Functions of Management

A new manager takes over a bank branch on Monday. Nobody hands her a list of tasks, yet her week has the same shape as every manager's: decide what to do, arrange it, find the people, lead them, and check the results.

Writers have listed the functions differently. Exams often ask whose list is whose.

The five functions repeat in a cycle. Planning sets objectives and the course of action. Organising arranges tasks, people and resources. Staffing recruits, selects and develops people. Directing leads, motivates and communicates. Controlling measures results, compares them with the plan and corrects the gap, which feeds the next round of planning.

An illustration. A college fest committee plans the date, a budget and a footfall target. It organises sub-committees for sponsorship, stage and food. It staffs them with volunteers and briefs them. The convenor directs: she keeps people going and settles clashes. After the fest, the committee controls: it compares spending and footfall with the plan. Its lessons shape next year's plan.

Coordination runs through all five, which is why many writers call it the essence of management rather than a separate function. The functions overlap and are performed together, at every level. Top managers spend more of their time planning and organising; first-line managers spend more of theirs directing.

Don't confuse the lists' words. Fayol's "command" and Terry's "actuating" cover broadly what Koontz and O'Donnell call directing. Staffing appears in Gulick's and Koontz and O'Donnell's lists, but not in Fayol's or Terry's. Nor functions with roles: functions say what a manager is trying to achieve; Mintzberg's roles, in the chapter on management, describe how the day is actually spent.

Where it breaks. The neat sequence is a teaching device. Real managers plan, direct and control in the same hour, and Mintzberg's observation of managers found brief, fragmented activity rather than orderly steps.

For exams. Expand POSDCORB, match each list to its writer, and know why coordination is called the essence of management.

Plan, organise, staff, direct, control, then round again.

A Pune auto-parts maker wins an order that doubles its output from next April. If it starts buying machines and hiring people in March, it will miss the order. The work that has to start now is planning.

Planning bridges the gap between where we are and where we want to be. M. E. Hurley put it in a line: planning is deciding in advance what is to be done. It is the primary function, since the others follow from it and controlling has nothing to measure without it.

Nature. Planning is goal-oriented, all-pervasive (done at every level), forward-looking, continuous, an intellectual process, and a matter of choice among alternatives. It offsets uncertainty, gives direction, reduces waste, guides decisions, helps coordination and makes control possible.

The planning process has eight steps. The third column follows a kirana store planning its Diwali season; the figures are illustrative.

Koontz and Weihrich's own eighth step is quantifying plans by making budgets. Many Indian textbooks give it as “implement and follow up”, as here.

The owner also keeps a contingency plan: a second wholesaler, in case the first runs short.

Don't confuse planning with forecasting. A forecast estimates what will happen, such as Diwali demand. Planning decides what to do about it. Forecasts feed the planning premises. Nor a premise with an objective: a premise is an assumption about conditions; an objective is the result you aim for.

Where it breaks. A plan is only as good as its premises, and the future can prove them wrong. Detailed plans take time and money, can make an organisation rigid, and can give a false sense of security. In a fast-changing market, long-range detail dates quickly.

In practice. Write down the premises you are least sure of, and keep a contingency plan for each.

For exams. Expect the order of the eight steps, the meaning of planning premises, the types of plans, and why planning is the primary function.

Go deeper for practitioners

Kinds of plans. Koontz and Weihrich list plans from the broadest to the most specific: purposes or missions, objectives, strategies, policies, procedures, rules, programmes and budgets.

Policy, procedure, rule. A policy guides thinking in decisions and leaves room for judgement: "we prefer to promote from within". A procedure sets the order of steps for a task, such as the steps for approving a loan. A rule requires or forbids one specific action and leaves no judgement: "no smoking in the store". A budget is a plan stated in numbers.

Standing and single-use plans. Policies, procedures and rules are standing plans, used again and again. Programmes and budgets are usually single-use: drawn up for one purpose, such as the Diwali season, and then retired.

Links. Decision making (this unit) covers step 6, choosing among alternatives, in depth. Strategic intent (Unit 6) covers vision, mission and objectives.

A chai stall that grows to three outlets can no longer run on the owner's memory. Someone must buy the milk, someone must count the cash, and everyone must know whom to ask. Organising settles who does what.

Organising brings together physical, financial and human resources and sets up productive relationships among them to reach goals. Planning decides what to do; organising decides how it will be done. It settles what tasks there are, who does them, how they are grouped, who reports to whom and where decisions are made (Robbins and Coulter).

The organising process has four steps. The third column follows the owner of the three chai outlets.

Benefits. Organising gives clear roles and accountability, and channels of communication. It uses resources without duplication, coordinates diverse work, and builds a structure that can grow. The result of organising is the organisation structure, the subject of a later chapter in this unit.

Don't confuse organising with staffing. Organising creates the positions and the links between them. Staffing fills those positions with people. Nor organising with the organisation: organising is the process; the organisation structure is what it produces.

Where it breaks. A structure drawn for today can become rigid tomorrow. Too many levels slow decisions down. People also form informal links that no chart shows, and work often flows through them.

For exams. Know the four steps in order, Allen's definition, the term departmentalisation, and the planning-what, organising-how contrast.

Identify, group, assign, relate.

A new bank branch opens with a building, computers and a deposit target, but only half its officers. Every other function stalls until the right people are in place.

Staffing fills the positions in the organisation structure and keeps them filled: the right person in the right job. Today it is largely the work of human resource management.

An illustration, with round figures. A Pune auto-parts plant adds a production line that needs 40 operators.

• Manpower planning: 10 operators can move across from an older line, so the plant needs 40 − 10 = 30 new people.
• Recruitment: advertisements, visits to local ITIs and employee referrals bring in 300 applications.
• Selection: screening, a skills test, interviews and a medical examination leave 30, one in ten applicants.
• Placement and orientation: each joins a shift and spends the first day learning the safety rules and meeting the team.
• Later steps: training on the new machines, fixing pay, a first appraisal after six months, and a path to shift leader.

Don't confuse recruitment with selection. Recruitment widens the pool: it attracts as many suitable applicants as possible. Selection narrows it: it rejects most of them to choose the few who fit. Nor placement with orientation: placement puts a person in a job; orientation introduces them to the organisation.

Where it breaks. Fayol's and Terry's lists do not name staffing separately, and some writers fold it into organising. In large firms the HR department runs the process. Yet every manager still staffs: choosing team members, training them and appraising them.

For exams. Know the eight steps in order and the difference between recruitment and selection. Unit 2's chapters on human resource planning, recruitment and selection, training and development, and compensation treat these steps in depth.

Plan, find, choose, place, grow, pay, rate, move.

Two supervisors at the same plant get the same plan, the same machines and equally skilled workers. One shift meets its target and the other does not. The difference lies in how each one leads the shift, day by day.

Directing turns plans into action. It has four elements:

• Supervision: overseeing the work.
• Motivation: encouraging effort with monetary and non-monetary incentives.
• Communication: passing on information and understanding.
• Leadership: influencing people to follow.

How a manager directs depends on her leadership style.

One manager, three styles. At a bank branch on a busy month-end, the system goes down and the queue grows. The manager decides alone who handles which customers: autocratic, and right for a crisis. Next week she asks her staff how to rearrange the counters: democratic. Her most experienced loan officer she leaves to manage his own files: laissez-faire.

The first three styles come from Kurt Lewin's studies (1939). James MacGregor Burns (1978) set transactional leadership against transformational. Which style works best depends on the leader's personality, the followers and the organisation's culture.

Don't confuse directing with leadership. Leadership is one of directing's four elements; directing also includes supervision, motivation and communication. Nor transactional with autocratic: transactional describes a trade of rewards for results; autocratic describes who makes the decisions.

Where it breaks. Style labels describe tendencies, not fixed types. Most managers shift between styles, as the branch manager did, and no single style suits every situation.

For exams. Know the four elements, Lewin's three styles (1939) and Burns's pair (1978), and match each style to its strength and weakness. Unit 2's chapter on group behaviour and leadership covers the theories behind this.

Direct through people: oversee, encourage, inform, influence.

During a Diwali sale, an electronics store's marketing team advertises a television offer. The warehouse has not stocked enough sets, and customers leave angry. Each team did its own job well; nobody fitted the jobs together.

Because it runs through every function, Koontz and O'Donnell called coordination the essence of management rather than a separate function. Fayol listed it among his five elements, and it is the CO in Gulick's POSDCORB.

How it is achieved. Clear objectives and plans, a sound structure with defined authority, effective communication, committees and liaison roles, good leadership, and voluntary cooperation among those involved.

Follett's four principles, applied to the Diwali sale:

• Direct contact among the people concerned: the marketing and warehouse heads talk to each other, not through memos.
• Early start, while plans are still being made: they agree stock before the advertisement is booked, not after it runs.
• Reciprocal relating of all the factors in a situation: a change in the offer changes the stock, staffing and delivery plans too.
• Continuity: they keep checking with each other throughout the sale, not just once.

Don't confuse coordination with cooperation. Cooperation is people's willingness to help each other. Coordination is the manager's deliberate work of arranging their efforts. Willing teams can still pull in different directions if nobody coordinates them.

Where it breaks. Coordination costs time: meetings, committees and reports. The bigger and more specialised an organisation becomes, the harder and more costly it is.

For exams. Know the Mooney and Reiley definition, why coordination is the essence of management, the four kinds, and Follett's four principles.

Many efforts, one direction.

A college fest committee budgets ₹5 lakh. Two weeks before the fest it has already spent ₹4.5 lakh, with the stage and lighting still unpaid. It finds out in time only because someone checked.

Fayol wrote that control consists of seeing that everything is carried out in accordance with the plan adopted, the orders given and the principles laid down. Its object is to point out mistakes so that they may be rectified and prevented from recurring.

A worked example, with illustrative figures. A Pune plant's standard for the month is 10,000 pieces at ₹50 a piece, a budget of ₹5 lakh. It makes 9,000 pieces and spends ₹4.95 lakh.

• Output: 9,000 against 10,000, so 1,000 pieces or 10% short.
• Cost per piece: ₹4,95,000 ÷ 9,000 = ₹55, against a standard of ₹50. That is ₹5, or 10%, over.
• Total spending looks ₹5,000 under budget. But 9,000 pieces should have cost 9,000 × ₹50 = ₹4.5 lakh, so the plant overspent by ₹45,000 for the output it made.

Both deviations are significant, so both go to the manager. The cause turns out to be a machine breakdown, and the correction is planned maintenance.

Nature. Control is continuous, present at every level, closely linked with planning, and action-oriented. Good control looks ahead to prevent deviations as well as back to correct them. Robert J. Mockler called it a systematic effort to compare performance with predetermined standards. It then takes whatever action is needed so that resources are used effectively and efficiently.

Don't confuse controlling with planning. Planning sets the standard; controlling checks against it, and its findings feed the next plan. Planning without controlling is pointless, and controlling without planning has nothing to measure. Nor control with punishment: its aim is to correct the cause, not to find someone to blame.

Where it breaks. Managers tend to measure what is easy to count, such as output, and miss what is hard, such as goodwill. Close control can make staff resentful. Some causes, such as a change in government policy or a strike at a supplier, lie outside the firm's control.

For exams. Know the four steps in order, management by exception, the techniques, and the link with planning.

Go deeper for practitioners

Control by timing. Robbins and Coulter sort controls by when they act. Feedforward control acts before the work, such as inspecting raw material as it arrives. Concurrent control acts during the work, such as a supervisor on the shop floor. Feedback control acts after it, such as the monthly report in the example above. Feedback comes too late for the month it measures, so the best systems add the other two.

A decision. Your plant misses its output standard three months running, and each time the cause is different. Step 4 offers two answers: remove the causes, or revise the standard. Before revising it, check whether the standard was ever met, and with what machines and staff.

Links. Strategy implementation and evaluation (Unit 6) applies the same loop to strategy.