Management Functions

The management process consists of four basic functions, namely, planning,

organizing, directing and controlling. These functions are the manager’s tools to
achieve the organizational goals and objectives. These functions are interrelated
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and interdependent so that a significant change in one function affects the functioning
of others.
Planning
Planning is considered to be the central function of management and determines
the organization’s direction. It is a rational and systematic way of making decisions
today that will affect the future of the company. It involves the process of ascertaining
organizational goals and objectives and deciding on activities to attain these
objectives. It is also a process of preparing for change and coping with uncertainty
by formulating future courses of action. Planning is particularly important because
of scarce resources and uncertain environments with a fierce competition for these
resources.
Planning is a kind of organized foresight and corrective hindsight. It involves
forecasting 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. 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 programme incorporates the effects of both external
as well as internal factors. The external factors are shortages of resources, both
capital and material, general economic trend in terms of interest rates and inflation,
dynamic technological advancements, increased governmental regulations regarding
community interests, unstable international political environments ‘and so on. The
internal factors that affect planning include limited growth opportunities due to
saturation which may require diversification, changing patterns of work force, more
complex organizational structures, decentralization and so on.
Organizing
Organizing requires a formal structure of authority and the direction and flow or
such authority through which work sub-divisions are defined, arranged and
coordinated so that each part relates to each other part in a united and coherent
manner so as to attain the prescribed objectives. Thus, the function of organizing
involves the determination of activities that need to be done in order to achieve 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 organizing function is concerned with:
 Identifying the tasks that must be performed and grouping them wherever
necessary.
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 Assigning these tasks to the personnel while at the same time defining their
authority and responsibility.
 Delegating such authority to these employees.
 Establishing a relationship between authority and responsibility.
 Coordinating these activities.
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. 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 back from them. Motivation factor is very important, since
highly motivated people show excellent performance with less direction from
superiors. Supervising subordinates would give continuous progress reports as
well as assure the superiors that the directions are being properly carried out.
The leadership style that works best varies, depending upon the characteristics
of the leader, the followers and the relevant situation. As the president of a top
“Fortune 500” company said, “A leader must lead, not drive. People are
unpredictable, different from one another, often irascible, frequently petty, sometimes
vain, but always magnificent if they are properly motivated”.
Controlling
The function of controlling consists of those activities that are undertaken to ensure
that the events do not deviate from the pre-arranged plans. It is the process of
devising ways and means of assuring that planned performance is actually achieved.
In essence, control involves sequentially:
 Setting up standards of performance
 Determining methods for measuring such performance
 Measuring the actual performance using these methods
 Comparing these measurements with the pre-established standards, and
 Taking corrective action, when necessary, to correct any deviations
between the measured performance and expected performance.
Check Your Progress
1. How does Megginson, Mosley and Pietri define management?
2. What is diagnostic skill?
3. What are the four basic functions of management?