟ in business is the process whereby management ensures that the actual works fit in with the predetermined goals and planned activities.The controlling function involves monitoring what is the work actually being done and the results being achieved. and taking corrective action. Instead. The aim of control is to keep deviations from planned activities so that the goals can be achieved with fewer problems. costs. Controlling involves assessing and monitoring performance. Once a performance comparison has been made. These standards could be defined as verifiable goals and objectives as per the Management by Objectives (MBO) principle. The process of monitoring is to ensure that they are being accomplished as planned and of correcting any significant deviations. Management uses indicators they develop to both measure the organisation's actual performance. The purpose of control is to ensure that activities are completed in ways that lead to accomplishment of organizational goals. Controlling consists of three steps. and (3) taking corrective action when necessary. such as units produced. management can take corrective action if performance isn't up to scratch. (2) comparing actual performance against standards. comparing this with what was planned. attitudes. this function of management concerns the manager‟s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans. The advantage of this is that it clearly ties goals and objectives to the organization‟s vision. Although controlling is often thought of in terms of financial criteria. managers must also control production and operations processes. PERT provides a network with milestones connected with the time lines to complete each item. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. but some minimum level of control is essential for organizational survival and success. When properly designed. Material and Product. mission and strategy. since planning provides the necessary performance standards or objectives. Capital Expenditure and Cash Budget. This sequence enables in identifying the critical path. One of the newer generation control tool is the Program Evaluation and review Technique which is a refinement of the Gantt chart. whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. It moves beyond the financial measurement of just goals and objectives. procedures for delivery of services. Space. compliance with company policies. An audit involves an examination and verification of records and supporting documents. and many other activities within the organization. A budget audit provides information about where the organization is with respect to what was planned or budgeted for. The Balance score card is another exception tool that helps in the control. Time. The problems with budgeting is that it could lead to over budgeting depriving supervisors the needed freedom in managing their departments. may be used to hide inefficiencies and cause inflexibility. . could cause overriding the enterprise goals. controls can lead to better performance by enabling the organization to execute its strategy better. Budgets could be of the following types: Revenue and Expense. Two traditional control techniques are budget and performance audits. Managers must weigh the cost and benefits of control.

protecting the environment and natural resources” Motorola's Global Service Day where the employees go out to do various community services like clean up drive. more empirical research. non-government organizations and others can be involved. educational institution. to address both its own competitive interests and the interests of wider society. wherever it operates. visiting orphanages. A study by National Consumers League in 2007 has shown that "Consumers expect corporations to be engaged in their communities in ways that go beyond just making financial contributions" CSR is a business firm‟s obligation. These alternative themes included corporate social performance (CSP). A CSR strategy is crucial for managing the way your business deals with issues such as gender equality. to pursue long-term goals that are good for society. which marks the modern era of CSR. Definitions expanded during the 1960s and proliferated during the 1970s. and business ethics theory. We must maintain in good order the property we are privileged to use. stakeholder good works and charities and bear our fair share of taxes. managing foreign workers and well-being at work. old age homes etc. Johnson and Johnson is one of the best examples of pioneering in CSR activities. It will help ensure your business has a positive impact on people and the environment. CSR can be looked at as the voluntary actions that business can take. We must encourage civic improvements like better health and education.  There is a higher level of personnel satisfaction  Significantly enhances brand image and reputation  Increases sales and consumer loyalty .Corporate Social Responsibility (CSR) Evolution of the CSR finds its beginning in the 1950s. For CSR. In the 1990s. beyond that required by law and economics. over and above compliance with minimum legal requirements. In the 1980s. recycling drive. We must be good citizens . there were fewer new definitions. charitable trusts. Their Credo states ”We are responsible to the communities in which we live and work and to the world community as well. CSR continues to serve as a core construct but yields to or is transformed into alternative thematic frameworks. Why CSR?  It shows the company's long term commitment and aids talent retention. and alternative themes began to mature.

000.a set of guidelines to achieve product quality. BREWED RESPONSIBLY: STARBUCKS COFFEE Starbucks Coffee has always focused on acting responsibly and ethically right from its start 1971. Practices . social responsibility and environmental leadership. economic accountability. One of their main focuses is the sustainable production of green coffee. Founder Anita Roddick led her company to stand up for its beliefs and champion causes such as self-esteem. while building sustainable and impressive businesses. The company supports products such as Ethos Water. and exemplifies how other companies can do the same.000 signatures. socially conscious companies have stepped up their efforts with increasing effectiveness and productivity. Growing expectation from consumers and investors to behave responsibly The following companies stand out as prime examples of how social responsibility can be productively coupled with sound strategies to advance goodwill. From sponsoring posters in 1985 for Greenpeace to presenting a petition against animal testing to the European Union with 4. Ramachandra Aryasri Articles from the Internet .E. The Body Shop has contributed significantly to the causes it supports. BEAUTY COMES FROM WITHIN: THE BODY SHOP The Body Shop is regarded as a pioneer of modern corporate social responsibility as one of the first companies to publish a full report on its efforts and initiatives. which brings clean water to the more than 1 billion people who do not have access. Submitted by Jayaraj Wilson References Principles of Management by Harold Koontz. environmental protection. Heinz Weihrich.F.A. community trade and human rights. A. They provide the leadership to demonstrate how marketers can pursue both objectives simultaneously. animal rights. It created C. These are examples for "how to get it done" so that we can effectively expand our efforts to give back. As such.2 million. Ethos Water has committed to grants totaling more than $6.