Fucntions of Management
Fucntions of Management
Fucntions of Management
Management
th
B.Tech 4 Year
By: Dr. Geeta Sachdeva
Asst. Prof.
Dept. of Hum. & S.S.
NIT Kurukshetra
Functions of Management
Management is a set of principles relating to the functions of planning, organizing,
directing, and controlling, and the applications of these principles in harnessing
physical, financial, human, and informational resources efficiently and effectively to
achieve organizational goals in efficient manner.
1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling
Planning contd.
Planning is an activity. It can be considered as consisting of a process.
• Open System approach- Managers have to take into account the dynamic features of
environment.
• Pervasive approach
Types of Planning
• Corporate vs. Functional Panning:
Corporate planning deals with planning activates at top level. It determines the long
term objectives and generate plans to achieve these objectives.
Operational Planning is a short term planning usually covers one year or so. It is
undertaken out of strategic planning. It focuses on internal environment.
Types of Plans
• Standing Plans and Single use plans-
Standing plans provide guidelines for further course of action and are used over a period
of time. Once formulated these plans are used for a long period.
Single use plans- are relevant for a specified time and after the lapse of the time these
plans are formulated again for next period.
Planning reduces business related risks- Planning helps to forecast the business related
risk and also helps to take necessary precautions to avoid these risks and prepare for
future uncertainties
• Planning helps in decision making – A manager makes many different plans. Then
they evaluate every course of action and choose the best strategy. So decision making
is facilitated by planning.
• Planning helps to achieve objectives- Without Planning each and every activity will
be based on trial and error which will give rise to confusion Every organization has
certain targets. Planning helps an organization to achieve their aims by avoiding
overlapping, confusion and misunderstanding.
Importance of Planning contd..
• Planning provides basis of control-Planning is the first function of management. The
other functions like organising, staffing, directing and controlling etc. are organized
for implementing plans. Controlling records the actual performance and compares it
with standards set. In case the performance is less than the standards set then
deviations are ascertained and proper corrective measures are taken to improve the
performance in future. Planning and controlling both are dependent on each other.
Planning establishes standards for controlling. Therefore, Planning is necessary for
effective and efficient functioning of every organisation irrespective of its size,
type and objectives.
Steps in Planning Process
• Establishing verifiable goals- The first step in planning is to determine the enterprise
objectives. These are more often set by upper level managers. The objective may vary
from a desired sales volume or growth rate to development of a new product.
• Establishing Planning Premises- Plans are made to operate in the future. The second
step in planning is to establish planning premises i.e. assumption on the basis of which
plans will be ultimately formulated. Planning premises are vital to the success of
planning as they supply important facts and information related to future like
population trends, economic condition, production cost, government control etc.
• Deciding the Planning Period –The next task is to decide the period of the plan
whether it’s a yearly plan or a plan which is spread over for longer span of time.
Choice of planning period is decided based on time required in development of new
product, time required to recover capital investment and length of commitments
already made.
Steps in Planning Process contd..
• Finding alternative course of action – The next in planning is to search for and examine
alternative course of action. For Ex-Products may be sold directly to the consumers by the
company’s salesman or through exclusive agencies.
• Evaluating and selecting a course of action- Having searched the alternative courses, the
next step is to evaluate and analyse them in the light of premises and goals and select the
best alternative. This is done with the help of quantitative techniques and operations
research.
• Implementing the Plan- The best possible course of action has now to be implemented i.e.
putting the plan into action . For this the managers have to develop derivative plans for each
department. A draft version of the action plan should be communicated to inform those
directly affected and gain their cooperation.
• Measuring and Controlling the Programme –The process of controlling is a critical part of
any plan. Managers need to check the progress of their plans i.e. follow up, so that they can
take remedial action if the plan is not working as per schedule or change the original plan if
it is unrealistic.
Organizing
After planning the next function of management is organising. Organising involves
division of work among people whose efforts must be coordinated to achieve specific
objectives and to implement pre-determined strategies. It is the backbone of
management. After the objectives of an enterprise are determined and the plan is
prepared, the next step in the management process is to organize the activities of the
enterprise.
According to Louis Allen "Organising is the process of identifying and grouping the work to
be performed defining and delegating responsibility and authority, and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives."
Importance of Organizing
• It facilitates efficient management - Organising is necessary for the performance of
other functions of management .Poor organisation may result in duplication of work
and efforts.
• It facilitates growth and diversification- Sound organization helps in the growth and
expansion of the enterprise by facilitating its efficient management .It also increases
the capacity of the enterprise to undertake more activities.
Importance of Organizing
• It ensures optimum use of resources -Organising leads to the optimum use of all
material, financial and human resources. It matches the jobs with the individuals and
vice versa and ensures that job position is clearly defined. It minimizes confusion and
wastage of resources.
• 1. Organising as a process
• 2. Organising as a structure
Organizing as a Process
It refers to the way in which the work of a group is arranged and distributed among
members to efficiently achieve the objectives. It creates a relationship of one job to
another and lays down the scope of authority and responsibility. The duties are fixed in
such a manner so that the work is performed with speed, accuracy and economy.
Steps in the Process of Organizing
• Determination of objectives - The purpose of the organisation must be identified.
Objectives determine resources and various activities which should be done to achieve
the organisational goals.
• Identification and grouping of activities- If group members are to pool their efforts
successfully, there must be proper division of the major activities. Each job should be
accurately classified and grouped. This will avoid duplication of work.
• Assignment of duties- After grouping the activities into various jobs, as per the nature
of work, Similar activities should be placed under one department . Each individual
should be given a particular task according to his ability and skills.
Steps in the Process of Organizing contd.
• Establishing relationship among individuals and group- The activities which are
performed by person holding different positions must be related. Every person in the
organisation should know about his responsibility, authority and accountability so that
there is coordination, among individuals and departments. The organizing process
results in organization structure with precisely defined authority and responsibilities.
Organisation Structure
An Organisation Structure shows the authority responsibility relationship between the
various positions in the organization by showing who reports whom, It lays down the
pattern of communication and coordination in the enterprise. It facilitates growth of the
enterprise by increasing capacity to handle diversified situations. Organisation structure
is usually shown on an organisation chart. There are basically 2 types of organization
structure.
1. Functional Structure
2. Divisional Structure
Functional Structure
Functional structure- This type of organization structure is formed by grouping together
all activities into functional department and putting each department under one head.
Functional structure leads to specialization. It promotes efficiency and results in
increased profits. Its suitable to organization where operations require high degree of
specialization . For example –A steel manufacturing Company has divided its structure
into Manufacturing, Finance, Marketing Personnel, Research and Development, as it has
diversified activities and its operation require a high degree of specialization.
Functional Structure contd..
Divisional Structure
Divisional Structure- Large Companies often find it to operate as one large unit under a
functional organizational structure. The size of the company makes it difficult for
managers to oversee operations and screen customers. To overcome this problem, most
large companies are now structured as divisional organisations. Each division functions
relatively autonomously because it contains most of the functional expertise under each
unit. Division can be formed according to product, customers, processes or geographical
division.
One example of this is a company like General Electric. GE has many different divisions
including aviation, transportation, currents, digital and renewable energy, among others.
Under this structure, each division essentially operates as its own company, controlling
its own resources and how much money it spends on certain projects or aspects of the
division.
Divisional Structure contd..
Matrix Structure
A hybrid organizational structure, the matrix structure is a blend of the functional
organizational structure and the projectized organizational structure.
In the matrix structure, employees may report to two or more bosses depending on the
situation or project. For example, under normal functional circumstances, an engineer at
a large engineering firm could work for one boss, but a new project may arise where that
engineer’s expertise is needed. For the duration of that project, the employee would
also report to that project’s manager, as well as his or her boss for all other daily tasks.
The matrix structure is challenging because it can be tough reporting to multiple bosses
and knowing what to communicate to them. That’s why it’s very important for the
employees to know their roles, responsibilities and work priorities.
Advantages of this structure is that employees can share their knowledge across the
different functional divisions, allowing for better communication and understanding of
each function’s role. And by working across functions, employees can broaden their skills
and knowledge, leading to professional growth within the company.
Matrix Structure
Virtual Organizational Structure
Is also known as digital organisation, network organisation or modular organisation.
Simply speaking, a virtual organisation is a network of cooperation made possible by,
what is called ICT, i.e. Information and Communication Technology, which is flexible and
comes to meet the dynamics of the market.
Alternatively speaking, the virtual organisation is a social network in which all the
horizontal and vertical boundaries are removed. In this sense, it is a boundary less
organisation. It consists of individual’s working out of physically dispersed work places, or
even individuals working from mobile devices and not tied to any particular workspace.
The ICT is the backbone of virtual organisation.
Virtual Organizational Structure contd.
Organisations may have several options like flexi-time, part-time work, job-sharing, and
home-based working.
• Telecommuters
• Outsourcing employees/competencies
• Completely virtual
Telecommuters:
These companies have employees who work from their homes.
Outsourcing Employees/Competencies:
These companies are characterised by the outsourcing of all/most core competencies.
Areas for outsourcing include marketing and sales, human resources, finance, research
and development, engineering, manufacturing, information system, etc.
Completely Virtual:
These companies metaphorically described as companies without walls that are tightly
linked to a large network of suppliers, distributors, retailers and customers
Staffing
After planning and organizing the next function of management is ‘Staffing’ .It is
important to have a good organization structure, but it is even more important to fill the
jobs with the right people. Filling and keeping the position provided for by the
organization structure with right people at the right place is the staffing phase of the
management function. All the managers have a responsibility for staffing.
The staffing function deals with the human elements of management. The staffing
function has assumed great importance these days because of rapid advancement of
technology, increasing size of organizations and complex behaviour of human beings.
• Promotion and Transfers- Promotion refers to being placed at a higher job position
with more salary, job satisfaction and responsibility. On the basis of feedback report
of employees performance they are given promotion and other opportunities Transfer
means shifting of an employees from one job to another or one department to other.
Transfer may take place due to change in organization structure or changes in the
volume of work.
Directing
Directing is concerned with the initiation of organized action and stimulating people to
work. It involves issuance of orders, instructions and leading and motivating the
employees to execute them. Directing is the inter-personal aspect of management which
deals directly with influencing, guiding, supervising and motivating the subordinates for
the accomplishment of pre-determined objectives. Planning, organizing, staffing are
merely preparations for doing the work but the work actually initiates through directing
function.
The manager must stimulate action by giving direction to his subordinates through orders
and also supervise their work to ensure that the plans and policies achieve the desired
actions and results.
Elements of Directing
• Directing deals with inter-personal relations. It is the doing or implementing phase of
management. Hence it is also called management-in-action. All the activities related
to directing can be categorized into 4 different elements of directing. They are:
• Supervision
• Motivation
• Communication
• Leadership.
Supervision
It refers to the process where the activities of workers are guided towards the
pre-determined objectives. It involves directly overseeing the work of workers. It
ensures that work is carried out efficiently and towards the desired objectives through
effective supervision. Good supervision helps in maintaining harmony and unity among
workers.
• Guides workers and provides them support. He ensures that workers work with harmony and
unity. In case of internal differences, the manager tries to sort it out and bring about a
feasible solution.
• Serves as the link of communication between the manager and workers. While on one hand,
he communicates the information and ideas of the management to workers, on the other
hand, he communicates the problems of workers to managers. In other words, the
management and workers communicate through the supervisor.
• Responsibility of the supervisor to ensure that the work is carried out efficiently and smoothly
and that the set targets are met.
• The knowledge or skill along with on-job training as required by workers for various activities
is provided by the supervisor.
• A good supervisor successfully influences employees and sets a high standard of morale
among workers.
Motivation
Motivation means incitement or inducement to act or move. In the context of an
organisation, it means the process of making subordinates to act in a desired manner to
achieve certain organisational goals.
Features of Motivation:
• Motivation is not a simple process: Different individuals have different needs and
expectations. Hence, all employees get motivated for different reasons at different
times. Some employees get motivated by appreciation, whereas some employees get
motivated by appraisals.
• According to Maslow, the needs of an individual can be classified into five categories
which can be arranged in a hierarchical order.
• With the knowledge of these needs, a manager can better understand the behaviour
of employees in the organisation and accordingly provide appropriate motivation.
Hierarchy of needs as given by Maslow
1. Basic Physiological Needs: These needs are the most basic needs in the need hierarchy. It
comprises needs which are essential for survival and sustenance. For example, the need for
food, clothing and shelter. In terms of an organisation, the requirement of a basic salary is a
basic physiological need.
2. Security Needs: An individual requires physical as well as emotional security. For example,
an employee wishes for job security and stability in income.
4. Esteem Needs: It comprises elements such as respect, dignity and recognition in the peer
group.
5. Self-Actualisation Needs: Every individual wishes to achieve what he aims or aspires. For an
employee, it includes factors such as recognition of work, autonomy and growth. It must
however be noted that it may happen that the needs of an individual are not in the exact
order of the hierarchy. Nevertheless, a good understanding of needs helps managers in using
effective motivation
Communication
It is the process of passing information, view point, facts, ideas , opinion and
understanding from one person to another .It is a two way process and is complete when
there is some response from the receiver of information. Communication may take
several forms like order, instructions, report, suggestion etc.
Communication plays key role in the success of a manager. How much professional
knowledge and intelligence a manager possesses becomes immaterial if he is not able to
communicate effectively with his subordinates and create understanding in them.
Directing abilities of a manager mainly depend upon his communication skills. That is why
organisation always emphasise on improving communication skills of managers as well as
employees.
Importance of Communication
• Acts as basis of coordination: Communication acts as basis of coordination. It
provides coordination among departments, activities and persons in the organisation.
i. Premature evaluation: Some times people evaluate the meaning of message before the
sender completes his message. Such premature evaluation may be due to pre-conceived
notions or prejudices
ii. Lack of attention: The preoccupied mind of receiver and the resultant non-listening of
message acts as a major psychological barrier. For instance, an employee explains about his
problems to the boss who is pre-occupied with an important file before him. The boss does
not grasp the message and the employee is disappointed.
Barriers to Effective Communication contd.
iii. Loss by transmission and poor retention: When communication passes through
various levels, successive transmissions of the message results in loss of, or transmission
of inaccurate information. This is more so in case of oral communication. Poor retention
is another problem.
iv) Distrust: Distrust between communicator and communicate acts as a barrier. If the
parties do not believe each other, they can not understand each others message in its
original sense.
(iii) Status: Status of superior may create psychological distance between him and his
subordinates. A status conscious manager also may not allow his subordinates to express
their feelings freely.
• Convey things of help and value to listeners: While conveying message to others, it is
better to know the interests and needs of the people with whom you are
communicating.
• Be a good listener: Manager should be a good listener. Patient and attentive listening
solves half of the problems.
Leadership
• Leadership may be defined as the process by which a manager guides and influences
the work of his subordinates. The success of every enterprise is dependent upon the
quality of its leadership.
(i) Leadership influences the behaviour of people and makes them to positively
contribute their energies for the benefit of the organisation.
(ii) A leader maintains personal relations and helps followers in fulfilling their needs. He
provides needed confidence, support and encouragement and thereby creates
congenial work environment.
(iii) Leader plays a key role in introducing required changes in the organisation. He
persuades, clarifies and inspires people to accept changes whole-heartedly.
(iv) A leader handles conflicts effectively and does not allow adverse effects resulting
from the conflicts.
Qualities of Good Leaders
• (i) Physical features: Physical features like height, weight, health, appearance
determine the physical personality of an individual. It is believed that good physical
features attract people.
• (ii) Knowledge: A good leader should have required knowledge and competence. Only
such person can instruct subordinates correctly and influence them.
• (iii) Integrity: A leader should posses high level of integrity and honesty. He should be
a role model to others regarding the ethics and values.
• (iv) Initiative: A leader should have courage and initiative. He should not wait for
opportunities come to his way, rather he should grab the opportunity and use it to the
advantage of organisation.
Qualities of Good Leaders contd..
• (v) Communication skills: A leader should be a good communicator. He should have the
capacity to clearly explain his ideas and make the people to understand his ideas. He
should be not only good speaker but a good listener, teacher, counsellor and
persuader.
• (vii) Self Confidence: A leader should have high level of self confidence. He should not
loose his confidence even in most difficult times. In fact, if the leader lacks self
confidence, he can not provide confidence to his followers.
• (ix) Social skills: A leader should be sociable and friendly with his colleagues and
followers. He should understand people and maintain good human relations with them.
Leadership Styles
• There are several bases for classifying leadership styles. The most popular
classification of leadership styles is based on the use of authority. Depending on the
use of authority, there are three basic styles of leadership: (i) Autocratic (ii)
Democratic, and (iii) Laissez-faire
• (i) Autocratic or Authoritarian leader An autocratic leader gives orders and expects his
subordinates to obey those orders. If a manager is following this style, then
communication is only one-way with the subordinate only acting according to the
command given by the manager. This leader is dogmatic i.e., does not change or wish
to be contradicted. His following is based on the assumption that reward or
punishment both can be given depending upon the result. This leadership style is
effective in getting productivity in many situations like in a factory where the
supervisor is responsible for production on time and has to ensure labour productivity.
Quick decision-making is also facilitated
Types of Autocratic Leadership
► Strict Autocrats-negative
► Benevolent Autocrats-positive
► Incompetent Autocrats
Leadership Styles contd..
• ii)Democratic or Participative leader A democratic leader will develop action plans and
makes decisions in consultation with his subordinates. He will encourage them to participate
in decision-making. This kind of leadership style is more common now-a days, since leaders
also recognise that people perform best if they have set their own objectives. They also need
to respect the other’s opinion and support subordinates to perform their duties and
accomplish organisational objectives. They exercise more control by using forces within the
group.
• iii) Laissez faire or Free-rein leader Such a leader does not believe in the use of power
unless it is absolutely essential. The followers are given a high degree of independence to
formulate their own objectives and ways to achieve them. The group members work on their
own tasks resolving issues themselves. The manager is there only to support them and supply
them the required information to complete the task assigned. At the same time, the
subordinate assumes responsibility for the work to be performed. Depending upon the
situation a leader may choose to exercise a combination of these styles when required. Even
a laissez faire leader would have certain rules to be followed.
Leadership Theories
► The great man theory- The great man theory of leadership states that excellent leaders are
born, not developed. A popular concept in the 19th century, this theory states that leadership is
an inherent quality. This type of leader often possesses the natural attributes of intelligence,
courage, confidence, intuition and charm, among others.
► The trait theory-assume that people inherit certain qualities and traits that make them better
suited to leadership. For example, traits like extroversion, self-confidence, and courage are all
traits that could potentially be linked to great leaders.
► The behavioural theory-Behavioral theories of leadership are based upon the belief that great
leaders are made, not born. Consider it the flip-side of the Great Man theories. This leadership
theory focuses on the actions of leaders, not on mental qualities or internal states. According to
this theory, people can learn to become leaders through teaching and observation.
Leadership Theories contd.
► Situational Theory- It propose that leaders choose the best course of action based upon
situational variables. Different styles of leadership may be more appropriate for certain types of
decision-making. For example, in a situation where the leader is the most knowledgeable and
experienced member of a group, an authoritarian style might be most appropriate. In other
instances where group members are skilled experts, a democratic style would be more
effective.
► Contingency theory- According to this theory, good leaders are able to assess the needs of their
followers, take stock of the situation, and then adjust their behaviours accordingly. This style is
best in all situations.
Leadership Theories contd.
► The transactional theory or management theory- These theories are based on a system of
rewards and punishments. Managerial theories are often used in business; when employees are
successful, they are rewarded and when they fail, they are reprimanded or punished.
• It is the means of motivation and developing managers: Managers who are personally
motivated to work can also direct others to work. Managers develop their skills and
competence. Motivation, leadership and communication help in bringing people
together. This is beneficial for both the employees and organisation. Direction, thus,
prepares future managers
Importance of Directing contd.
• Behavioural satisfaction: Since direction involves human behaviour and psychology,
employees feel behaviourally satisfied and personally inspired to achieve organizational
goals.
• Facilitates change: Direction helps in introducing change in the organization structure and
adapting the organization structure to external environment. People are not easily receptive
to changes. Direction helps in changing attitude of people in a positive way. Managers
through effective direction makes them a part of change process.
• 2) Facilitates decision making- The process of control is complete only when corrective
measures have been taken. This requires taking a right decision as to what type of
follow up action is to be taken.
• 3) Facilitates discipline and order – The existence of control system has a positive
impact on the behaviour of the employees. They are cautious while performing their
duties as they know they are being observed by their superiors.
• 4) Taking remedial action-Once the causes and extent of deviation are known, the
manager has to detect those errors and take remedial measures so that these
deviations don’t occur again. Remedial or corrective actions can be re planning of
standards, classification of duties, training of workers etc.
Stages of Control
► Feedforward Control- It monitors input into a process to determine whether the
inputs are as planned.
► Con-Current Control- It is exercised during the operation of a program. It
provides basis for making adjustments while the programme is still in operation.
► Feedback Control- It is based on the measurement of the results of an action.