MANAGERIAL FUNCTIONS

CHAPTER-1
 Management…?

Management is the art of getting things done through and

with people in formally organized groups

-koontz

Management is the art of knowing what you want to do

and seeing that it is done is best and cheapest way

-F.W Taylor

Management is to manage is to forecast and plan, to

organize, to command, to coordinate and control

-Henry Fayol
◾ According to Harold Koontz, “Management is
an art of getting things done through and with
the people in formally organized groups. It is an
art of creating an environment in which people
can perform and individuals and can co-operate
towards attainment of group goals”.
◾ According to F.W. Taylor, “Management is
an art of knowing what to do, when to do and
see that it is done in the best and cheapest
way”.
MEANING OF MANAGEMENT

Management is the process of planning and organizing the resources and

activities of a business to achieve specific goals in the most effective and efficient

manner possible.

Efficiency in management refers to the completion of tasks correctly and at

minimal costs. Effectiveness in management relates to the completion of tasks

within specific timelines to yield tangible results.

◾ It helps in Achieving Group Goals
◾ Optimum Utilization of Resources
◾ Reduces Costs
◾ Establishes Sound Organization
◾ Establishes Equilibrium
◾ Helps in personal development
◾ Essentials for Prosperity of Society
◾ Management is getting things done through
people
◾ Management is goal oriented process
◾ Management is Pervasive
◾ Management is Multidimensional (3 M’s)
◾ Management is a continuous process
◾ Management is a group activity
◾ Management is a dynamic function
◾ Intangible
CHARACTERISTICS OF MANAGEMENT

Management is goal oriented process

An essential part of management is to combine individual efforts and to direct

them towards achieving the organisational goal. These goals differ from

organisation to organisation.

Management is Universal

Management is a universal phenomenon. The use of management is not only

restricted to business firms. It is also applicable in profit making and non-profit

making organisation.
Management is multidimensional
Management does not mean one single activity but it also include
three main activities:
-Management of work
-Management of people
-Management of operations
Management is a dynamic function

Management has to make changes in goal, objectives and other activities

according to the changes taking place in the external environment such as social,

economical, technical and political environment.

Management is intangible

Management function cannot be physically seen but its presence can be

felt. Management consists of ideologies, policies and human interaction. Good

management helps improve a company's target achievement ratios, employee

gratification levels and overall ease in the company's operation.

Management is a continuous process
Management is a continuous or never ending function. All the
functions of management are performed continuously by all managers at all
time.
Management is a group activity
Management always refers to a group of people involved in
managerial activities. The management functions cannot be performed in
isolations . Each individual performs his/her role and then only
management functions can be executed.
Principles of Management
1. Division of Work
 In practice, employees are specialized in different areas and they have different skills. According
to Fayol specialization promotes efficiency of the workforce and increases productivity.
 In addition, the specialization of the workforce increases their accuracy and speed. This principle
is applicable to both technical and managerial activities.
2. Authority and Responsibility
 In order to get things done in an organization, management has the authority to give orders to
the employees. Of course with this authority comes responsibility.
 The accompanying power or authority gives the management the right to give orders to the
subordinates. The responsibility can be traced back from performance and it is therefore
necessary to make agreements about this. In other words, authority and responsibility go
together.
3. Discipline
 This third principle is about obedience.
 It is often a part of the core values of a mission and vision in the form of good conduct
and respectful interactions. This management principle is essential and is seen as the oil to make
the engine of an organization run smoothly.
4. Unity of Command
 The management principle ‘Unity of command’ means that an individual employee
should receive orders from one manager and that the employee is answerable to that
manager.
 By using this principle, the responsibility for mistakes can be established more easily.
5. Unity of Direction
 This principle of management is all about focus and unity. All employees deliver the
same activities that can be linked to the same objectives.
 All activities must be carried out by one group that forms a team. These activities must
be described in a plan of action. The manager is ultimately responsible for this plan and
he monitors the progress of the defined and planned activities.
 Focus areas are the efforts made by the employees and coordination.
6. Subordination of Individual Interest
 There are always all kinds of interests in an organization. Personal interests are
subordinate to the interests of the organization (ethics). T
 The primary focus is on the organizational objectives and not on those of the individual.
This applies to all levels of the entire organization, including the managers.
7. Remuneration
 This principle of management argues that the remuneration should be sufficient
to keep employees motivated and productive.
 There are two types of remuneration namely non-monetary (a compliment,
more responsibilities, credits) and monetary (compensation, bonus or other financial
compensation). Ultimately, it is about rewarding the efforts that have been made.
8. The Degree of Centralization

9. Scalar Chain

10. Order
Employees in an organization must have the right resources at their disposal so that they
can function properly in an organization. In addition to social order (responsibility of the
managers) the work environment must be safe, clean and tidy.
11. Equity
Employees must be treated kindly and equally. Employees must be in the right place in the
organization to do things right. Managers should supervise and monitor this process and
they should treat employees fairly and impartially.
12. Stability of Tenure of Personnel
This principle represents deployment and managing of personnel and this should be in
balance with the service that is provided from the organization. Management strives to
minimize employee turnover and to have the right staff in the right place. Focus areas such
as frequent change of position and sufficient development must be managed well.
13. Initiative
Employees should be allowed to express new ideas. This encourages interest and
involvement and creates added value for the company. Employee initiatives are a source of
strength for the organization.
14. Esprit de Corps
This stands for striving for the involvement and unity of the employees. Managers are
responsible for the development of morale in the workplace; individually and in the area of
communication. Esprit de corps contributes to the development of the culture and creates
an atmosphere of mutual trust and understanding.
◾ According to Henry Fayol, “To manage is to
forecast and plan, to organize, to command,
& to control”.
◾ Whereas Luther Gullick has given a keyword
’POSDCORB’ where P stands for Planning, O
for Organizing, S for Staffing, D for
Directing, Co for Co-ordination, R for
reporting & B for Budgeting. But the most
widely accepted are functions of
management given by KOONTZ and
O’DONNEL i.e. Planning,
◾ P - Planning
◾ O - Organizing
◾ S - Staffing
◾ D - Directing
◾ CO - Controlling
◾ R - Reporting
◾ B - Budgeting
1. Planning
Planning is the first step of management function. It involves the
determinants of what is to be done? How is to be done? It is a predetermine
course of action. It helps managers to anticipate problems before they
actually arise.
2. Organizing
Organizing is the process of assigning responsibilities and authorities to
employees. Manager should identify the task and activities and allocate
them in such a way so that there should be no discrepancies between work
and employees, group of people or departments.
3. Staffing
Staffing includes the selection of proper personnel for proper job. It also
includes the selection and recruitment, promotion, transfer and training of
an employee. It also take care the requirement of manpower for future.
4. Directing
Directing includes the work guiding and supervising subordinates. Each and
every manager is responsible for his / her department and he/ she should
provide necessary guidelines to his/ her subordinates.
.
5. Controlling
Consist in verifying in whether everything in undertaking
proceeds in conformity with the plans. Controlling include
setting standards and comparing the actual performance with
standards performance
6. Reporting
It is important element of control. It includes daily follow up of
activities with help of reports which are submitted by
subordinates to his/ her superior. Reporting keeps him/ her
informed with day to day activities.
7. Budgeting
Budget is an estimate of future needs covering all the activities
of an enterprise for a definite period of time. A budget is
prepared for each separate activity of business. This is done to
control the expenses of organizations within certain limit.
◾ The number of levels in management increases
when the size of the business and work force
increases and vice versa. The level of
management determines a chain of command,
the amount of authority & status enjoyed by any
managerial position.
◾ The levels of management can be classified in
three broad categories:
◾ Top level / Administrative level
◾ Middle level / Executory
◾ Low level / Supervisory / Operative / First-line
managers
I. On the Basis of Levels of Management
II. On the basis of Nature

Types of managers
• Line managers are responsible for work activities
that directly affect organization’s outputs
• Staff managers use technical expertise to advise and
support the efforts of line workers
• Functional managers are responsible for a single
area of activity
• General managers are responsible for more complex
units that include many functional areas
• Administrators work in public and nonprofit
organizations
◾ The top management is the ultimate source of authority and it manages
goals and policies for an enterprise. It devotes more time on planning
and coordinating functions.

◾ The role of the top management can be summarized as follows -

 Top management lays down the objectives and broad policies of the
enterprise.
 It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
 It prepares strategic plans & policies for the enterprise.
 It appoints the executive for middle level i.e. departmental managers.
 It controls & coordinates the activities of all the departments.
 It is also responsible for maintaining a contact with the outside world.
 It provides guidance and direction.
 The top management is also responsible towards the shareholders for the
performance of the enterprise.
◾ They are responsible to the top management for the functioning of their
department. They devote more time to organizational and directional functions.
In small organization, there is only one layer of middle level of management but
in big enterprises, there may be senior and junior middle level management.

Their role can be emphasized as -

◾ They execute the plans of the organization in accordance with the policies and
directives of the top management.
◾ They make plans for the sub-units of the organization.
◾ They participate in employment & training of lower level management.
◾ They interpret and explain policies from top level management to lower level.
◾ They are responsible for coordinating the activities within the division or
department.
◾ It also sends important reports and other important data to top level
management.
◾ They evaluate performance of junior managers.
◾ They are also responsible for inspiring lower level managers towards better
performance.
◾ In other words, they are concerned with direction and controlling function of management.
Their activities include -
 Assigning of jobs and tasks to various workers.
 They guide and instruct workers for day to day activities.
 They are responsible for the quality as well as quantity of production.
 They are also entrusted with the responsibility of maintaining good relation in the
organization.
 They communicate workers problems, suggestions, and recommendatory appeals etc
to the higher level and higher level goals and objectives to the workers.
 They help to solve the grievances of the workers.
 They supervise & guide the sub-ordinates.
 They are responsible for providing training to the workers.
 They arrange necessary materials, machines, tools etc for getting the things done.
 They prepare periodical reports about the performance of the workers.
 They ensure discipline in the enterprise.
 They motivate workers.
 They are the image builders of the enterprise because they are in direct contact with the
workers.
◾ Management expert Professor Henry
Mintzberg has argued that a manager’s work
can be brought down to 10 common roles.
According to Mintzberg, these roles, or expectations
for a manager’s behavior, fall into three categories:

1. informational (managing by information),

2. interpersonal (managing through people),
3. and decisional (managing through action).
Category Roles
Figurehead
Interpersonal Leader
Liaison
Monitor
Informational Disseminator
Spokesperson
Entrepreneur
Disturbance Handler
Decisional
Resource Allocator
Negotiator
Interpersonal Figurehead Perform social Greet visitors, sign legal
(managing and legal documents, attend
through people) duties, act as ribbon cutting
symbolic ceremonies,
leader/Sour host receptions, etc.
ce of
Inspiration

Leader Direct and Includes almost all

motivate interactions with
subordinates, subordinates
select and train
employees

Liaison Establish and Business

maintain correspondence,
contacts within participation in meetings
and outside with representatives
the of other divisions or
organization organizations.
 Category Role Activity Examples

Informational Monitor Seek and acquire Scan/read trade

(managing by work-related press, periodicals, reports;
information) information attend seminars and
training; maintain personal
contacts

Disseminator Communicate/ Send memos and reports;

disseminate inform staffers and
information to subordinates of decisions
others within the
organization

Spokesperson Communicate/tra Pass on memos, reports and

nsmit information informational materials;
to outsiders participate in
conferences/meetings and
report progress
13
Decisional Entrepreneur Identify new Implement innovations;
(managing ideas and initiate Plan for the future
through action) improvement
projects

Disturbance Deals with Settle conflicts between

Handler disputes or subordinates; Choose
problems and strategic alternatives;
takes corrective Overcome crisis
action situations

Resource Decide where to Draft and approve of

apply plans, schedules,
Allocator resources budgets; Set priorities

Negotiator Defends Participates in and

directs negotiations
business within team,
department, and
interests organization
1. Technical Skills
Technical skills involve skills that give the managers the ability and
the knowledge to use a variety of techniques to achieve their
objectives. These skills not only involve operating machines and
software, production tools, and pieces of equipment but also the
skills needed to boost sales, design different types of products and
services, and market the services and the products.
2. Conceptual Skills
These involve the skills managers present in terms of the
knowledge and ability for abstract thinking and formulating
ideas. The manager is able to see an entire concept, analyze and
diagnose a problem, and find creative solutions. This helps the
manager to effectively predict hurdles their department or the
business as a whole may face.
3. Human or Interpersonal Skills
The human or the interpersonal skills are the skills that present the managers’
ability to interact, work or relate effectively with people. These skills enable the
managers to make use of human potential in the company and motivate the
employees for better results.
Most essential Management skills:
• Planning
• Communication
• Decision-Making
• Delegation
• Problem Solving
• Motivating
 Modern Organization Structure

1. Hierarchical org structure

The pyramid-shaped organizational

chart we referred to earlier is known
as a hierarchical org chart. It’s the
most common type of organizational
structure––the chain of command
goes from the top (e.g., the CEO or
manager) down (e.g., entry-level and
low-level employees) and each
employee has a supervisor.
2. Functional org structure

A functional org structure starts with positions with the highest levels of
responsibility at the top and goes down from there. Primarily, though,
employees are organized according to their specific skills and their
corresponding function in the company. Each separate department is
managed independently
3. Horizontal or flat org
structure
A horizontal or flat organizational structure fits companies with few levels
between upper management and staff-level employees. Many start-up
businesses use a horizontal org structure before they grow large enough to
build out different departments, but some organizations maintain this
structure since it encourages less supervision and more involvement from all
employees.
 4. Divisional org structure
(Market/Product/Geography)

A) Also be called as Market-based organizational Structure. In divisional organizational

structures, a company’s divisions have control over their own resources, essentially
operating like their own company within the larger organization. Each division can have its
own marketing team, sales team, IT team, etc. This structure works well for large
companies as it empowers the various divisions to make decisions without everyone having
to report to just a few executives.
B) Product-based Organization Structure
Divisions are separated by product line. For example, a tech company might
have a division dedicated to its cloud offerings, while the rest of the
divisions focus on the different software offerings––e.g., Adobe and its
creative suite of Illustrator, Photoshop, InDesign, etc.
C) Geographic divisional org structure
Divisions are separated by region, territories, or districts, offering more
effective localization and logistics. Companies might establish satellite
offices across the country or the globe in order to stay close to their
customers.
 5. Matrix org structure

A matrix organizational chart looks like a grid, and it shows cross-functional

teams that form for special projects. For example, an engineer may regularly
belong to the engineering department (led by an engineering director) but work on a
temporary project (led by a project manager). The matrix org chart accounts for
both of these roles and reporting relationships.
 6. Team-based org structure

It’ll come as no surprise that a team-based organizational structure groups

employees according to Team. A team organizational structure is meant to
disrupt the traditional hierarchy, focusing more on problem solving,
cooperation, and giving employees more control.
 7. Network org structure

These days, few businesses have all

their services under one roof, and
juggling the multitudes of vendors,
subcontractors, freelancers, offsite
locations, and satellite offices can get
confusing. A network organizational
structure makes sense of the spread of
resources. It can also describe an
internal structure that focuses more on
open communication and relationships
rather than hierarchy.
Ethics In Management

Ethics in management refers to a company’s social responsiveness. It is ‘the

discipline that deals with what is good and evil, or right and wrong, or moral
responsibility and duty.’
In other words, ethics in management can be defined as a set of moral
principles.
Principles that govern the actions of a person or a group. It is a norm of
behaviour that guides leaders and managers in their day-to-day
actions. Company core values shape business ethics. And the establishment of
an ethical culture relies on leadership. It is particularly true of leaders who
display integrity, unity, and respect.
Ethical Behaviours
Benefits of Ethics in Management

1. It’s a Part of Our Developing Society

2. It Helps Maintain Morale During Tough Times

3. It Supports Employee Growth

4. It Improves Productivity

5. It Promotes Goodwill
“A commitment to improve community well-being through discretionary
business practices and contributions of corporate resources”.
CSR is the sum of:

Economic Responsibilities (Make a profit)

Legal Responsibilities (Obey the law)

Ethical Responsibilities (Be ethical)

Philanthropic Responsibilities (Good corporate citizen)

The company should mandatorily spend every financial year,

minimum of 2% of the average net profits made during the 3
immediately preceding financial years as per CSR policy.
Corporate Social Responsibility

Corporate social responsibility (CSR) is a type of business self-regulation

with the aim of being socially accountable. Corporate CSR initiatives strive
to positively contribute to the public, the economy or the environment.

The term corporate social responsibility (CSR) refers to practices and

policies undertaken by corporations that are intended to have a positive
influence on the world. The key idea behind CSR is for corporations to
pursue other pro-social objectives, in addition to maximizing profits.
Examples of common CSR objectives include minimizing environmental
externalities, promoting volunteerism among company employees, and
donating to charity.
Advantages of CSR

1. It boosts value and profitability.

2. It improves company reputation.

3. It helps create motivated employees.

4. It enhances customer relations.

5. Company get into the good books of regulatory
authorities.

6. Attracts new investors.

7. A brand new way to advertise your brand.

Disadvantages of CSR

1. It requires higher costs

2. It can create shareholder resistance

3. It promotes greenwashing

4. Customers can get impatient

5. Shift in the profit-making objective