Functions of Management: Planning, Organising, Staffing, Directing, Controlling

Functions of Management: Planning, Organising, Staffing, Directing, Controlling

Management is described as the process of planning, organising, directing and controlling the efforts of organisational members and of using organisational resources to achieve specific goals. Different experts have classified functions of management.

Henry Fayol distinguishes between the principles and elements of management. Principles are the rules and guidelines, while elements are the functions of management. He has grouped the elements into five managerial functions — planning, organizing, commanding, coordinating, and controlling.

According to George & Jerry, “There are four fundamental functions of management i.e. Planning,  Organising, Actuating and Controlling.

The controlling function comprises co-ordination, reporting and budgeting, and Luther Guelick coined the word POSDCORB where:

  • Planning
  • Organising
  • Staffing
  • Directing
  • Coordination
  • Reporting
  • Budget

The most useful method of classifying managerial functions is to group them around the components of planning, organizing, staffing, directing, and controlling. The above functions of management are common to all business enterprises as well as to organizations of other fields, but the manner in which these are carried out will not be the same in different organizations.

Let us now look at each function in detail:

Functions of Management: Planning

Planning is the basic function of management. It implies decision-making as to what is to be done, how it is to be done, when it is to be done and by whom it is to done. Planning is thus, the preparatory step for actions and helps in bridging the gap between the present and the future.

Planning, thus, involves setting objectives and developing best courses of action to achieve these objectives.

Features of Planning

  • Primary function of management – as every activity needs to be planned before it is actually performed.
  • Focus on achieving objectives – goal directed
  • Planning is persuasive – at all levels of management and at also at all functional areas.
  • Continuous Process –
  • Planning is futuristic
  • Involves decision making
  • Intellectual Activity – Requires certain conceptual skills, good foresight and sound judgment to anticipate future events, develop alternative courses of action.

Importance of Planning

  • Planning gives direction
  • Planning reduces the risks of uncertainty
  • Planning reduces overlapping and wasteful activities
  • Planning promotes innovative ideas
  • Planning facilitates decision making
  • Planning establishes standards for controlling

Process of Planning

  1. Setting Objectives/Goals
  2. Developing Premises
  3. Identifying alternative courses of action
  4. Evaluating alternative courses
  5. Selecting an alternative
  6. Implementing the plan
  7. Follow-up action

Functions of Management: Organising

Process of Organising

  • Identification and division of work
  • Departmentalisation
  • Assignment of duties
  • Establishing reporting relationships

Importance of Organising

  • Benefits of specialisation
  • Clarity in working relationships
  • Optimum utilization of resources
  • Adaptation to change
  • Effective administration
  • Development of personnel
  • Expansion and growth

Functions of Management: Staffing

After planning and selection of the organisation structure, the next step in the management process is to fill the various posts provided in the organisation. This is termed as the management of staffing function. In the simplest terms, staffing refers to the managerial function of employing and developing human resources for carrying out the various managerial and non-managerial activities in an organisation.

Importance of Staffing

No organisation can be successful unless it can fill and keep filled the various positions provided for in the structure with the right kind of people.

  • Proper Staffing helps in discovering and obtaining competent personnel for various jobs;
  • Staffing makes for higher performance, by putting right person on the right job;
  • Staffing ensures the continuous survival and growth of the enterprise through the succession planning for managers.
  • Staffing helps to ensure optimum utilisation of the human resources.
  • Staffing improves job satisfaction and morale of employees through objective assessment and fair reward for their contribution.

Process of Staffing

  1. Estimating the Manpower Requirements
  2. Recruitment
  3. Selection
  4. Placement and Orientation
  5. Training and Development
  6. Performance Appraisal
  7. Promotion and career planning
  8. Compensation

Aspects of Staffing

There are three main aspects of staffing:

Functions of Management: Directing

While managing an enterprise, managers have to get things done through people. In order to be able to do so, they have to undertake many activities, like guide the people who work under them, inspire and lead them to achieve common objectives. All these activities of a manager constitute the directing function. Thus, directing is concerned with instructing, guiding, supervising and inspiring people in the organisation to achieve its objectives. In simple terms. directing means giving instructions and guiding people in doing work.

Characteristics of Directing:

  • Directing initiates action
  • Directing takes place at every level of management
  • Directing is a continuous process
  • Directing flows from top to bottom

Importance of Directing

  • Directing helps to initiate action by people in the organisation towards attainment of desired objectives.
  • Directing integrates employees efforts in the organisation in such a way that every individual effort contributes to the organisational performance.
  • Directing guides employees to fully realise their potential and capabilities by motivating and providing effective leadership.
  • Directing facilitates introduction of needed changes in the organisation.
  • Effective directing helps to bring stability and balance in the organisation.

Principles of Directing

  • Maximum individual contribution: Directing techniques must help every individual in the organisation to contribute to his maximum potential for achievement of organisational objectives.
  • Harmony of objectives: Directing should provide harmony by convincing that employee rewards and work efficiency are complimentary to each other
  • Unity of Command: A  person in the organisation should receive instructions from one superior only.
  • Appropriateness of direction technique: Appropriate motivational and leadership technique should be used while directing the people based on subordinate needs, capabilities, attitudes and other situational variables.
  • Managerial communication: Effective managerial communication across all the levels in the organisation makes direction effective
  • Use of informal organisation: A manager should realise that informal groups or organisations exist within every formal organisation. He should spot and make use of such organisations for effective directing.
  • Leadership: While directing the subordinates, managers should exercise good leadership as it can influence the subordinates positively without causing dissatisfaction among them.
  • Follow through: Mere giving of an order is not sufficient. Managers should follow it up by reviewing continuously whether orders are being implemented accordingly or any problems are being encountered. If necessary, suitable modifications should be made in the directions.

Elements of Directing

The process of directing involves guiding, coaching, instructing, motivating, leading the people in an organisation to achieve organisational objectives. The activities can broadly be grouped into four categories which are the elements of directing. These are:

Functions of Management: Co-ordination & Controlling

In every organisation, different types of work are performed by various groups and it becomes essential that the activities of different work groups and departments should be harmonised. This function of management is known as ‘co-ordination’.  In other words, coordination is the orderly arrangement of individual and group efforts to provide unity of action in the pursuit of a common goal.

According to Henri Fayol, “Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established.” In simple terms, controlling means ensuring that activities in an organisation are performed as per the plans.

Importance of Controlling

  • Accomplishing organisational goals
  • Judging accuracy of standards
  • Making efficient use of resources
  • Improving employee motivation
  • Ensuring order and discipline
  • Facilitating coordination in action

Process of Controlling

Controlling is a systematic process involving the following steps.

  1. Setting performance standards
  2. Measurement of actual performance
  3. Comparison of actual performance with standards
  4. Analysing deviations
  5. Taking corrective action

Techniques of Control

Traditional Techniques

  • Personal observation
    • Enables the manager to collect first hand information
    • Creates a psychological pressure on the employees to perform well as they are aware of being observed.
  • Statistical reports
    • Statistical analysis the form of averages, percentages, ratios, correlation, etc., present useful information regarding performance of the organisation in various areas.
  • Breakeven PointBreakeven analysis
    • Breakeven analysis is used to study the relationship between costs, volume and profits.
    • It determines the probable profit and losses at different levels of production.
  • Budgetary control

Modern Techniques

  • Return on investment (RoI)
  • Ratio analysis
  • Responsibility accounting
  • Management audit
  • PERT and CPM
  • Management information system (MIS)

Relation between Planning & Controlling

Planning and controlling are closely related and reinforce each-other. Once a plan becomes operational, controlling is necessary to monitor the progress, measure it, discover deviations and initiate corrective measures to ensure that events conform to plans.

  • Planning based on facts makes controlling easier and effective;
  • Controlling improves future planning by providing information derived from past experience

Planning without controlling is meaningless. Similarly, controlling is blind without planning.

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