Functions of Management

The various management functions or rules come from the basic understanding of making life easier and well-planned. 

You see, a small startup or a large corporation with the ability to plan, organize, lead, and control determines how well a business runs; all of that works from the understanding of management.

So, what are these management functions, and why is it so important to know them?!

 

What is Management? 

According to G.R. Terry, ‘Management is a distinct process consisting of planning, organizing, actuating, and controlling, performed to determine and accomplish stated objectives using human beings and other resources’’. It never matters if it is a small business or a large corporation; the management ensures effective planning, optimized organization, and a smooth handling of the problems. 

 

What are the Functions of Management?

 There are four primary functions of management: planning, organizing, leading, and controlling, forming the foundation of a clean program. 

All the functions of management are listed below for your understanding: 

Planning 

The first and most crucial function is planning. Planning increases the efficiency of an organization. All business organizations would like to be successful, have goodwill in the market, and have higher profits. To attain these attributes, the thinking process has to be very effective. Now, let’s understand why planning is essential for the organization. 

Steps in the planning process of management:

1. Establishing verifiable goals 
2. Establishing planning premises 
3. Deciding planning proofs 
4. Finding an alternative course of action 
5. Evaluating and selecting a course of action 
6. Implementing the plan 
7. Measuring and controlling the programs 

Types of plans:

• Objectives: Objectives provide direction to various activities and serve as the benchmark for measuring the efficiency and effectiveness of the organization. 
• Strategies: A strategy is a special kind of plan formulated to meet the challenge of competitors' policies.
• Policies: A policy is a standing plan that assists decision-making and should be referred to as a general statement of the established rule. 
• Procedure: A procedure is a standing plan acting as a means of implementing a policy. 
• Programmes: Programmes are precise plans that need to be made to discharge a non-repetitive task.
• Rules are explicit statements that tell the organization's members what they can or cannot do. 
• Budgets: Budgets are plans for future periods containing statements of expected results in numerical terms. 

 

Organizing 

Once the plan is set, the next step is organizing resources to execute it effectively. Organizing involves allocating tasks, assigning responsibilities, and ensuring that the necessary resources (e.g., people, finances, equipment) are available to meet objectives.

Key elements of organizing include:

• Task Allocation
• Resource Distribution
• Team Coordination

 

Leading 

Leading deals with interpersonal relations. It is the doing or implementing phase of management. Hence, it is also called management in action. All the direction-related activities can be categorized into four different directing elements. They are supervision, communication, motivation, and leadership. 

The four elements of leading:

• Supervision
• Communication
• Leadership
• Motivation

 

Controlling 

Controlling ensures that the whole system of the organization is on track and is meeting its objectives. It involves overlooking performances, reaching out to potential issues, and taking measures to check whether the whole plan is on track. It also ensures whether the organizational resources are being used effectively or not. 

The Importance of Functions of Management? 

Management is essential to the success of any organization, whether it's a small startup or a large multinational corporation. The primary usage of these functions comes while starting a new venture; entrepreneurship is about taking new steps and innovative decisions and putting all these functions together will make the venture successful.

Here's why the practical function of management is so important:

• Achieves Organizational Goals
• Optimizes Resource Utilization
• Improves Decision-Making
• Fosters Innovation and Growth
• Enhances Communication and Collaboration
• Ensures Adaptability and Flexibility

 

Read More:

• Law of Variable Proportions
• Negotiable Instruments Act 
• Trading and Profit & Loss Account
• Partnership Deed

 

Frequently Asked Questions (FAQs) 

What is the relation between Planning and Controlling? 

Planning and controlling are closely related to each other. After a plan becomes operational, control is necessary to measure progress, uncover deviations, and take corrective steps. It is also not possible to think of an effective control system without the existence of good plans. 

What is coordination?

Coordination is the management of interdependence in work situations. Coordination leads to blending the activities of different individuals and groups to achieve specific objectives. In an enterprise that consists of several departments, such as production, purchase, sales, finance, etc., there is a need for all of them to work in synchronization and achieve the organizational objectives.

What are the types of organizational structures?

There are two types of organizational structures: 

• Functional structure: This type of organizational structure is formed by grouping all activities into functional departments and putting each department under one head. Functional structure leads to specialization.
• Divisional structure: Large companies often find it to operate as one large unit under a functional organizational structure. The company's size makes it difficult for managers to oversee operations and screen customers. To overcome this problem, most large companies are now structured as divisional organizations. Each division functions relatively autonomously because it contains most of the functional expertise under each unit.