SAINt-Petersburg STATEPolytechnical University
Faculty of Economics andManagement
Department of Economicsand Management of Machine Production Enterprise
Course Paper
«Functions of Management»
St. Petersburg2009
Introduction
Research and analysis of functions of management is urgentproblem indeed. Management combines characteristics of science and art. In thefirst place management means direction of people, therefore it is impossible toformalize it. But we can mark out some functions of management. So accuratecompliance with management functions allows your organization with the bestprofit and efficiency. In this work you can find description of each managementfunction 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 followingtasks are to be solved in this paper:
- to decide how much functionsmanagement has;
- to review all functions ofmanagement;
- to discuss the main ways of improvingfunctions of management;
The books and articles of the following authors constitutethe theoretical basis for this work: Bernard L. Erven, Henri Fayol, JamesHiggins, Jayashree Pakhare and others. They discussed different theoretical andpractical problems of the matter of this course paper.
In this paper, I attempt to clarify the interdependence ofmanagement functions. To do so, I first present all functions then describedeach one in details.
The structure of this course paper is as follows. The firstpart reviews all management functions. Part 2–5 dwells on each function ofmanagement. The final part summarizes the whole work.
Functions of Management
To decide the first task howmuch 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 fivefunctions: four previous plus staffing. I think that staffing is not as muchimportant as other functions and is contained in organizing therefore in whatfollows I analyzed only four functions.
«Any organization, whether new or old, whether small or bigneed to run smoothly and achieve the goals and objectives which it has setforth. For this they had developed and implemented their own managementconcepts. There are basically four management concepts that allow anyorganization to handle the tactical, planned and set decisions. The four basicfunctions of the management are just to have a controlled plan over thepreventive measure». [4]
The four functions of management are: planning, organizing,directing, controlling.
Planning is the foundation area of management. It is thebase upon which all the areas of management should be built. Planning requiresadministration to assess, where the company is presently set, and where itwould be in the upcoming. From there an appropriate course of action isdetermined and implemented to attain the company’s goals and objectives.
Planning is unending course of action. There may be suddenstrategies where companies have to face. Sometimes they are uncontrollable. Youcan say that they are external factors that constantly affect a company bothoptimistically and pessimistically. Depending on the conditions, a company mayhave to alter its course of action in accomplishing certain goals. This kind ofpreparation, arrangement is known as strategic planning. In strategic planning,management analyzes inside and outside factors that may affect the company andso objectives and goals. Here they should have a study of strengths andweaknesses, 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 inhand to put into practice the course of action to decide that has been plannedin the base function. Through this process, management will now determine the insidedirectorial configuration; establish and maintain relationships, and alsoassign required resources.
While determining the inside directorial configuration,management ought to look at the different divisions or departments. They also shouldthink about harmonization of staff, and try to find out the best way to handlethe important tasks and expenditure of information within the company.Management determines the division of work according to its need. It also hasto decide for suitable departments to hand over authority and responsibilities.
Directing is the third function of the management. Workingunder this function helps the management to control and supervise the actionsof the staff. This helps them to assist the staff in achieving the company’s goalsand also accomplishing their personal or career goals which can be powered bymotivation, communication, department dynamics, and department leadership.
Employees those are highly provoked generally surpass intheir job performance and also play important role in achieving the company’sgoal. And here lies the reason why managers focus on motivating theiremployees. They come about with prize and incentive programs based on jobperformance and geared in the direction of the employees requirements.
It is very important to maintain a productive workingenvironment, building positive interpersonal relationships, and problemsolving. And this can be done only with Effective communication. Understandingthe communication process and working on area that need improvement, helpmanagers to become more effective communicators. The finest technique offinding the areas that requires improvement is to ask themselves and others atregular intervals, how well they are doing. This leads to better relationshipand helps the managers for better directing plans.
Control, the last of four functions of management, includesestablishing performance standards which are, of course, based on the company’sobjectives. It also involves evaluating and reporting of actual jobperformance. When these points are studied by the management then it isnecessary to compare both things. This study on comparison of both decidesfurther corrective and preventive actions.Planning
Planning is concerned with the future impact of today'sdecisions. It is the fundamental function of management from which the otherfour stem. The need for planning is often apparent after the fact. However,planning is easy to postpone in the short-run. Postponement of planningespecially plagues labor oriented, hands on managers.
«The organizing, directing and controlling functions stemfrom the planning function. The manager is ready to organize and staff onlyafter goals and plans to reach the goals is in place. Likewise, the leadingfunction, influencing the behavior of people in the organization, depends onthe goals to be achieved. Finally, in the controlling function, thedetermination of whether or not goals are being accomplished and standards metis based on the planning function. The planning function provides the goals andstandards that drive the controlling function.» [3]
Planning is important at all levels of management. However,its characteristics vary by level of management.Planning Terminology
The order from general to specific is:vision-mission-objectives-goals. The key terms are defined as follows:
- Vision is nonspecificdirectional and motivational guidance for the entire organization. Top managersnormally provide a vision for the business. It is the most emotional of thefour levels in the hierarchy of purposes.
- Mission is an organization'sreason for being. It is concerned with scope of the business and whatdistinguishes this business from similar businesses. Mission reflects theculture and values of top management.
- Objectives refine themission 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 begeneral, observable, challenging, and untimed.
- Goals are specificstatements of anticipated results that further define the organization'sobjectives. 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, whereand how activities will take place to accomplish a goal.Strategic Planning
«Strategic planning is one specific type of planning.Strategies are the outcome of strategic planning. An organization's strategiesdefine the business the firm is in, the criteria for entering the business, andthe basic actions the organization will follow in conducting its business». [3,229] Strategies are major plans that commit large amounts of the organization'sresources to proposed actions, designed to achieve its major objectives andgoals. Strategic planning is the process by which the organization's strategiesare 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 thefirst three steps of the strategy formulation process: (1) perform internal andexternal environmental analyses, (2) review vision, mission and objectives, and(3) determine SWOT: Strengths, Weaknesses, Opportunities and Threats. SWOTanalysis requires managers to be honest, self-disciplined and thorough. Goingon to strategy choices without a comprehensive SWOT analysis is risky.» [1]
Strengths and weaknesses come from the internal environmentof the firm. Strengths can be exploited, built upon and made key toaccomplishment of mission and objectives. Strengths reflect pastaccomplishments in production, financial, marketing and human resourcemanagement. Weaknesses are internal characteristics that have the potential tolimit accomplishment of mission and objectives. Weaknesses may be so importantthat they need to be addressed before any further strategic planning steps aretaken.
Opportunities and threats are uncontrollable by managementbecause they are external to the firm. Opportunities provide the firm thepossibility of a major improvement. Threats may stand in the way of a firmreaching its mission and objectives.Organizing
Organizing is establishing the internal organizationalstructure of the business. The focus is on division, coordination, and controlof tasks and the flow of information within the organization. Managersdistribute responsibility and authority to job holders in this function ofmanagement.Organizational Structure
Each organization has an organizational structure. Byaction and/or inaction, managers structure businesses. Ideally, in developingan organizational structure and distributing authority, managers' decisionsreflect the mission, objectives, goals and tactics that grew out of theplanning 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 organizationthat has more than two people. Small may not be simple.
Organizational structure is particularly important infamily businesses where each family member has three hats (multiple roles):family, business and personal. Confusion among these hats complicatesorganizational structure decisions.Division of Labor
Division of labor is captured in an organization chart, apictorial representation of an organization's formal structure. An organizationchart is concerned with relationships among tasks and the authority to do thetasks. Eight kinds of relationships can be captured in an organization chart:
1. The division/specializationof labor
2. Relative authority
3. Departmentation
4. Span of control
5. The levels of management
6. Coordination centers
7. Formal communicationchannels
8. Decision responsibility
To improve organizing managers should listen to the opinionof Bernard L. Erven. «Organization charts have important weaknesses that shouldbe of concern to managers developing and using them:
1. They may imply a formalitythat doesn't exist.
2. They may be inconsistentwith reality.
3. Their usual top downperspective often minimizes the role of customers, front-line managers andemployees without management responsibilities.
4. They fail to capture theinformal structure and informal communication.
5. They often imply that apyramidal structure is the best or only way to organize.
6. They fail to address thepotential power and authority of staff positions compared with line positions.»[1] Delegationof Authority
Authority is legitimized power. Power is the ability toinfluence others. Delegation is distribution of authority. Delegation frees themanager from the tyranny of urgency. Delegation frees the manager to use his orher time on high priority activities. Note that delegation of authority doesnot free the manager from accountability for the actions and decisions ofsubordinates.
Delegation of authority is guided by several key principlesand concepts:
Exception principle – Someone must be in charge. A personhigher in the organization handles exceptions to the usual. The mostexceptional, rare, or unusual decisions end up at the top management levelbecause no one lower in the organization has the authority to handle them.
Scalar chain of command – The exception principle functionsin concert with the concept of scalar chain of command – formal distribution oforganizational authority is in a hierarchical fashion. The higher one is in anorganization, the more authority one has.
Decentralization – Decisions are to be pushed down to thelowest feasible level in the organization. The organizational structure goal isto have working managers rather than managed workers.
Parity principle – Delegated authority must equalresponsibility. With responsibility for a job must go the authority toaccomplish the job.
Span of control – The span of control is the number ofpeople a manager supervises. The typical guideline is a span of control of nomore than 5–6 people. However, a larger span of control is possible dependingon the complexity, variety and proximity of jobs.
Unity principle – Ideally, no one in an organizationreports to more than one supervisor. Employees should not have to decide whichof their supervisors to make unhappy because of the impossibility of followingall the instructions given them.
Line and staff authority – Line authority is authoritywithin an organization's or unit's chain of command. Staff authority isadvisory to line authority. Assume a crew leader reports to the garden storemanager who in turn reports to the president. Further assume that the crewleader and store manager can hire and fire, and give raises to the people theysupervise. Both the crew leader and store manager have line authority. Tocontrast, assume that the president has an accountant who prepares monthlyfinancial summaries with recommendations for corrective action. The accountanthas staff authority but not line authority.
«Departmentation is the grouping of jobs under theauthority of a single manager, according to some rational basis, for thepurposes of planning, coordination and control. The number of departments in anorganization depends on the number of different jobs, i.e., the size andcomplexity of the business». [3]Directing
Directing is influencing people's behavior throughmotivation, communication, group dynamics, leadership and discipline. Thepurpose of directing is to channel the behavior of all personnel to accomplishthe organization's mission and objectives while simultaneously helping themaccomplish their own career objectives.
Managers give this function a variety of names. Higginscalls it leading. Other labels are: influencing, coaching, motivating,interpersonal relations, and human relations.
The directing function gives the manager an active ratherthan a passive role in employee performance, conduct and accomplishments.Managers accomplish their objectives through people. In blaming others for heror his human resource problems, a manager is denying the managementresponsibilities 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 inthe organization with career planning and professional development is anintegral part of the directing function.Motivation
Selection, training, evaluation and discipline cannotguarantee a high level of employee performance. Motivation, the inner forcethat directs employee behavior, also plays an important role. Highly motivatedpeople perform better than unmotivated people. Motivation covers up ability andskill deficiencies in employees. Such truisms about motivation leave employerswanting to be surrounded by highly motivated people but unequipped to motivatetheir employees. Employers and supervisors want easily applied motivationmodels but such models are unavailable.
Three ways of looking at motivation are: needs, rewards andeffort. The needs approach stems from the notion that peoples' unsatisfiedneeds drive their behavior. Figure out a person's needs, satisfy the needs andthe person will be motivated. For example, a person with a high need to satisfygoals is motivated by production targets. The rewards approach is based on theexpectation that rewarded behavior is repeated. Giving a person a bonus forexcellent performance during a difficult harvest period encourages the personto make a special effort during the next difficult harvest. The effort approachto motivation is based on the expectation that effort brings the worker what heor she wants. The thought that working hard leads to advancement and new careeropportunities is consistent with the effort approach. The effort approachincludes a presumption that the employer is fair, i.e., effort is recognizedand rewarded. Managers cannot reduce motivation to a simple choice of one ofthese approaches. Each of the three approaches contributes to an understandingof motivation and how motivation varies person to person and over time.
«The most effective motivation for employees comes fromwithin each employee, i.e., self-motivation. Possible indicators ofself-motivation include: past accomplishments in school, sports, organizationsand work; stated career goals and other kinds of goals; expertise in one ormore areas that shows evidence of craftsmanship, pride in knowledge andabilities, and self-confidence; an evident desire to continue to learn; and ageneral enthusiasm for life.» [2]Communication Model
The process starts with a sender who has a message for areceiver. Two or more people are always involved in communication. The senderhas the responsibility for the message.
The sender's message travels to the receiver through one ormore channels chosen by the sender. The channels may be verbal or nonverbal.They may involve only one of the senses, hearing for example, or they mayinvolve all five of the senses: hearing, sight, touch, smell, and taste.Nonverbal communication, popularly referred to as body language, reliesprimarily on seeing rather than hearing.
The sending of a message by an appropriate channel to areceiver appears to have completed the communication process or at least thesender's responsibility. Not so! After sending the message, the sender becomesa receiver and the receiver becomes a sender through the process of feedback.Feedback is the receiver's response to the attempt by the sender to send themessage. Feedback is the key to determination by the sender of whether or notthe message has been received in the intended form. Feedback involves choice ofchannel by the receiver of the original message. The channel for feedback maybe quite different from the original channel chosen by the sender. A puzzledlook may be the feedback to what the sender considered a perfectly clear oralinstruction.
Problems with any one of the components of thecommunication model can become a barrier to communication. These barrierssuggest opportunities for improving communication.
1. Muddled messages
2. Stereotyping
3. Wrong channel
4. Language
5. Lack of feedback
6. Poor listening skills
7. Interruptions
8. Physical distractions
The following general guidelines may help communication. Thisis a part of the third goal.
1. Have a positive attitudeabout communication. Defensiveness interferes with communication.
2. Work at improvingcommunication skills. It takes knowledge and work. The communication model anddiscussion of barriers to communication provide the necessary knowledge.
3. Include communication as askill evaluated along with all the other skills in each person's jobdescription.
4. Make communication goaloriented. Relational goals come first and pave the way for other goals.
5. Approach communication as acreative process rather than simply part of the chore of working with people.Experiment with communication alternatives.
6. Accept the reality ofmiscommunication. The best communicators fail to have perfect communication.
Communication is at the heart of many interpersonalproblems in family businesses. Understanding the communication process and thenworking at improvement provide managers a recipe for becoming more effectivecommunicators. Knowing the common barriers to communication is the first stepto minimizing their impact. Managers can reflect on how they are doing and usethe ideas presented in this paper. When taking stock of how well you are doingas a manager and family member, first ask yourself and others how well you aredoing as a communicator.Discipline
High quality farm worker performance requiresimplementation of carefully made tactical plans. Deviations from the plans byemployees results in standards not being met and goals not being accomplished.Managers must deal with employees' deviation from rules, procedures andexpected behaviors. Employees coming late to work, not following safetyprocedures when working alone, not properly cleaning equipment in their rush toget home, and using wrong or wrong amounts of medication are examples ofunacceptable behavior that should be addressed rather than ignored. Acautionary note is in order. Employers can easily confuse discipline problemswith selection, training and communication problems. This discussion ofdiscipline applies to those cases in which the employee can reasonably beexpected to perform or behave according to established standards, norms orrules, i.e., they have been carefully selected, well trained and are regularlyevaluated.
A disciplined person exhibits the self-control, dedicationand orderly conduct consistent with successful performance of jobresponsibilities. This discipline may come through self-discipline, co-workersor the supervisor/employer. Self-discipline is best and most likely to comefrom well selected, trained, and motivated people who regularly have feedbackon their performance.
An employee not performing up to the agreed upon standardsor not following the understood rules is object to punishment, i.e.,disciplinary action. Punishing or disciplining employees falls among the leastpleasant activities in human resource management. In the short-run, doingnothing or ignoring errant actions and behavior almost always comes easier thantaking the needed action. Not disciplining when needed sends confusing messagesto the errant employee, other employees and other managers in the farmbusiness. If starting work at 6:30 a.m. rather than 6:00 a.m. draws no reactionfrom the employer, does this mean the starting time has been changed to 6:30?
Several guidelines help to reduce the compounding ofdiscipline problems with problems in disciplining. Both employers and employeesneed to know the rules and performance expectations. An employee handbook orother form of written statement provided each employee is basic. Rules shouldbe uniformly enforced among all employees. If special rules apply to a certainemployee, e.g., use of the pickup truck without asking permission, otheremployees need to be so informed. Punishment should be based on facts. Allparties should be heard rather than depending on one person only for facts.Action should be taken promptly. «Saving up» a series of minor problems andinfractions for a grand explosion is poor disciplinary practice. All disciplineother than discharge should have the objective of helping the employee. Permitthe employee to maintain self-respect by disciplining the employee's behavioror act. Do not berate the person.
Keeping punishment consistent with the severity of anoffense challenges all labor managers. Being thirty minutes tardy for work thefourth time in two weeks has to be handled differently from being thirtyminutes tardy for the first time in two years. Theft of tools has to be handleddifferently than tardiness for work. Progressive discipline provides a formalstructure within which errant employees can be handled. In progressivediscipline, the severity of punishment increases in relation to the seriousnessof the offense or the number of times an offense is repeated. Typical levels inprogressive discipline are: informal talk and counseling, oral warning orreprimand, written warning, disciplinary layoff and discharge.
Both employers and employees usually react negatively tothe atmosphere of conflict and parent disciplining child inherent toprogressive discipline. High priority placed on selection, training, informalcommunication and performance appraisal reduces the need for punishment ofemployees. Treating employees as adults, expecting them to rely onself-assessment for correcting problems and relying on informal counselingrather than formal reprimands provide an atmosphere of positive discipline.Controlling
«Controlling is a four-step process of establishingperformance standards based on the firm's objectives, measuring and reportingactual performance, comparing the two, and taking corrective or preventiveaction as necessary.
Performance standards come from the planning function. Nomatter how difficult, standards should be established for every important task.Although the temptation may be great, lowering standards to what has beenattained is not a solution to performance problems. On the other hand, amanager does need to lower standards when they are found to be unattainable dueto resource limitations and factors external to the business.» [1]
Corrective action is necessary when performance is belowstandards. If performance is anticipated to be below standards, preventiveaction must be taken to ensure that the problem does not recur. If performanceis greater than or equal to standards, it is useful to reinforce behaviors thatled to the acceptable performance.
Characteristics of the Control Process
The control process is cyclical which means it is neverfinished. Controlling leads to identification of new problems that in turn needto be addressed through establishment of performance standards, measuringperformance etc.
Employees often view controlling negatively. By its verynature, controlling often leads to management expecting employee behavior tochange. No matter how positive the changes may be for the organization,employees may still view them negatively.
Control is both anticipatory and retrospective. The processanticipates problems and takes preventive action. With corrective action, theprocess also follows up on problems.
Ideally, each person in the business views control as hisor her responsibility. The organizational culture should prevent a personwalking away from a small, easily solvable problem because «that isn't myresponsibility.» In customer driven businesses, each employee cares about eachcustomer. In quality driven dairy farms, for example, each employee cares aboutthe welfare of each animal and the wear and tear on each piece of equipment.
Controlling is related to each of the other functions ofmanagement. Controlling builds on planning, organizing and leading.Management Control Strategies
Managers can use one or a combination of three controlstrategies or styles: market, bureaucracy and clan. Each serves a differentpurpose. External forces make up market control. Without external forces tobring about needed control, managers can turn to internal bureaucratic or clancontrol. The first relies primarily on budgets and rules. The second relies onemployees wanting to satisfy their social needs through feeling a valued partof the business.
Self-control, sometimes called adhocracy control, iscomplementary to market, bureaucratic and clan control. By training andencouraging individuals to take initiative in addressing problems on their own,there can be a resulting sense of individual empowerment. This empowermentplays out as self-control. The self-control then benefits the organization andincreases the sense of worth to the business in the individual.
Effective control systems have the followingcharacteristics:
1. Control at all levels in the business
2. Acceptability to those who will enforce decisions
3. Flexibility
4. Accuracy
5. Timeliness
6. Cost effectiveness
7. Understandability
8. Balance between objectivity and subjectivity
9. Coordinated with planning, organizing and leading
Managers expect people in an organization to change theirbehavior in response to control. However, employee resistance can easily makecontrol efforts dysfunctional. The following behaviors demonstrate means bywhich the manager's control efforts can be frustrated:
1. Game playing ® control is something to be beaten, a game between the «boss and me andI want to win.»
2. Resisting control ® a «blue flu» reaction to too much control
3. Providing inaccurate information ® a lack of understanding of why the informationis needed and important leading to «you want numbers, we will give you numbers.»
4. Following rules to the letter ® people following dumb and unprofitable rules inreaction to «do as I say.»
5. Sabotaging ® stealing, discrediting other workers, chasing customers away, gossipingabout the firm to people in the community
6. Playing one manager off against another ® exploiting lack of communication amongmanagers, asking a second manager if don't like the answer from the firstmanager.
Conclusions
Summing up the results of the conducted analysis thefollowing conclusionscan be made:
Management operates through various functions. To decide how much functionsmanagement has I compared some viewpoints of scientists. I think that management has only four functions:
«Planning: deciding what needs to happen in the future(today, next week, next month, next year, over the next 5 years, etc.) andgenerating plans for action.
Organizing: (implementation) making optimum use of theresources required to enable the successful carrying out of plans.
Directing: determining what needs to be done in a situationand getting people to do it.
Controlling: monitoring, checking progress against plans,which may need modification based on feedback.» [5]
In addition, in the paper you can find general rules toimprove communication, which is the part of directing, and organizing.
As you can see competent performance of all managementfunctions ensures an organization stability of development, high profitabilityand efficiency. Planning helps to work out strategy. Organizing is responsiblefor creation the structure of company. Directing makes people to followstrategy. Controlling checks running of the whole company.
Bibliography
1. Bernard L. Erven (2003). TheFive Functions of Management: The Foundation of ManagementExcel. Retrieved March 29, 2009, from:extension.osu.edu/~mgtexcel/Function.html
2. Henri Fayol (1916). Model:Five functions of management. Retrieved March 30, 2009, from: www.provenmodels.com/3
3. James Higgins, The ManagementChallenge, Second edition, Macmillan, 1994.
4. Jayashree Pakhare(25.09.2007). Management Concepts – The Four Functions of Management. Retrieved March 29, 2009, from:www.buzzle.com/articles/management-concepts-the-four-functions-of-management.html
5. Unknown author (2009).Wikipedia, the free encyclopedia: Management. Retrieved March 29, 2009, from: en.wikipedia.org/wiki/Management#Basic_functions_of_management