The 4 Functions Of Management

Published Date: 02 Nov 2017

INTRODUCTION 2

1.1 Definition of management 2

2) THE FUNCTIONS OF MANAGEMENNT 3

3) Planning 3

3.1 Uses of business planning 4

The content of a business plan 4

3.3 Strategic planning 5

4) Organizing 6

4.1 Types of organizational design 7

4.2 Functions of different departments in an organization 8

4.3 Steps in organizing function from the perspective of a manager 9

5) Leading 10

5.1 Commanding 10

Characteristics of directing 11

6) Evaluating 11

6.1 Characteristics of controlling function of management 12

7) CONCLUSION 13

8) REFERENCING 14

INTRODUCTION:

Definition of Management:

Management can be defined as a group of people appointed by the owners of the company to run the business on their behalf. The main task of the management is to use resources of the business efficiently and make the right decisions in order to achieve the objectives. Management exists since the dawn of creation. Management is understood and viewed by different scientists in different ways. Some scientists define management as follows:

According to Frederick W.Taylor, management is defined as ‘the art to know what you want to do and seeing that it is done in the best and cheapest way.’ In other words, there should be no wastage. Taylor is a controversial figure in management history. That is, he is the first person who brought the idea of scientific management.

According to Stanley Vance, management is ‘the process of decision making and control over the action of human beings for the expressed purpose of attaining pre-determined goals.’

On the other hand, Lawrence Appley defined management as ‘the accomplishment of results through the efforts of other people.

However, Harold Koontz’s point of view was that management is ‘the art of getting things done through and with people in formally organized groups. That is, a happy worker is a productive worker.

In contrast, John Mee defines management as ‘the art of securing maximum results with minimum wise effort so as to secure maximum prosperity and happiness for both employer and employee and giving the public the best possible service.’

In addition, management consists of planning, organizing, leading and evaluating in an organization so as to attain its objectives. Resourcing covers the development and manipulation of human resources, financial resources, technological resources and natural resources. Any organization whether it is new or old, big or small, requires certain techniques, procedures and plans so as the work is done efficiently. For this to happen, these 4 concepts of management should be applied in the business.

THE 4 FUNCTIONS OF MANAGEMENT

four-functions.jpg

Planning

Planning involves deciding on the course of action of the organization. Once the plan is finalized, the resources of the business will be used accordingly. Planning for the future of the organization involves setting aims or targets. For example, ‘a school will aim to increase its sixth form to over 200 students in two years time’ or ‘we should plan to increase sales of our new fruit juice range by 50% in three years.’plan.jpg

These aims or targets will give the organization a sense of direction or purpose. There will be a common feeling in the organization of having something to work towards. It is a poor manager who does not plan for the future at all.

Moreover, to these aims, a manager must also plan for the resources which will be needed. For example, to be able to achieve the aim of increasing student numbers in the sixth form, there is a need to build a new sixth form centre. Another example is that to be able to increase the sale of the fruit juices, an increase in advertising expenditure have to be done. Thus, these are 2 cases of strategies which are designed to help the business achieve its aim.

Uses of business planning:

It helps to plan for the future.

It helps management to better understand the business and the market in which it operates.

It enables management to identify the main causes of action needed to start and run the business.

Also, it helps to set objectives against which the performance of the business can be measured.

A business plan allows an entrepreneur to present a request for extra funding. A business plan would provide all information, a potential landed or investor will need to decide whether they wish to invest.

Even after the business has been set-up and running, a business plan continues to be an essential planning tool. It will provide regular checks on the progress regarding cash flows, financial forecast and objectives of the business.

The content of a business plan:

Business description: It includes the starting date, history of the business, the type of business it is, the legal structure objectives of the firm.

Product or services: In this case, there is a need for the description of product or service being produced and sold, benefits to consumers from consuming this product or service, how it is different from competitors. All these will help for further development in the organization.

Market analysis: Moreover, planning is important for the analysis of market and competitions. That is, to find out customer’s needs and information about competitors, the size of the market, information about customers who uses the product, assessing the future needs of the market.

Strategy and implementation: Here, analysis of decisions and strategies are needed to be carried out, marketing strategies to be adopted, which pricing method to be used, promotions and sales strategies.

Management team: Key workers and staff organization are necessary to be planned. In other words, there should be a plan on the information of the number of workers required and also the salary structure.

Financial plan: It is the preparation of financial documents such as the income statement, Balance sheet, cash flows, break-even analysis, budgeting and costing and other financial forecast.

Strategic planning

In strategic planning, management studies internal and external factors that may affect the business, its objectives and goals. One of the primary tools of strategic planning is the use of SWOT Analysis.

SWOT Analysis is a technique used by the marketing department to assess a product by identifying its strength, weaknesses, opportunities and threats.

To carry out SWOT analysis, four boxes are drawn up. The top two boxes, strengths and weaknesses, relate to the actual position of the product and are internal factors. On the other side, the bottom two boxes, opportunities and threats, relate to the product’s future potential and are external to the organization. This can be illustrated as follows:

swot-analysis.jpg.png

Organizing

The second function of management is organizing. A manager cannot do everything by himself. Thus, tasks must be delegated to others in the organization. Organizing involves coordinating and directing activities to ensure that everyone is aware of what is expected from them and are working towards the set objectives. It is therefore the manager’s responsibility to organize people and resources effectively. Hence, an organizational chart is being made to show who has the authority to do different jobs. Organizational structure refers to the level of management and division of responsibilities within an organization. This can be illustrated as follows:

http://igcsebusinessstudies.files.wordpress.com/2010/04/organizational-structure111-copy.gif

An organization structure shows the relationship between different departments and their functions. It also shows different levels of hierarchy within the firm and the responsibility of each staff.

Hierarchy means the different levels of position that exist within an organization. A staff who is on a higher level on the hierarchy have more power, responsibility, authority and status but at the same time, its accountability for the responsibilities given to him and vice-versa.

There are 2 types of organizational design these are:

Informal organization: It is usually one in which works and activities do not follow any establish procedures, rules and regulations to be carried out. Most small organizations mainly sole traders are informal organization because the owner shoulders all the responsibilities in owning and running the business.

Formal organization: It is one which there is established procedures and rules on how works and activities are to be performed. An organization becomes a formal one when it expands, as it grows in size the owner cannot shoulder all the responsibilities, therefore, he has to delegate responsibilities to other workers to carry out other tasks effectively. Thus, through delegation, new sections, departments are created and workers are recruited so that work within the organization is carried out effectively. In addition, in this type of organization, workers would do exactly what are their responsibilities and what functions the different departments have to perform.

Functions of different departments in an organization

Human resources department

Managers in this department will be responsible for:

Keeping staff records.

Disciplining and warning staff if necessary.

Preparing job descriptions and job satisfactions.

Marketing department

Managers in this department will be responsible for:

Planning new products, working closely with the Research and Development and Production Development.

Deciding upon the best ‘marketing mix’ for each product and making sure that this is put into effects.

Accounting and Finance department

The main responsibilities include:

Deciding on the most appropriate methods of finance.

Analyzing the profitability of new investment projects.

Keeping control of the cash flow of the business.

Production department or operation management

Here, managers will be responsible for:

Controlling production to ensure high levels of efficiency.

Maintaining the efficiency of all machinery.

Administration department

The work of the Administration department varies greatly from one business to another. A typical administration department will undertake the following functions:

Clerical and office support service

Responsibility for the Information Technology System

Cleaning, maintenance and security.

Now comes with the steps in organizing function from the perspective of a manager:

Classification of jobs and activities

All activities which have been occurred should first of all be identified in an organization. For instance, the accounts department will require a cashier, while the assembly line will need the services of supervisors and workers, both skilled and unskilled. However, before that, the activities like accounting of pay-in slips or the procedures involved in the production must be cleared for managers. For examples, preparation of account, making sales, record keeping, quality control, inventory control and among others.

Departmentally organizing the activities

This is the second step which has to be done. The manager tries to join and group similar and related activity into departments. This part of organizing deals with Division of Labour. Division of labour is the process of a work provided into smaller tasks and each of these will be performed by a worker or a group of workers. An example is classifying the workers in charge of welding under a separate supervisor, or forming up a team of software engineers under a team leader.

The distribution of Authority

After the departments are done, the manager will have to organize the powers and its extent to the managers. This is done through a hierarchy. This step is important for the division of responsibility and effective reporting

Co-ordination between authority and responsibility

Simply classifying and handing over responsibility is not enough. The manager should also see the co-ordination between authority and responsibility. The manager must ensure the different departments’ co-ordinate among themselves and identify the powers and duties which are given to each one of them.

Leading

Subsequently, the third step of management is leading which is also called as directing. Through this function, it helps management control and supervises the actions of the staff. Moreover, it helps the workers by guiding them which is the right direction. Thus, through this process, the organization will achieve its objectives and in addition, accomplish their personal or career goals, which can be powered by motivation, communication, department dynamic and department leadership.

Likewise, leading can be in terms of commanding.

Commanding

Not only planning and organizing are important in an organization; but also commanding plays an important role in an organization. Other word for commanding is to give order. At this point, the task of management is more concerned with guiding, leading and supervising people than just telling them what to do. Managers have to make sure that all supervisors and workers are keeping to targets and deadlines. Instructions and guidance must be provided by managers and it is also their responsibility to make sure that the tasks are carried out by people below them in the organization.

Characteristics of directing:

Pervasive function - At all levels of organization, leading is necessary. Directing tries to motivate and lead the workers towards business goals. Thus, all managers give guidance and inspiration to his subordinates.

Continuous activity – Direction is a continuous activity as it continues to operate till the end life of the business.

Human factor – In addition, directing is a human function of management. That is, it deals with people on a personal basis. Here, direction process becomes a major role since human factor is complex and its behavior is unpredictable.

Creativity activity – Also, direction helps in converting plans and put it into practice. If this function would not have been exist, people would become immobile and physical resources would be worthless.

Delegate function – Directing aims to delegate tasks to subordinates. In other words, doing the right thing in the right way can be useful in increasing the level of productivity.

Evaluatingcontrol.jpg

Evaluating is the last function of management. This is a never-ending task of management. In this case, evaluating also called as controlling involves regular check on operations and taking corrective actions if the need arises. In other words, managers must try to measure and evaluate the work in individuals and groups to make sure that they are on target. Although, if disciplinary staff might be important, this is not necessarily be the only reason. There might be other reasons for poor performance other than inefficient workers. It is the manager’s job to find out why targets are not being met and then correct the problem.

According to Brech, "Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs."

According to Donnell, "Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course."

Controlling has got two basic purposes:

It facilitates co-ordination

It helps in planning

Characteristics of controlling function of management:

Controlling is an end function- A function which take place once the performances are made in respect to the plans.

Controlling is a pervasive function- which means managers make use of it at all level and in multiple types of concerns.

Controlling is forward looking- if past is not being controlled, effective control will not be possible. Controlling always looks to expectations so that follow-up can be made whenever requisite.

Controlling is a dynamic process- as controlling requires taking reviewable methods; wherever possible changes have to be mad.

Controlling is related with planning- Planning and Controlling are two inseparable functions of management. If planning was not done, controlling would be a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling succeeds planning.

CONCLUSION:

As a result, it can be concluded that management is not easy to define, but the functions of management helps to demonstrate the varied and important work that good managers should be doing.

When studying these functions that is planning, organizing, leading and evaluating, it should also be clear why management is necessary to any organization. Without clear and effective management, a business is going to lack:

A sense of control and direction

Leading to wastage of effort/resources

Control of employees

Organization of resources, leading to low output and sales. Thus, this will lead to a fall in profits.

Therefore, in short, without management in an organization, the firm will drift and eventually fail.