Functions of Management

Lecture 3
Definition of
Management
1. It is defined as the process followed by managers to accomplish
business goals and objectives.

2. The art of getting things done through people.

3. It is the process of planning , organising , leading and controlling

the efforts of organisation members and of using all other
organisational resources to achieve stated organisational goals.
Definition of
Management
• Management does 4 things:

i. It decides what has to be done

ii. How it must be done

iii. When it should be done

iv. Checks that orders have been carried out

MANAGEMENT FUNCTIONS

• Management functions are the main activities or tasks of managers.

• These are standard functions for all mangers
• The functions of management are also called principles of
management.
• These are different from business functions which are marketing,
production, finance, administration, etc.
• There is no difference between management functions and functions
of management.
GENERAL MANAGEMENT
FUNCTION
• Individual responsible for all the activities, such as production,
marketing, R&D, finance, HRM etc
• Small company may have only one General Manager (GM)
• Large companies may have many general managers, each at the head
of an independent division.
• E.g Large food company- Grocery-product division, Refrigerated-
products division, Bakery division.
• Each GM is responsible for all activities of the unit.
Managerial Levels

Top
Management

Middle
Management

First
-Line/Supervisory/Lower
Management
Top Management

• This is a relatively small group of managers who lead the

organisation.

• Top management is comprised of CEO , Managing Director and Board

of Directors.

• They have final authority and responsibility for executing the

management process.
Top Management

• They are responsible for the whole organisation by determining:

1. Vision
2. Mission
3. Goals
4. Overall strategy of the organisation
 In addition they also approve policies of the organisation.
 Design organisations broad structure
 Influence the corporate culture of the organisation.
 They are mainly concerned with long-term planning
 Middle Management

• They are responsible for specific departments of the organisation.

e.g. Marketing Manager , Operational Manager etc.

• Concerned with implementing the policies . Plans and strategies

formulated by top management.

• Responsible for medium and short term planning and organizing

functional areas.
• They also monitor environmental factors that affect their own
departments and first line managers.
Lower / First-Line
Management

• These are first line managers or supervisors.

• Responsible for smaller segments of the organisation e.g.
Subsections.(supervisors , foremen).
• Centred on the
1. daily activities of their departments or sections ,
2. Short term planning
3. Implementing plans of middle management
• They apply policies and procedures to obtain higher level of
productivity.
 Lower / First-Line Management

• Spent most of their time supervising and motivating their

subordinates.
• These people have the power to increase or decrease productivity.
• They are an interface between management and the body of
employees in the organisations.
Managerial Roles

A Role

• is a set of specific tasks a person performs because of the position

they hold.

• According to Henry Mintzberg , there are 3 broad categories:

1. Interpersonal role

2. Information role

3. Decision making role

Managerial Roles

Interpersonal
Figure Head
Leader
Liaison

Decision Making
Informational
Entrepreneur
Monitor
Problem Solver
Analyser
Resources Allocator
Spokesperson
Negotiator
Interpersonal Roles

• Roles that managers assume to provide

direction and supervision to both
employees and the organization as a whole.
1. Figurehead—symbolizing the
organization , perform duties that are
ceremonial in nature , greeting visitors ,
attending subordinate's wedding , signing
legal documents.
2. Leader—motivating employees ,
appointing new personnel , training,
counseling, mentoring high employee
performance, promoting and dismissing
employees who do not perform.
Interpersonal Roles

3. Relationship Builder / Liaison

• maintaining good relationships within and
outside the organisation.
Decisional Roles

• Roles associated with methods managers

use in planning strategy and utilizing
resources.
1. Entrepreneur
deciding which new projects or programs to
initiate and to invest resources in.
• identify new opportunities and threats for the
organisation
2. Disturbance handler/ Problem Solver
• managing an unexpected event or crisis.
• solve organizational problems
Decisional Roles

3. Resource allocator
• assigning resources between functions and
divisions, setting the budgets of lower
managers.
• Decides to whom resources should be
assigned.
4. Negotiator
• reaching agreements between other
managers, trade unions, suppliers, or
shareholders.
Informational Roles

• Roles associated with the tasks needed to obtain and transmit

information in the process of managing the organization.
1. Monitor
• gathering information on trends through
reading periodicals and reports and
maintaining personnel contacts.
2. Analyzer
• analyzing information from both the internal
and external environment.
Informational Roles

3. Spokesperson
• passing on relevant information to
colleagues , superiors and subordinates.
• chairing board meetings and making phone
calls to relay information.
Management Skills

• Although at all levels of management

managers are expected to practice
management roles , there are certain
competences also required at certain level of
management.
• The skills that are required vary according to
the levels of management.
• Therefore, 3 main skills identified as
prerequisites for sound management are:
 Management Skills cont........
Conceptual Skills
Interpersonal Technical
Skills Skills
• Ability to view • Also called Human • Ability to
the organisation Relations
• Ability to work with apply
as whole
(Holistic other people. knowledge
Approach). • Managers must be and
• Ability to able to: techniques of
• resolve conflict
understand • Motivate people a specific
complex ideas • Communicate with discipline to
• Solve problems people attain goals.
• Make Decisions • understand • It is the
• Ability to think people’s behaviour
strategically. ability to
perform a
given job
Management Skills Needed at
Various Management Levels
Importance of Management in an organisation

1. It helps in achieving group goals

• It arranges the factors of production, assembles and organizes the
resources, integrates the resources in effective manner to achieve
goals.
• It directs group efforts towards achievement of pre-determined
goals.
• By defining objective of organization clearly there would be no
wastage of time, money and effort.
• Management converts disorganized resources of men, machines,
money etc. into useful enterprise. These resources are coordinated,
directed and controlled in such a manner that enterprise work
towards attainment of goals.
Importance of Management in an
organisation

2. Optimum Utilization of Resources

 Management utilizes all the physical & human resources
productively. This leads to efficacy in management.
 Management provides maximum utilization of scarce resources by
selecting its best possible alternate use in industry from out of
various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge, and proper utilization and
avoids wastage. If employees and machines are producing its
maximum there is no under employment of any resources.
Importance of Management in an
organisation

3. Reduces Costs
• It gets maximum results through minimum input by proper planning
and by using minimum input & getting maximum output.
• Management uses physical, human and financial resources in such a
manner which results in best combination. This helps in cost
reduction.
Importance of Management in an
organisation

4. Establishes Sound Organization

• No overlapping of efforts (smooth and coordinated functions). To
establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for
fulfillment of this, it establishes effective authority & responsibility
relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates.
• Management fills up various positions with right persons, having
right skills, training and qualification. All jobs should be cleared to
everyone.
Importance of Management in an
organisation

5. Establishes Equilibrium
• It enables the organization to survive in changing environment. It
keeps in touch with the changing environment. With the change is
external environment, the initial co-ordination of organization must
be changed. So it adapts organization to changing demand of
market / changing needs of societies. It is responsible for growth and
survival of organization.
Importance of Management in an
organisation

6. Essential for Prosperity of Society

• Efficient management leads to better economical production which
helps in turn to increase the welfare of people. Good management
makes a difficult task easier by avoiding wastage of scarce resource.
It improves standard of living. It increases the profit which is
beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which
generate income in hands. Organization comes with new products
and researches beneficial for society.
Managerial levels, skills and roles

Managerial Levels:
Managers can be classified by their level in the organization,
particularly in traditionally structured organizations—those shaped like
a pyramid.
1) First-line managers (often called supervisors) are located on the
lowest level of management.
2) Middle managers include all levels of management between the
first-line level and the top level of the organization.
3) Top managers include managers at or near the top of the
organization who are responsible for making organization-wide
decisions and establishing plans and goals that affect the entire
organization.
Managerial roles

1) Interpersonal roles: include figurehead, leadership, and liaison

activities.
2) Informational roles: include monitoring, disseminating, and
spokesperson activities.
3) Decisional roles: include entrepreneur, disturbance handler,
resource allocator, and negotiator.
Managerial skills

Managers need certain skills to perform the challenging duties and

activities associated with being a manager. Robert L. Katz found
through his research in the early 1970s that managers need three
essential skills:
1) Technical skills are job-specific knowledge and techniques
needed to proficiently perform specific tasks.
2) Human skills are the ability to work well with other people
individually and in a group.
3) Conceptual skills are the ability to think and to conceptualize
about abstract and complex situations.
 Functions of Management

 Different experts have classified functions of management.

According to George & Jerry, “There are four fundamental functions
of management i.e. planning, organizing, actuating and controlling”.
 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, Organizing, Staffing, Directing and Controlling.
Planning and Organising in
Management

For theoretical purposes, it may be convenient to separate the

function of management but practically these functions are
overlapping in nature i.e. they are highly inseparable. Each function
blends into the other & each affects the performance of others.
Planning and Organising in
Management

Planning:
• It is the basic function of management.
• It deals with taking out a future course of action & deciding in
advance the most appropriate course of actions for
achievement of pre-determined goals.
• According to KOONTZ, “Planning is deciding in advance - what
to do, when to do & how to do.
• It bridges the gap from where we are & where we want to
be”. A plan is a future course of actions.
• It is an exercise in problem solving & decision making.
Planning is determination of courses of action to achieve
desired goals.
• Thus, planning is a systematic thinking about ways & means
for accomplishment of pre-determined goals. Planning is
necessary to ensure proper utilization of human & non-
human resources. It is all pervasive, it is an intellectual
activity and it also helps in avoiding confusion, uncertainties,
risks, wastages etc.
KINDS OF ORGANISATIONAL
PLAN
The kinds of plan made by top management, middle management,
and lower management differ in many respects.
 Top management typically has to formulate plans (strategies) for the
entire organisation.
 Middle management drafts plans (tactics) for specific functional
areas in the organisation (e.g. finance or marketing) to support top
management’s plans.
 Lower management formulates plans for their specific smaller
sections to support middle management’s plans.
KINDS OF ORGANISATIONAL
PLAN
Strategic plans (long term plans): Are plans designed to ensure that
the organisation as a whole is aligned with the changing external
environment. These plans are formulated by top management and
focus on the entire organisation. Planning at strategic level includes:
Creating a vision (dream) of the future for the entire organisation.
Translating the vision into a realistic mission statement
Translating the mission statement into measurable long term goals
Choosing a strategy/strategies to attain the above
KINDS OF ORGANISATIONAL
PLAN
Tactical plans (Intermediate plans):
Deals primarily with people and action to implement the strategic
plans.
The focus could be on the functional areas in an organisation.
Tactical plan for HRM could be to create a training department that
will ensure that managers and employees possess the right type of
skill for the future.
The marketing manager may have to formulate tactical plans that deal
with the segmentation of the market, which market to target and how
to position the organisation.
Finance may have to plan to ensure a positive cash flow for the
company.
KINDS OF ORGANISATIONAL
PLAN
Operational Plans (short-term plans):
 Are developed by middle-level and lower-level managers.
 These plans focus on carrying out tactical plans to achieve
operational goals.
 They are narrowly focused and have relatively short time horizons
(monthly, weekly, and day-to-day).
 E.g. a supervisor at a mine may formulate an operational plan to
ensure that all work shifts for the next week are properly staffed.
Planning and Organising in
Management
ORGANISING

It is the process of bringing together

physical, financial and human resources
and developing productive relationship
amongst them for achievement of
organizational goals.
Planning and Organising in Management

ORGANISING: Reasons for Organising

1. Allocation of responsibilities: Organising leads to an organizational
structure that indicates clearly who is responsible for which tasks.
2. Accountability: This implies that responsible employees will be
expected to account for the outcomes, positive or negative, for that
portion of the work directly under their control.
3. Establishing clear channels of communication: This ensures that
communication is effective and that all information required by
managers and employees at all levels of the organisation effectively
reaches them through the correct channels so that they can perform
their jobs effectively.
Planning and Organising in Management

ORGANISING: Reasons for Organising

4. Resource deployment: Organising helps managers to deploy
resources meaningfully
5. Division of work: The total workload is divided into activities to be
performed by an individual or a group of individuals.
6. Departmentalization: The related tasks and activities of employees
are grouped together meaningfully in specialized sections,
departments so that experts in various fields can deal with their
specialized tasks.
7. Coordination: The organisation structure is responsible for creating
a mechanism to coordinate the activities in the entire organisation.
ALL THE 7 POINTS ABOVE DIRECT THE ORGANISATION TOWARDS
ATTAINING ITS MISSION AND GOALS.
Leading and Control in Management

Leading:
• Leading is another of the basic function within the management
process "Leading is the use of influence to motivate employees to
achieve organizational goals" (Richard Daft).
• Managers must be able to make employees want to participate in
achieving an organization's goals. Three components make up the
leading function:
• Motivating employees
• Influencing employees
• Forming effective groups.
Leading and Control in Management cont.

Components of leadership:
1. Authority: the right of the leader to give orders and to demand
action from subordinates.
2. Power: The ability of the leader to influence the behaviour of
other without necessarily using authority.
3. Influence: The ability to apply authority & power in such a way
that followers take action e.g. military leaders influence soldiers
in such a way that they kill people, and must be able to sacrifice
their own lives. In the sake of organisations, followers are often
influenced to make personal sacrifices for the organization's
sake.
Leading and Control in Management cont.

4. Delegation: this occurs when the task of the leader involves

passing his or her authority on to a subordinate to do something on
his/her behalf. Delegation entails subdividing a task and passing a
smaller part of it on to a subordinate together with the necessary
authority to execute it.
5. Responsibility and Accountability: leaders bear the responsibility for
performing a task according to orders, and it is their duty to account
for their actions.
Power as a component of leadership

Types of Power:
1. Legitimate power: the authority that the organisation grants to a
particular position. Thus a manager has the right to compel
subordinates to perform their duties and to dismiss them if they
do not.
2. The power of reward: This is the power to give or withhold
rewards. Such rewards may include a salary increase, bonuses,
recognition, or interesting assignments.
3. Coercive power: This is the power to enforce compliance
through fear, either psychological or physical.
Power as a component of leadership

Types of Power cont.…

4. Referent power: This refers to personal power and is somewhat
abstract concept. The subordinates follow their leader simply because
they like, respect, or identify with him/her. In other words, the
leader’s personal characteristics make him/her attractive. Such a
leader is said to have “charisma”.
Power as a component of leadership

Types of Power cont.…

5. Expert Power: This is power based on knowledge and expertise. A
leader who possesses it has special power over those who need this
knowledge or information – the more important the information, and
the fewer the people who possess it, the greater the power of the
person who commands it.
Summary on power

A manager who possesses all five kinds of power is a strong leader.

However, not only managers or leaders have power – subordinates
also possess power. Managers sometimes depend on their
subordinates for information.
Contemporary perspectives (models) on
leadership

Transactional leadership: Is the traditional management function of

leading. Transactional leaders:
 Clarify the role of subordinates
 Initiates structures
 Provides appropriate rewards
 They conform to organizational norms and values
Contemporary perspectives (models) on
leadership

Charismatic leadership: Are leaders/individuals who have an

exceptional impact on their organisations. They have the capacity to
motivate people to do more than what is normally expected of them;
they motivate subordinates to transcend their expected performance.
A good example is Bill Gates.
Contemporary perspectives (models) on
leadership

Transformational leadership:
Are similar to charismatic leaders but are distinguished by their special
ability to bring about innovation and change.
They emerge to take an organisation through major strategic change.
They have the ability to make the necessary successful changes in the
organization's vision and mission, in its goals, strategies, structure,
culture, reward system, etc.
Transformational leadership is ideal in dynamic situations.
Leading and Control in Management

Controlling
The final phase of the management
process is controlling. "Controlling means
monitoring employees' activities,
determining whether the organization is
on target toward its goals, and making
correction as necessary (Richard Daft ).
Controlling ensures that, through
effective leading, what has been planned
and organized to take place has in fact
taken place.
The importance of control

An organisation needs a control process because the best of plans may

go wrong.
A control process is necessary in an organisation for the following
reasons:
 To ensure that all activities at all levels of the organisation are in
accordance with the organization's goals.
 Control is applied to ensure that the organization's resources are
deployed in such a way that it attains its goals. If there I no control,
the organization's resources could be wasted or misapplied.
The importance of control cont.

 Control usually results in better quality

 Control enables management to cope with change and uncertainty
 Control helps to minimize costs and limit the accumulation of errors.
 Control facilitates delegation and teamwork. Managers often fear
delegation. They only delegate where they can control.
The Control Process cont.

We can identify four steps in the control process.

1. Establishing standards of performance: Involves projecting of
expected or planned performance . Over a period of time , the
difference between planned and actual performance is
monitored to compare actual performance with projected
standard.
2. Measuring actual performance: Involves collecting data and
reporting on actual performance.
3. Evaluating deviations: determining whether performance
matches set standards. Emphasis is on evaluating differences
between actual performance and predetermined standards.
The Control Process cont.

4. Taking corrective action: corrective action is action aimed at

achieving or bettering the performance standard and ensuring. If
actual performances match the performance standard, no corrective
action is necessary, provided that the standards have been set
realistically.
AREAS/FOCUS OF CONTROL

1. The Control of physical resources: are its tangible assets, such as

buildings, office equipment and furniture, vehicles,
manufacturing machinery and equipment, trading stock, raw
materials, work in process, and finished products.
2. The control of financial resources: Involves control of resources
as they flow into the organisation (revenues, returns on
investments; financial resources flowing out of the organisation
(salaries, expenses). Control is done so that revenues are
sufficient to cover expenses and show a profit. Control on
revenue is also implemented to deter fraud.
Budgets and Financial analysis are used as tools.
AREAS OF CONTROL cont.

3. The control of information resources: All the tasks of management,

namely planning, organising, leading, and controlling , are dependent
on supporting information in order to function effectively. Relevant
and timely information that is made available to management during
the management process is vital in monitoring the progress of goal
attainment.
 Only with accurate and timely information can management
implement plans and determine continually whether everything is
proceeding according to plan and whether adjustments need to be
made.
AREAS/FOCUS OF CONTROL cont.

4. The control of human resources: This is done through performance

management i.e. evaluating employees and managers in the
performance of the organisation.
Characteristics of an effective control
system

3. Accuracy: A control system should be designed in such a way that it

provides a goal-oriented and accurate picture of the situation. Errors
or deviations should not be concealed in the data.
4. Timeliness: Control data should be supplied regularly, as needed.
Characteristics of an effective control
system

1. Integration: A control system is effective when it is integrated

with planning, and when it is flexible , accurate, goal-oriented ,
timely, and not too complex.
2. Flexibility: It should be able to accommodate change. Timely
adjustments in goals or plans should not be regarded, but as
revisions, and the control system should be able to adjust to such
revisions, within limits, without management having to develop
and implement an expensive new control system.