Fundamental functions of

management
 Who Are Managers And
Where Do They Work?
 Organization
 A systematic arrangement of people brought together
to accomplish some specific purpose; applies to all
organizations.
 Where managers work (manage).
 Common Characteristics of Organizations
 Distinct purpose and goals
 People
 Systematic structure
 People Differences
 Operatives
 People who work directly on a job or task and have no
responsibility for overseeing the work of others.

 Managers
 Individuals in an organization who direct the activities
of others.
 Identifying Managers
 First-line Managers
 Supervisors responsible for directing the day-to-day
activities of operative employees

 Middle Managers
 Individuals at levels of management between the
first-line manager and top management

 Top Managers
 Individuals who are responsible for making decisions
about the direction of the organization and
establishing policies that affect all organizational
members
 How Do We Define
Management?
 Management
 The process of getting things done, effectively and
efficiently, through and with other people
 Efficiency
 Doing the thing correctly; refers to the relationship
between inputs and outputs; seeks to minimize resource
costs
 Effectiveness
 Doing the right things; goal attainment
 Processes (Management)
There are four fundamental function of Management

 Planning
 Includes defining goals, establishing strategy, and
developing plans to coordinate activities

 Organizing
 Includes determining what tasks to be done, who is to
do them, how the tasks are to be grouped, who
reports to whom, and where decisions are to be made
 Processes (Management)
 Leading
 Includes motivating employees, directing the
activities of others, selecting the most effective
communication channel, and resolving conflicts

 Controlling
 The process of monitoring performance, comparing it
with goals, and correcting any significant deviations
 Process (Management) activities

Process (management):
planning, organizing,
leading, and controlling
Difference between
 Planning
Planning is the function of management that involves setting objectives
and determining a course of action for achieving those objectives.
Planning requires that managers be aware of environmental conditions
facing their organization and forecast future conditions. It also requires
that managers be good decision makers.
Planning is a process consisting of several steps. The process begins with
environmental scanning which simply means that planners must be aware
of the critical contingencies facing their organization in terms of economic
conditions, their competitors, and their customers. Planners must then
attempt to forecast future conditions. These forecasts form the basis for
planning.
Planners must establish objectives, which are statements of what needs to
be achieved and when. Planners must then identify alternative courses of
action for achieving objectives. After evaluating the various alternatives,
planners must make decisions about the best courses of action for
achieving objectives. They must then formulate necessary steps and
ensure effective implementation of plans. Finally, planners must constantly
evaluate the success of their plans and take corrective action when
necessary.
 Planning(cont’d)
There are many different types of plans and planning.

1.Strategic planning involves analyzing competitive opportunities and threats,

as well as the strengths and weaknesses of the organization, and then
determining how to position the organization to compete effectively in their
environment. Strategic planning has a long time frame, often three years or
more. Strategic planning generally includes the entire organization and
includes formulation of objectives. Strategic planning is often based on the
organization’s mission, which is its fundamental reason for existence. An
organization’s top management most often conducts strategic planning.

2.Tactical planning is intermediate-range (one to three years) planning that is

designed to develop relatively concrete and specific means to implement the
strategic plan. Middle-level managers often engage in tactical planning.

3.Operational planning generally assumes the existence of organization-wide

or subunit goals and objectives and specifies ways to achieve them.
Operational planning is short-range (less than a year) planning that is
designed to develop specific action steps that support the strategic and
tactical plans.
 Organizing
• Organizing is the function of management that involves developing an
organizational structure and allocating human resources to ensure the
accomplishment of objectives. The structure of the organization is the
framework within which effort is coordinated.
• The structure is usually represented by an organization chart, which
provides a graphic representation of the chain of command within an
organization. Decisions made about the structure of an organization
are generally referred to as organizational design decisions.
• Organizing also involves the design of individual jobs within the
organization. Decisions must be made about the duties and
responsibilities of individual jobs, as well as the manner in which the
duties should be carried out. Decisions made about the nature of jobs
within the organization are generally called “job design” decisions.
 Organizing (cont’d)
• Organizing at the level of the organization involves deciding how best to
departmentalize, or cluster, jobs into departments to coordinate effort
effectively. There are many different ways to departmentalize, including
organizing by function, product, geography, or customer. Many larger
organizations use multiple methods of departmentalization.

• Organizing at the level of a particular job involves how best to design

individual jobs to most effectively use human resources. Traditionally, job
design was based on principles of division of labor and specialization,
which assumed that the more narrow the job content, the more proficient
the individual performing the job could become. However, experience has
shown that it is possible for jobs to become too narrow and specialized. For
example, how would you like to screw lids on jars one day after another, as
you might have done many decades ago if you worked in company that
made and sold jellies and jams? When this happens, negative outcomes
result, including decreased job satisfaction and organizational commitment,
increased absenteeism, and turnover.
 Leading(Actuating)
Leading involves the social and informal sources of influence that you use
to inspire action taken by others. If managers are effective leaders, their
subordinates will be enthusiastic about exerting effort to attain
organizational objectives.
The behavioral sciences have made many contributions to understanding
this function of management. Personality research and studies of job
attitudes provide important information as to how managers can most
effectively lead subordinates. For example, this research tells us that to
become effective at leading, managers must first understand their
subordinates’ personalities, values, attitudes, and emotions.
Studies of motivation and motivation theory provide important information
about the ways in which workers can be energized to put forth productive
effort. Studies of communication provide direction as to how managers
can effectively and persuasively communicate. Studies of leadership and
leadership style provide information regarding questions, such as, “What
makes a manager a good leader?” and “In what situations are certain
leadership styles most appropriate and effective?”
 Leading is divided into
Staffing & Directing
Staffing
It is the function of manning the organization structure and keeping
it manned. Staffing has assumed greater importance in the recent years due to
advancement of technology, increase in size of business, complexity of human
behavior etc. The main purpose o staffing is to put right man on right job i.e.
square pegs in square holes and round pegs in round holes.

According to Kootz & O’Donell, “Managerial function of staffing involves

manning the organization structure through proper and effective selection,
appraisal & development of personnel to fill the roles designed un the
structure”. Staffing involves:
Manpower Planning (estimating man power in terms of searching, choose the
person and giving the right place).

Recruitment, Selection & Placement.

Training & Development.
Remuneration.
Performance Appraisal.
Promotions & Transfer.
 Leading is divided into
Staffing & Directing
Directing
It is that part of managerial function which actuates the
organizational methods to work efficiently for achievement of organizational
purposes. It is considered life-spark of the enterprise which sets it in motion
the action of people because planning, organizing and staffing are the mere
preparations for doing the work. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising,
motivating sub-ordinate for the achievement of organizational goals. Direction
has following elements:

1.Supervision- implies overseeing the work of subordinates by their superiors.

It is the act of watching & directing work & workers.
2.Motivation- means
inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
3.Leadership- may be defined as a process by which manager guides
and influences the work of subordinates in desired
direction.
4.Communications- is the process of passing information,
experience, opinion etc from one person to another. It is a bridge of
understanding.
 Controlling
Controlling involves ensuring that performance does not deviate from
standards. Controlling consists of three steps, which include (1) establishing
performance standards, (2) comparing actual performance against
standards, and (3) taking corrective action when necessary. Performance
standards are often stated in monetary terms such as revenue, costs, or
profits but may also be stated in other terms, such as units produced,
number of defective products, or levels of quality or customer service.

The measurement of performance can be done in several ways, depending on

the performance standards, including financial statements, sales reports,
production results, customer satisfaction, and formal performance
appraisals. Managers at all levels engage in the managerial function of
controlling to some degree.
 Controlling(cont’d)
The managerial function of controlling should not be confused with control in
the behavioral or manipulative sense. This function does not imply that
managers should attempt to control or to manipulate the personalities,
values, attitudes, or emotions of their subordinates. Instead, this function of
management concerns the manager’s role in taking necessary actions to
ensure that the work-related activities of subordinates are consistent with
and contributing toward the accomplishment of organizational and
departmental objectives.
 Controlling(cont’d)
Effective controlling requires the existence of plans, since planning provides
the necessary performance standards or objectives. Controlling also requires a
clear understanding of where responsibility for deviations from standards lies.
Two traditional control techniques are budget and performance audits. An audit
involves an examination and verification of records and supporting documents.
A budget audit provides information about where the organization is with
respect to what was planned or budgeted for, whereas a performance audit
might try to determine whether the figures reported are a reflection of actual
performance. Although controlling is often thought of in terms of financial
criteria, managers must also control production and operations processes,
procedures for delivery of services, compliance with company policies, and
many other activities within the organization.
 Is The Manager’s Job
Universal?
 Level in the Organization
 Do managers manage differently based on where they
are in the organization?

 Profit versus Not-for-profit

 Is managing in a commercial enterprise different than
managing in a non-commercial organization?

 Size of Organization
 Does the size of an organization affect how managers
function in the organization?
 Is The Manager’s Job
Universal? (cont’d)
 Management Concepts and National Borders
 Is management the same in all economic, cultural,
social and political systems?

 Making Decisions and Dealing with Change

 Do managers all make decisions and deal with
change in the same ways?
Specific Skills for Managers
 Behaviors related to a manager’s effectiveness:
 Controlling the organization’s environment and its
resources.
 Organizing and coordinating.
 Handling information.
 Providing for growth and development.
 Motivating employees and handling conflicts.
 Strategic problem solving.
 How Much Importance Does The
Marketplace Put On Managers?
 Good (effective) managerial skills are a scarce
commodity.
 Managerial compensation packages are one measure
of the value that organizations place on managers.
 Management compensation reflects the market forces
of supply and demand.
 Management superstars, like superstar athletes in
professional sports, are wooed with signing bonuses,
interest-free loans, performance incentive packages, and
guaranteed contracts.
Conclusion
Fundamental function of
Management
 Process (Management)
 Planning
 Includes defining goals, establishing strategy, and
developing plans to coordinate activities

 Organizing
 Includes determining what tasks
to be done, who is to do them,
how the tasks are to be
grouped, who reports to
whom, and where
decisions are to be made

Copyright © 2004 Prentice

1–26 Hall, Inc. All rights
reserved.
 Process (Management)
 Leading
 Includes motivating employees, directing the
activities of others, selecting the most effective
communication channel, and resolving conflicts

 Controlling
 The process of monitoring performance,
comparing it with goals, and
correcting any significant
deviations

Copyright © 2004 Prentice

1–27 Hall, Inc. All rights
reserved.