MANAGEMENT FUNCTIONS

The management process of using resources to attain goals is illustrated in Exhibit 1. Although some management theorists identify additional management functions, such as staffing, communicating, or decision making, those additional functions will be discussed as Subsets of the four primary functions in Exhibit 1. Chapters of the book are de oted to the multiple acti ities and skills associated with each function, as well as to the en ironment, global competiti eness, and ethics, which influence how managers perform these functions. The next section begins with a brief o er iew of the four functions.

Exhibit 1. The !rocess of "anagement.

The four management functions: Planning

Planning is the management function concerned needed to attain them$ ith defining goals for future organi!ational "erformance and deciding on the tas#s and resource use

!lanning defines where the organi#ation wants to be in the future and how to get there. !lanning means defining goals for future organi#ational performance and deciding on the tasks and use of resources needed to attain them. A lack of planning$or poor planning$can hurt an organi#ation%s performance. &or example, Tom Clausen was accused of poor planning when he insisted that 'ankAmerica increase loans 1( percent a year and that profits increase as well. To get new loans, 'ankAmerica)s offices gradually reduced loan *uality. To keep boosting profit, Clausen delayed in esting in computers, scrimped on bank control systems, failed to moderni#e the branches, and kept salaries low. The absence of a detailed plan for achie ing growth and efficiency in se eral areas led to loan failures and huge losses in subse*uent years.

Organi!ing
Organi!ing is the management function concerned ith assigning tas#s% grou"ing tas#s into de"artments% and allocating resources to de"artments$ +rgani#ing typically follows planning and reflects how the organi#ation tries to accomplish the plan. +rgani#ing in ol es the assignment of tasks, the grouping of tasks into departments, and the allocation of resources to departments. &or example, ,ewlett-!ackard, Sears, .oebuck, /erox, and 0igital E*uipment ha e all undergone recent structural reorgani#ations to accommodate their changing plans. 1eneral Creech accomplished his plan for TA1%S impro ed sortie rate largely through decentrali#ation and the de elopment of small, independent maintenance units $ a drastic departure from the traditional structure that had encouraged centrali#ation and consolidation of Air &orce resources. 2elly 3ohnson of 4ockheed used organi#ing wi#ardry to reduce the number of subcontractor inspectors from 1,561 to 78 and still achie e the ob9ecti e of impro ed launch

effecti eness. :ndeed, his organi#ing was so good that the Air &orce insisted that a competitor be allowed to isit 3ohnson%s team. The competitor used 7,68( people to perform a similar task and was years behind and way o er budget. 3ohnson%s organi#ation was on schedule and under budget $ and with only 15; people. ,oneywell managers reorgani#ed new product de elopment into <tiger teams< consisting of marketing, design, and engineering employees. The new structural design reduced the time to produce a new thermostat from = years to 15 months. 4ikewise, weak organi#ing facilitated the destruction of 'raniff Airlines under ,arding 4awrence. 'raniff did not ha e enough departments and offices to handle passengers and airplanes for the new national and international routes 4awrence grabbed during deregulation of the airline industry. 'raniff needed an enormous amount of money to set up a structure to fit its strategy. E en before its expansion 'raniff lacked a strong internal structure with clearly defined roles for accomplishing tasks. The structure produced a group of <yes men< who deferred to 4awrence%s e ery decision.

&eading
&eading is the management function that in'ol'es the use of influence to moti'ate em"lo(ees to achie'e the organi!ation)s goals$ The third management function is to pro ide leadership for employees. 4eading is the use of influence to moti ate employees to achie e organi#ational goals. 4eading means communicating goals to employees throughout the organi#ation and infusing them with the desire to perform at a high le el. 4eading in ol es moti ating entire departments and di isions as well as those indi iduals working immediately with the manager. "anagers such as 4ee :acocca are exceptional leaders. They are able to communicate their ision throughout the organi#ation and energi#e employees into

action. 1eneral Creech was a leader when he impro ed the moti ation of aircraft maintenance technicians in hundreds of maintenance s*uadrons. "aintenance people pre iously had been neglected in fa or of pilots. Creech set up highly isible bulletin boards displaying pictures of the maintenance crew chiefs, impro ed their li ing *uarters, and established decent maintenance facilities, complete with paintings and wall murals. ,e introduced competition among the newly independent maintenance s*uadrons. ,e created trophy rooms to hold pla*ues and other pri#es won in maintenance competitions. This prominent display of concern for maintenance specialists greatly increased their moti ation to keep the planes flying. >hen >illiam Schaefer was mayor of 'altimore, he used a number of techni*ues to moti ate city employees. ,e sent them action memos that were blunt and direct? <1et the trash off East 4ombard Street,< <'roken pa ement at 16(( Carey,< <Abandoned car at 5@(( .emington.< +ne action memo said, AThere is an abandoned car . . . but :%m not telling you where it is.< City crews ran around for a week and towed se eral hundred cars. 4eadership has a negati e side, too. Again consider ,arding 4awrence. ,is leadership of 'raniff was said to contribute to employees) demotivations. 4awrence won notoriety on 'raniff &light ;, which he took weekly to isit his wife, who worked in Bew Cork City? ,is tantrums on &light ; are legend. +n one flight a stewardess ser ed him an entire selection of condiments with his meal instead of asking him which one he preferred. ,e slammed his fist into the plate, splattering food on the surrounding seats of the first-class cabin. <0on%t you e er assume what : wantD< he screamed

<+n se eral occasions flight attendants came to me in tears, fearful of losing their 9obs,< says Ed Clements, former director of flight attendant ser ices at 'raniff. <: was sickened by what he was doing to the employees.< 4awrence%s appearance on an aircraft was likely to arouse two emotions in the crew? fear and hatred. :ne itably, dissatisfied employees led to get dissatisfied customers. "arketing sur eys indicated that 'raniff was unpopular with many of its passengers. >ithout a loyal customer base, successful expansion and high performance pro ed impossible. The "anager%s Shoptalk box highlights se eral leadership problems and possible solutions.

Controlling
Controlling is the management function concerned with monitoring employees) acti ities, keeping the organi#ation on track toward its goals, and making corrections as needed. Controlling is the fourth function in the management process. Controlling means to manager to monitoring employees% acti ities, determining whether the organi#ation is on target toward its goals, and making corrections as necessary. "anagers must ensure that the organi#ation is mo ing toward its goals. Controlling often in ol es using an information system to ad ise managers on performance and a reward system for recogni#ing employees who make progress toward goals. &or example, at 0omino)s !i##a 0istribution Company o er 1,5(( franchises are measured weekly. A phone sur ey of customers determines the *uality of ser ice at each franchise, which is reported to management. Compensation for all employees is based on the results. Expected performance le els are re iewed e ery six months and set slightly higher for the next six months. The control system then monitors whether employees achie e the higher targets.

+ne reason for organi#ation failure is that managers are not serious about control or lack control information. .obert &omon, longtime autocratic chief executi e of E. &. ,utton, refused to set up control systems because he wanted to personally super ise senior management. At one time he re iewed the salaries and bonuses of more than 1,((( employees, but e entually ,utton grew too big for his personal super ision. To achie e profit goals managers got in ol ed in an undetected check-kiting scheme and the firm pleaded guilty to 5,((( counts of mail and wire fraud. +ther undetected beha iors were the E@((,((( in tra el and entertainment expenses for one executi e in one year and the listing of party girls from escort ser ices as temporary secretarial help. The lack of control led to &omon%s demise, E. &. ,utton has ne er fully reco ered.