MANAGEMENT FUNCTIONS OF ENTREPRENEURS

Management functions are the same to all organizations regardless of size or type.
The only difference is the amount of emphasis given to each level. But in general,
managers have to do the planning, organizing, staffing, directing, and controlling.

PLANNING

Planning is the most basic management function that tells you where to go and
how to get there. It is like preparing a blueprint of what is to be done, when,
how, and by whom it should be done.

Classification of Plans:

1. Standing plans. These plans are used repeatedly and cover policies,
procedures, and rules.

2. Single-used or single-purpose plans. These plans are essentially one-shot

or non repetitious. This is used within a relatively short period of time, they
comprise programs, projects, and budgets. Programs are complicated; they are
made up of objectives, goals, strategies, policies, rules, job assignments,
financial resources and other pertinent items.

Another way to classify plans is according to whether they are short, (to be from
a day to a year), intermediate range plans (to be from a few months to three years);
and long-range plans (to be up to 25 years)

Steps Involved in the Strategic Planning

1) Formulate organization objectives. This serve as the basis where the efforts
and services will be used.
2) Analyze present resources. This refers to the availability of money, staff,
machines, materials, space and time to help you realize your plans.
3) Determine alternative courses of action. Reduce number of alternatives.
Remove those do not look promising, and retain those sound ones for further
analysis.
4) Examine the alternatives. You need to do some statistical and quantitative
analysis of factors involved in each alternative.
5) Select the best course of action. Choosing alternative most likely to be
effective in achieving your objectives.

6) Develop support plans. Smaller plans aims to establish coordination among

other levels of the organization so that the enterprise goal can be easily achieve.
7) Implement the plan. Plans only come into reality when it is implemented. In
implementing the plans, it require the exercise of other management functions,
such as organizing, staffing, directing, and controlling.

ORGANIZING
Organizing involves identifying the specific activities necessary to achieve the
enterprise goals, clustering the activities into departments or job positions, and
designating the personnel to head and compose each department.
 An example of the organizing function is the owner-manager of a small factory
who establishes three departments - production department, sales department, and
administrative department. He assigns manager to head each department and clearly
delineates responsibilities among them. Thus, he give the production manager the
responsibility for manufacturing, packing, and shipping, while he delegates to the sales
manager the responsibility for advertising and costumer service. Then he assigns the
administrative head to look after personnel, purchasing, and accounting.

Below is the diagram showing the organizational relationships of the positions

and their corresponding authority, responsibility, and accountability.

A. LINE ORGANIZATION

The manager has direct command over workers who accomplish the tasks.
Below is an example of a line organization

MANAGER

SUPERVISOR

FOREMAN

WORKERS
 B. LINE AND STAFF ORGANIZATION

Any activities that a line officer can not do are delegated to a staff officer to
render these services. For example, in a small manufacturing enterprise, the
president, production manager, and sales manager perform line functions, while legal
counsel who helps and advices the president has no authority over line employee.
Below is an example of this type.

PRESIDENT

LEGAL COUNSEL

SALES MANAGER PRODUCTION ADMINISTRATIVE

MANAGER MANAGER

C. FUNCTIONAL STAFF ORGANIZATION

In this setup, the worker has more than one immediate superior or as many as
the types of activities assigned to him. An example of this type is shown below.

MANAGER

SUPERVISOR

FOREMAN

QUALITY PRODUCTION
CONTROL SPECIALIST

WORKERS

STAFFING
This process involves proper and effective selection, appraisal and development
of personnel to do the jobs and fulfill the roles in the structure.
 A. Asses your workload. The officers manning the operating units can
determine what exactly they are responsible for. This information can be
used as basis for defining the organizational structure, and the quantity and
quality of personnel needed to handle the workload.

B. Study jobs in the company. This refers to the process of determining the
duties, responsibilities of each job. The analysis can tell you whether or not
the present workers have the required skills and abilities. You can also find
out who else among the presents employees fit in each job.

C. Examine your present personnel. Assess the skills, strengths, weaknesses,

and potentials. Compare your inventory against your forecasted manpower
needs. Your findings will tell you whether:

a) Your company has just the right quantity and quality of people;
b) You have an excess in quantity but are short in quality; or
c) Both quantity and quality of skills of your personnel are insufficient.

D. Design an improvement plan. If you find out that there is a problem in

quantity or quality of skills among your present personnel, you may adopt
any of the following solutions:

a) If your workers are not enough, consider recruiting from inside or

outside the organization.
b) If your workers do not posses the required skills, you may resort to
training and development.

DIRECTING

Directing involves putting your plans into effect. How to influence your
subordinates who have distinct needs and a unique personality, to contribute to the
attainment of the firm’s objectives is the principal concern of directing.

Understanding certain principles will help you direct the actions of your subordinates
towards the successful implementation of your plans. Directing includes the following;

A. Motivation is the process of encouraging the subordinates to act in a desired

manner. When an employee joins a company they bring with them certain
needs which they hope to be able to satisfy.

a. Physiological needs these are needs for air, food, water, for survival
b. Safety needs to be protected from danger, threat, or deprivation
c. Esteem needs such as those for self-confidence, achievement,
competence, knowledge, self-respect freedom and independence. It also
includes the needs for status, recognition, importance, and respect.
d. Self- realization needs represent the needs for full development of
potentials and of being creative.

B. Leadership is the ability of an individual to persuade the subordinates to

follow. As a leader you need a mixture of skills to be effective. These skills may
be required in varying degrees by managers in different situations. These skills
include the following;
 a. Conceptual skills refer to the mental capacity of an individual to grasp
the relationship of different parts into an integrated whole. They need
these skills in planning, and analyzing.

b. Human relation skills is the ability to deal effectively with people

c. Technical skills incorporate the capabilities to perform the mechanics

of a certain job which the operative employees perform, like producing
goods that the company manufactures.

CONTROLLING
The function of controlling is to make sure that what is done in the enterprise
conforms to what has been planned. The two main activities involved here are
comparing actual performance with desired performance and making necessary
connections where there is deviation from the plans.

Steps in the controlling process:

A. Establish standards. Standards are sets of measurements against which you
can evaluate actual results.

Three common types of standards:

• Physical standards include quantity of products or services, number of

customers or clients, and quantity of clients or services.
• Monetary standards are indicated in terms of peso values and include labor
cost, selling cost, material cost, sales revenue, and gross profit.
• Time standards refer to the speed with which job should be done or the
deadlines for their completion.

B. Set performance measurements. It is also necessary to determine how often

should you measure performance, who will do the measurement, and what
form will the measurement take. An important consideration in determining
appraisal is that it must be easy to do and easy to explain to your people.

C. Measure actual performance. This step can be easy for you if the standards
are spelled out clearly and if what your personnel are doing can be determined
clearly. It Includes observation, oral and written reports, automatic methods,
inspections, tests, and samples.

D. Compare performance with standards and analyze deviations. Control does

not stop after measuring performance. Data about actual performance can be
meaningless unless they are compared with desired performance. Then you
should analyze the reasons for the failure to meet the standards so that you
can deal with the roots of the performance problems.
Depending on the nature of the shortfalls in performance, you may
correct these shortfalls by resorting to any of the following remedies.

a) Revising your plans

b) Modifying your goals
c) Reassigning workers
d) Clarifying duties and responsibilities
e) Hiring additional staff
 f) Firing problems workers
g) Stronger leadership

Controls can be classified as either organizational or operational. Organizational

controls are those that measure the over all performance of the organization.
Operational controls evaluate day to day activities and spot areas where you may need
to take corrective actions.

Effective controls have the following characteristics

a) They control the proper activities. People will naturally be conscious

about meeting standards if they are aware that those activities will be
monitored. However, you should take care not to cause an imbalance but
concentrating to much control on one group of activities and easing up on
another.
b) Control should be timely. “A stitch in time saves nine” a popular saying
goes. Control must report deviation in time to enable you to deal with the
problem before it is too late.
c) Controls should be cost effective. Controlling entails costs. You pay for
the processing and monitoring that you use, like registers and computers,
you pay for the personnel like the inspector, accountants, and inventory
controllers. You also pay for the line personnel who work on the data on
scrap, production costs, and personnel report. But are all these practical
and economical?
d) Controls must be accurate. Control measures must be accurate to have a
good basis for corrective actions.
e) Controls must be accepted. It is important that your people understand
the purpose and benefits of control so that they will not feel that you have
installed controls just because you don’t trust your men.

Activity 1

Interview at least three (3) successful managers of different organizations. Give

their similarities and differences using the Venn Diagram and share the results to the
class.

Differences Similarities Differences