Management Functions

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Editor: Sonya D. Hill
Date: 2012
Encyclopedia of Management
Publisher: Gale, a Cengage Company
Document Type: Topic overview
Pages: 5
Content Level: (Level 4)

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Management Functions

The functions of management uniquely describe managers' jobs as well as the specific actions managers must take in order to perform their job. The most commonly cited functions of management are planning, organizing, leading, directing, and controlling, although some identify additional functions. The functions of management define the process of management as distinct from accounting, finance, marketing, and other business functions. These functions provide a useful way of classifying information about management, and most basic management texts since the 1950s have been organized around a functional framework, although growing criticism of this framework has been present, especially since the 1980s.

DEVELOPMENT OF THE FUNCTIONAL APPROACH TO MANAGEMENT

Henri Fayol was the first person to identify elements or functions of management in his classic 1916 book Administration Industrielle et Generale. Fayol was the managing director of a large French coal-mining firm and based his book largely on his experiences as a practitioner of management. Fayol defined five functions, or elements of management: planning, organizing, commanding, coordinating, and controlling. Fayol argued that these functions were universal, in the sense that all managers performed them in the course of their jobs, whether the managers worked in business, military, government, religious, or philanthropic undertakings.

Fayol defined planning in terms of forecasting future conditions, setting objectives, and developing means to attain objectives. Fayol recognized that effective planning must also take into account unexpected contingencies that might arise and did not advocate rigid and inflexible plans. Fayol defined organizing as making provision for the structuring of activities and relationships within the firm and also the recruiting, evaluation, and training of personnel.

According to Fayol, commanding as a managerial function concerned the personal supervision of subordinates and involved inspiring them to put forth unified effort to achieve objectives. Fayol emphasized the importance of managers understanding the people who worked for them, setting a good example, treating subordinates in a manner consistent with firm policy, delegating, and communicating through meetings and conferences.

Fayol saw the function of coordination as harmonizing all of the various activities of the firm. Most later experts did not retain Fayol's coordination function as a separate function of management but regarded it as a necessary component of all the other management functions. Fayol defined the control function in terms of ensuring that everything occurs within the parameters of the plan and accompanying principles. The purpose of control was to identify deviations from objectives and plans and to take corrective action.

Fayol's work was not widely known outside Europe until 1949, when a translation of his work appeared in the United States. Nevertheless, his discussion of the practice of management as a process consisting of specific functions had a tremendous influence on early management texts that appeared in the 1950s. These texts approached management from a scientific angle—as something that could be organized and structured based on accepted principles.

Management pioneers such as George Terry, Harold Koontz, Cyril O'Donnell, and Ralph Davis all published

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management texts in the 1950s that defined management as a process consisting of a set of interdependent functions. Collectively, these and several other management experts became identified with what came to be known as the process school of management. In 1964, L. A. Allen's The Management Profession outlined four management functions, planning, organizing, leading, and controlling, with 19 activities attributed to each of those functions. According to a 2010 article by A. Stretton in PM World Today, this can also be seen as the “classical” approach to management.

According to the process school, management is a distinct intellectual activity consisting of several functions. The process theorists believe that all managers, regardless of their industry, organization, or level of management, engage in the functions of management. The process school of management became a dominant paradigm for studying management and the functions of management became the most common way of describing the nature of managerial work.

CRITICISM OF THE FUNCTIONAL APPROACH TO MANAGEMENT

By the early 1970s, some experts suggested that the functions of management as described by Fayol and others of the process school of management were not an accurate description of the reality of managers' jobs. Chief among the critics of the functional approach was Henry Mintzberg.

Mintzberg argued that the functional or process school of management was “folklore” and that functions of management such as planning, organizing, leading, and controlling did not accurately depict the chaotic nature of managerial work. He felt that the functional approach to the managerial job falsely conveyed a sense that managers carefully and deliberately evaluated information before making management decisions. Instead, Mintzberg claimed that in many cases there is no formal planning or conscious planning in the everyday world of strategy making and managing.

Based upon an observational study of five executives, Mintzberg concluded that the work managers actually performed could best be represented by three sets of roles, or activities: interpersonal roles, informational roles, and decision-making roles. He described the interpersonal roles as figurehead, leader, and liaison. He identified three informational roles: monitor, disseminator, and spokesperson. Finally, he described four decision-making roles: entrepreneur, disturbance handler, resource allocator, and negotiator.

Mintzberg's challenge to the usefulness of the functions of management and the process school attracted a tremendous amount of attention and generated several empirical studies designed to determine whether his or Fayol's description of the managerial job was most accurate. While this research did indicate that managers performed at least some of the roles Mintzberg identified, there was little in the findings that suggested that the functions of management were not a useful way of describing managerial work.

Scholars continue to debate this question. Research by David Lamond published in Management Decision suggests that both approaches have some validity, with Fayol's approach describing the ideal management job and Mintzberg describing the day-to-day activities of managers. Thus, the general conclusion seems to be that while Mintzberg offered a genuine insight into the daily activities of practicing managers, the functions of management still provides a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals.

One additional criticism which has been made of the functional approach to management is that it does not take into account that different management situations call for different management functions. As early as 1974, L. A. Allen recognized this and added “technical functions” as a catchall function encompassing marketing, finance, legal, engineering, personnel, purchasing, production, manufacturing, and other functions which are related to—but not necessarily carried out by—the manager. These functions are often taken care of by specialized personnel or departments, but still concern the manager. Stretton called these “supporting” functions and noted their importance, especially when managers move from overall or general managerial tasks to specific situations or project management.

This sort of catchall function may also address the fact that management jobs have changed dramatically since Fayol and others created their theories. Today's manager may be responsible for guidance and for social media components in the organization, for example. That is, as companies become more interactive and less top-down in their style of management, the functions of directing and controlling may look very different.

PLANNING

Planning is the function of management that involves setting objectives and determining a course of action for achieving these objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.

According to the 2010 book, Essentials of Management and Leadership in Public Health, planning is often the first step in the management function and in any management process. Authors Robert E. Burke and Leonard H. Fried-man identify two types of essential planning: de novo

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planning, which takes place with a new initiative, and planning which takes place after a problem or issue arises.

Burke and Friedman argue that an organization develops relationships so that the results of the planning stage can be implemented. Successful organizing is based on authority and includes all relevant persons and departments in an organization. Integrating efforts and developing good systems, Burke and Friedman argue, are the basics of good organization.

Planning is a process consisting of several steps. The process begins with environmental scanning, which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. They must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

Strategic Planning. Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning can also involve overall future planning for businesses, such as emergency preparedness planning. Businesses that are restructuring also make use of strategic planning. Strategic planning is often based on the organization's mission, which is its fundamental reason for existence. An organization's top management most often conducts strategic planning. This type of planning is so important for businesses that the Association for Strategic Planning awards the Richard Goodman Strategic Planning Award as well as other honors to businesses that show excellence in this type of planning.

In some cases, strategic planning is intended to provide a long-term view of business goals and a general view of business direction. For example, in early 2011, the Frazee-Vergas School District in Minnesota announced plans to hire experts and establish a board for strategic planning. The district's intended goals for this type of planning went beyond the usual yearly “goals” established by the schools. Instead, the school district wanted to examine what had and had not been working in the district, with a view to making changes over the next five years.

Tactical Planning. Tactical planning is intermediate-range planning that is designed to develop relatively concrete and specific means to implement the strategic plan. A tactical plan, for example, may involve a few specific goals, such as increasing sales by a specific percentage within a specific time frame. Tactical plans, when successful, involve detailed and specifically actionable goals and plans. Middle-level managers often engage in tactical planning. Tactical planning often has a one- to three-year time horizon.

Operational Planning. Operational planning generally assumes the existence of objectives and specifies ways to achieve them. Operational planning is short-range planning that is designed to develop specific action steps that support the strategic and tactical plans. Operational planning usually has a very short time horizon, from one week to one year.

ORGANIZING

Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as “organizational design” decisions.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize or cluster jobs into departments to effectively coordinate effort. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations utilize multiple methods of departmentalization. Organizing at the level of job involves how best to design individual jobs to most effectively use human resources.

Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to

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become too narrow and specialized. When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment and increased absenteeism and turnover.

Recently many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as job enrichment and teamwork. As organizations change, specialization and division of labor no longer seems as relevant at many companies. Small and micro-businesses, for example, may require managers to play several roles usually reserved for expert staff. Some companies are actively getting employees involved in marketing by granting them blogs or online platforms to assist with company branding, an activity that in the past was meted out to marketing professionals.

LEADING

Leading involves influencing others toward the attainment of organizational objectives. Effective leading requires the manager to motivate subordinates, communicate effectively, and effectively use power. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort toward the attainment of organizational objectives.

To become effective at leading, managers must first understand their subordinates' personalities, values, attitudes, and emotions. Therefore, the behavioral sciences have made many contributions to the understanding of this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates.

As a new generation of employees enters the work-force, managers must become familiar with the values and norms particular to the demographic. For example, much has been written about how to manage the 80 million workers under the age of 30 known as “millenials” or “Generation Y.” Although the group has been stereotyped as self-absorbed and with a sense of entitlement, experts say that this generation is also passionate about teamwork and eager to take on challenges. Such generalizations may be a useful springboard for exploring the relationship between young employees and company culture, but they can easily be misused when relied on without supplemental information.

Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions such as, what makes a manager a good leader? In what situations are certain leadership styles most appropriate and effective?

Some experts, including Burke and Friedman, also define staffing functions as a part of the leading function. Staffing functions can include training, recruitment, job analysis, compensation, promotion, counseling, and other staff-related activities.

CONTROLLING

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps: establishing performance standards, comparing actual performance against standards, and taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits, but may also be stated in other terms, such as units produced, number of defective products, or levels of customer service. The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager's role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are the budget and the performance audit. Although controlling is often thought of in terms of financial criteria, managers must also control production/operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.

DIRECTING

A key part of any manager's job is to encourage or generate action and activity which brings a department or organization closer to their goals. According to Burke and Friedman, the direction function is in fact how managers make this action take place. Burke and Friedman argue that direction involves leadership, communication, and motivation. According to P. C. Tulsian and Vishal Pandey, in their 2009 book Business Organisation

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and Management, directing involves supervising, motivating, leading, and communicating effectively with others. Tulsian and Pandey noted that directing includes guiding, motivating, supervising, leading, and teaching personnel so that the objectives of the organization can be met. In essence, directing means giving orders, instructing others what to do, and supervising to ensure that tasks are completed. According to Tulsian and Pandey, directing is the heart of management, because it links all management functions together.

While managers may plan before directing and may institute controls after issuing directions, directing is at the heart of the successful managerial experience, and it integrates all management functions as well. For this reason, directing is often considered an “activating link” between management functions. It is also considered a pervasive function and a performance-oriented function, as it exists at every level of a business and is focused on getting tasks and projects accomplished. Direction is also significant because it involves human behavior and is a continuing function, meaning that it is always required.

The management functions of planning, organizing, leading, and controlling as well as directing are widely considered to be the best means of describing the manager's job as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.

BIBLIOGRAPHY

Anderson, P., and M. Pulich. “Managerial Competencies Necessary in Today's Dynamic Health Care Environment.” Health Care Manager 21, no. 2 (2002): 1–11.

Burke, Robert E., and Leonard H. Friedman. Essentials of Management and Leadership in Public Health. Sudbury, MA: Jones and Bartlett Learning, 2010.

Carroll, Stephen J., and Dennis J. Gillen. “Are the Classical Management Functions Useful in Describing Managerial Work?” Academy of Management Review 12, no. 1 (1980): 38–51.

Fayol, Henri. General and Industrial Administration. London: Sir Issac Pitman & Sons, 1949.

Koontz, Harold, and Cyril O'Donnell. Principles of Management: An Analysis of Managerial Functions. New York: McGraw-Hill, 1955.

Lamond, David. “A Matter of Style: Reconciling Henri and Henry.” Management Decision 42, no. 2 (2004): 330–56.

“Managing Millenials: A Survival Guide.” BNET, 19 May 2008. Available from http://www.bnet.com/2436-13059_23-202082.html .

Marquis, Bessie L., and Carol J. Huston. Leadership Roles and Management Functions in Nursing: Theory and Application. 6th ed. Philadelphia, PA: Lippincott Williams & Wilkins, 2008.

“Mastering the Art of Effective Decision Making.” BNET, 11 January 2008. Available from http://www.bnet.com/2403-13056_23-183053.html .

Mayfield, Pippi. “Frazee Schools May Go with Strategic Planning.” DL-Online, 16 March 2011.

Mintzberg, Henry. The Nature of Managerial Work. New York: Harper & Row, 1973.

Prosper Strategic Finance, LLC. “The Importance of Tactical Planning in Your Business.” Phoenix: AZ: Prosper Strategic Finance, 9 March 2010. Available from http://pros-per.com/404/the-importance-of-tactical-planning-in-your-business/ .

Robbins, Stephen P., and Mary Coulter. Management. Upper Saddle River, NJ: Prentice Hall, 1999.

Stretton, Alan. “Relationships Between Project Management and General Management.” PM World Today, 12, no. 8 (2010). Available from http://www.pmforum.org/library/papers/2010/PDFs/aug/FP-STRETTON.pdf .

Tulsian P. C., and Vishal Pandey. Business Organisation and Management. New Delhi, India: Dorling Kindersley, 2009.

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Source Citation   

Gale Document Number: GALE|CX4016600184