Basic Functions of Management

A century ago, French industrialist Henri Fayol originally identified five elements as the basic functions of
management, but today, there are now four generally accepted functions of management: planning, organizing,
leading and controlling. These functions work together in the creation, execution and realization of organizational
goals. The four functions of management can be considered a process where each function builds on the
previous function. To be successful, management needs to follow the four functions of management in the proper
order.

Managers first need to develop a plan, then organize their resources and delegate responsibilities to employees
according to the plan, then lead others to efficiently carry out the plan, and finally evaluate the plan’s
effectiveness as it is being executed and make any necessary adjustments.

 Planning
 Organizing
 Leading
 Controlling

Planning
In the planning stage, managers establish organizational goals and create a course of action to achieve them.
During the planning phase, management makes strategic decisions to set a direction for the organization.
Managers can brainstorm different alternatives to achieve the objective before choosing the best course of
action. While planning, managers typically conduct in-depth analysis of the organization’s current state of affairs,
taking into consideration its vision and mission and evaluating what resources are available to meet
organizational objectives.

While planning, managers usually evaluate internal and external factors that may affect the execution of the plan,
such as economic growth, customers and competitors. They also establish a realistic timeline for achieving the
goal or goals based on the organization’s available finances, personnel and resources. Managers may have to
take additional steps, such as seeking approval from other departments, executives or their board of directors
before proceeding with the plan.

There are several approaches to planning:

 Strategic planning: This type of planning is often carried out by an organization’s top management and
usually creates goals for the entire organization. It analyzes threats to the organization, evaluates the
organization’s strengths and weaknesses and creates a plan of how the organization can best compete in
its environment. Strategic planning usually has a long timeframe of three years or more.

 Tactical planning: Tactical planning is the shorter-term planning of an objective that will take a year or
less to achieve. It is usually carried out by an organization’s middle management. Tactical planning is
usually aimed at a specific area or department of the organization such as its facilities, production,
finance, marketing or personnel.

 Operational planning: Operational planning is the process of using tactical planning to achieve strategic
planning and goals. Operational planning creates a timeframe for putting a portion of the strategic goal
into practice operationally.

Organizing
The purpose of organizing is to distribute the resources and delegate tasks to personnel to achieve the goals
established in the planning stage. Managers may need to work with other departments of the organization, such
as finance and human resources, to organize the budget and staffing. During the organizing stage, managers
strive to create a work environment conducive to productivity. Managers typically take employees’ motivation and
aptitude into account to match employees with roles and tasks that best fit their abilities.
When assigning team member roles, managers should explain and ensure that employees understand their
individual duties. To help employees feel engaged and productive, managers should ensure that employees are
assigned an appropriate amount of work and an appropriate amount of time to complete their work.

Here are some examples of the organizing function:

 If the company’s brand manager works part-time and the organization’s goal is to launch a new
advertising campaign for a product, the brand manager may not take on the significant responsibility of
managing the campaign besides their regular duties. The company may hire an advertising agency to
help with the promotion of the product.

 If a company’s sales in a geographic area have grown exponentially, management may plan to split the
territory in two and need to divide the current team working in the territory and hire additional staff
members as needed.

Leading
Leading consists of motivating employees and influencing their behavior to achieve organizational objectives.
Leading focuses on managing people, such as individual employees, teams and groups rather than tasks.
Though managers may direct team members by giving orders and directing to their team, managers who are
successful leaders usually connect with their employees by using interpersonal skills to encourage, inspire and
motivate team members to perform to the best of their abilities.

Managers can foster a positive working environment by identifying moments when employees need
encouragement or direction and using positive reinforcement to give praise when employees have done their
jobs well.

Managers usually incorporate different leadership styles and change their management style to adapt to different
situations. Examples of situational leadership styles include:

 Directing: The manager leads by deciding with little input from the employee. This is an effective
leadership style for new employees who need a lot of initial direction and training.

 Coaching: The manager is more receptive to input from employees. They may pitch their ideas to
employees to work cooperatively and build trust with team members. This style of leadership is effective
for individuals who need managerial support to further develop their skills.

 Supporting: The manager decides with team members but focuses more on building relationships within
the team. This style of leadership is effective for employees who have fully developed skills but are
sometimes inconsistent in their performance.

 Delegating: The leader provides a minimum of guidance to employees and is more concerned with the
vision of the project than day-to-day operations. This style of leadership is effective with employees able
to work and perform tasks on their own with little guidance. The leader can focus more on high-level
goals than on tasks.

Controlling
Controlling is the process of evaluating the execution of the plan and making adjustments to ensure that the
organizational goal is achieved. During the controlling stage, managers perform tasks such as training
employees as necessary and managing deadlines. Managers monitor employees and evaluate the quality of their
work. They can conduct performance appraisals and give employees feedback, providing positive remarks on
what they are doing well and suggestions for improvement. They may also offer pay raise incentives to high-
performing employees.

Managers may need to make adjustments such as:

Budget adjustments

Managers monitor the budget and resources to ensure that they are using the resources available and not going
over budget. For example, a manager may notice that she is going over budget on a project but be unsure what
is causing the project to go over budget. In this situation, she will need to identify whether there is a general
problem with overspending or whether one department, in particular, is going over budget. Once the manager
identifies the source of the overspending, she must take action to curb overall spending and make cuts as
necessary to balance the budget.

Staffing adjustments

Managers may need to make challenging decisions such as whether to reassign an employee who produces a
low-quality work to a different task or dismiss them from a project. They may also need to add additional team
members to meet an organizational goal if they conclude that the team is understaffed. If this is the case, they
may also need to consult with organization executives to secure more funding.