Functional Areas of Management/Functions of Management:

Henri Fayol (Father of Modern Management), in 1916 provided a

functional approach to management in his book ‘Industrial and General
Administration). His list of managerial functions include- planning,
organising, commanding, co-ordinating and controlling.

Luther Gullick, in the 1930s coined the word POSDCORB which includes
the seven functions of executives as follows:

1. Planning:

Planning is the ongoing process of developing the business' mission

and objectives and determining how they will be accomplished.
Planning includes both the broadest view of the organization, e.g., its
mission, and the narrowest, e.g., a tactic for accomplishing a specific
goal.

 Planning is a basic managerial function,.

 Planning helps in defining the course of action to be followed for
achieving various organizational objectives.
 In the words of Harold Koontz” Planning is deciding in advance-
what to do, how to do it, when to do it, and who is to do it.”
 The main steps involved are:
a) Analysis of internal environment (to identify strength and
weakness of the organization)

b) Analysis of the external environment (to identify

opportunities and threats).

c) Setting objectives and goals.

d) Framing alternative plans.

e) Evaluating alternative plans.

 f) Selection of the best suitable plan.

g) Implementation of plans.

i) Review of the plans.

2. Organizing:

 Every business enterprises needs the services of a number of

persons to look after its different aspects.
 The function of organizing is to arrange, guide coordinating,
direct and control the activities of other factors of production,
Viz, men, material, money and machines so as to accomplish the
objectives of the enterprise.

The main steps are as follows:

 Determining the objectives and goals of the organization.

 To identify the work/activities to be performed to achieve
goals.
 To classify or group the work/activities into departments.
 To assign these groups of activities or work to individuals.
 Delegating authority to managers.
 Establishing superior-subordinate relationships.
 Co-ordination of activities in the organisation.

3. Staffing:

Staffing is filling and keeping filled with qualified people all positions
in the business. Recruiting, hiring, training, evaluating and
compensating are the specific activities included in the function. In
the family business, staffing includes all paid and unpaid positions
held by family members including the owner/operators.
  The function involves manning the positions created by
organization process. It is concerned with human resources of an
organization.
 It involves selection, training, promoting, retiring of managers.
 The underlying aspect – to find out the right person for the right
job.
 It involves the following processes:

a) Placing the right person at the right job.

b) Performance appraisal of employees.

c) Promotion of employees.

d) Transferring of personnel.

e) Training and development of employees.

f) Motivating and rewarding employees.

4. Directing:

 Directing is concerned with carrying out the desired plans.

 It initiates organized and planned action and ensures effective
performance by subordinates towards the accomplishment of
group activities.
 Direction is called management in action
 In other words, directing is influencing people's behavior through
motivation, communication, group dynamics, leadership and
discipline. The purpose of directing is to channel the behavior of
all personnel to accomplish the organization's mission and
objectives while simultaneously helping them accomplish their
own career objectives.
 It involves three sub functions:

 Leadership- A manager has to issue orders and

instructions, guide and counsel his subordinated in their
work.

Leadership is the ability to build up confidence and zeal

among people and to create an urge in them, to be led.

To be successful leader, a manager must possess the

qualities of foresight, drive initiative, self confidence and
personal integrity.

 Communication- Communicating means sharing of ideas in

common.

The essence of communicating is getting the receiver and

the sender turned together for a particular message.

It refers to the exchange of ideas feelings, emotions and

knowledge and information between two or more persons.

Nothing happens in management till communication takes

place.

 Motivation - Motivation is the psychological process of

creating urge on the subordinates to do certain things or
behave in the desire manner
The importance of motivation can be realized from the fact
that performance of a worker depends upon his ability and
the motivation.
5. Co-ordination: It is essential to channelize the activities of various
individuals in the organization for the achievement of common goals.

Coordination creates a team spirit and helps in achieving goals through

collective efforts.

It is the orderly arrangement of group effort to provide unity of action in

the pursuit of common objectives.

It is the essence of management.

6. Reporting: This refers to keeping those to whom the executive is

responsible as well as subordinates informed through records, research
and inspections.

Reporting is done with respect of the performance of the activities.

It is not a separate function of management according to Luther Gullick.

It is an important aspect of planning as well as controlling as reports as
prepared for planning purpose as well as controlling of activities.

7. Budgeting: A budget is an estimate expressed in numerical terms.

It is not a separate function in itself. Rather, it aids in planning as well as

controlling activities.

Eg: Fiscal planning, accounting and control.