CHAPTER 4

MANAGEMENT
FUNCTIONS

1
2
 Management Functions

• Regardless of the type of firm and the organizational level, all

managers perform basic management functions.

– ‘Functions of Management’ refers to a strict separation

of the functions and the kinds of work performed
Planni by
various positions in an organization. ng
Organiz
Mgt ing
– The five key functions of management
Controll functi
ons
ing
Staffin
Directi g
ng/
Leadin 3
Setting objectives Determining
how they’ll be met
Recruit employees
performing the tasks
Delegating and coordinating
tasks Allocating resources
Influencing employees to
achieve objectives
Make sure objectives
are met

4
Planning Organizin
g
Staffing Leading Controllin
g
Setting goals, Determining Recruiting , Motivating, Monitoring Lead
establishing what needs providing leading, and activities to
strategies, to be done, training any other to ensure
and how it will actions that they are
developing be done, and involved accomplishe
plans to who is to do in dealing d
coordinate it with as planned
activities people

5
 Planning
– Plan is a statement of action steps to be taken in order to accomplish
the objectives
– Planning is the process of setting goals and deciding how best to
achieve them
– Planning involves tasks that must be performed to attain
organizational goals, outlining how the tasks must be performed, and
indicating when they should be performed.
 Determining organizational goals and means to reach
them
 Managers plan for three reasons:
1. Establish an overall direction for the organization’s future
2. Identify and commit resources to achieving goals
3. Decide which tasks must be done to reach those goals
6
 Planning
• Planning: includes defining goals, establishing strategy, and developing plans to
coordinate activities
 Objectives and goals: Identify the specific results or desired outcomes that
one intends to achieve
Examples of company’s goals:

– Become the leader of the industry.

– Integrate different elements from novels, comics, movies and music

in order to create outstanding games.
– Maintain a market share of 20% in the industry.

– Introduce a new product next year.

– Achieve a 10% growth in sales in a year.

– Keep cost of goods no more than 50% of sales.

– Achieve a net profit of $2 million in next year. 7

• Reasons for Planning
– To coordinate human resource

– To reduce uncertainty in operation

– To reduce overlapping and wasteful activities

• Benefits of planning
– Improves focus and flexibility

– Improves action orientation

– Improves coordination and control

– Improves time management 8

 Planning process

• Once managers understand the goals of the

company, they can take steps to implement the
planning process in their company.
• Implementation of planning process is
important because if the planning cannot be
transformed into action, it will not be able to
generate benefits to the company.
10
 Planning process

Steps in the planning process:

1. Define your objectives

2. Determine where you stand vis-à-vis objectives

3. Develop premises regarding future conditions

4. Analyze alternatives and make a plan

5. Implement the plan and evaluate results

10
 Planning process

2. Listing 3. Selecting best

1. Setting company
alternative ways of way to achieve the
goals
achieving the goals goals

4. Developing
5. Putting plans
plans to pursue
into action
chosen alternative

11
 Types of plan
1. Strategic plans: set broad, comprehensive, and longer-term action
directions for the entire organization
• Strategic plans are developed to achieve strategic goals.
• A strategic plan is a general plan outlining decisions about
resource allocation, priorities, and action steps necessary to reach
strategic goals
• These plans are set by the board of directors and top management,
• They have an extended time horizon, and address questions of
scope, resource deployment, competitive advantage, and synergy.
• Vision – clarifies purpose of the organization and what it hopes to
be in the future
12
 Types of plan …

2. Tactical plan – helps to implement all or parts of the strategic plan

• A tactical plan, aimed at achieving tactical goals, is developed to

implement specific parts of a strategic plan.

• Tactical plans typically involve upper and middle management and,

• Compared with strategic plans, have a somewhat shorter time

horizon and a more specific and concrete focus.

• It concerned more with actually getting things done than with

deciding what to do.

13
 Types of plan ….

3. Functional plans – indicate how different operations

within the organization will help accomplish the overall
strategy:
• Production plans

• Financial plans

• Facilities plans

• Logistics plans

• Marketing plans

• Human resource plans 14

 Types of plan
4. Operational plans : An operational plan focuses on carrying out
tactical plans to achieve operational goals.
• Developed by middle- and lower-level managers, operational plans
have a short-term focus and are relatively narrow in scope
• Each one deals with a fairly small set of activities.
• Identify short-term activities to implement strategic plans
– Policies are standing plans the communicate guidelines for decisions
– Procedures are rules that describe actions to be taken in specific situations
– Budgets are plans the commit resources to projects or activities
• Zero based budgets allocate resources as if each budget were brand
new
15
 Types of plan…

Types of operational plan:

1. Single-use plan: e.g. program, budget and

project

2. Standing plan: Policy, Standard operating

procedure, Rules and regulations
• In most dominant books by written by prominent
authors, functional and operational plans are
defined to be the same 16
 Types of
plan
5. Contingency planning: The determination of
alternative courses of action to be taken if an
intended plan is unexpectedly disrupted or rendered
inappropriate.
– Identifying alternative courses of action to take when
things go wrong
– Contingency plans anticipate changing conditions
– Contingency plans contain trigger points
17
 Types of plan
• Implementing Plans to Achieve Results

18
 Organizing
– Organizing is the process of allocating and arranging resources so that
plans can be carried out successfully

– Organising the process of creating a structure for the organisation that will
enable its people to work effectively towards its vision, mission, goals and
objectives

– The purpose of organizing function is to turn plans into actions

– Organizing means assigning the planned tasks to various individuals or

groups within the organization and cresting a mechanism to put plans into
action.

– Process of deciding where decisions will be made, who will perform what
jobs and tasks, and who will report to whom in the company
19
 Organizing…

• Organizing is the process by which managers

establish the structure of working relationships
among employees to allow them to achieve
organizational goals efficiently and effectively.
• Includes determining what tasks to be done, who
is to do them, how the tasks are to be grouped,
who reports to whom, and where decisions are to
be made 20
 Organizing Steps

1. 3. Assign 4.
Determin work to Coordina
2. Group 5. Evaluate
e the specific te the
these the results or
specific employe work of
activities organizing
activities es and different process and
into a
needed provide groups make
logical appropriate
to resource and
sequence adjustment
impleme s employe
nt required es

4
 Organizing Steps

• Restaurant manager should determine the specific area that the

St restaurant requires to improve e.g. to reduce the waiting time of
ep customers.
1
• To designate the jobs to be done within the restaurant such as defining
St that serving customers includes taking orders, clearing tables and cooking
ep food.
2
• To assign work to specific employees and provide resources required: To
St determine who will take orders, who will clear the tables, who will cook
ep the food.
3
• To coordinate the work of different groups and employees: To determine
St the details of the relationship between the individual employees. i.e.
ep how they work with each other.
4
• To evaluate the results of implemented organising strategy by gathering
St the feedback from customers and see if the restaurant has attained its
ep goals. If not, corrective action should be taken.
5 6
 Organizational Structure
• Organisational structure the basic framework of formal
relationships between responsibilities, tasks, and people in the
organisation.
• Good management should be able to design an organizational
structure to ensure employees can carry out the work assigned to
them effectively.
• The use of an organization chart can also help to visualize the
relationships between levels of the organizational structure.
• Organisational chart a graphic representation of the way an
organisation is put together 7
 Organizational Structure…

• A typical way of illustrating an organisational

structure is by means of an organisational chart.
• Plans devised and strategies formulated will never
become a reality if human and other resources are
not properly deployed and the relevant activities
suitably coordinated.

7
 Implications of an Organization Chart

• Show the activities of the organization by level.

• Highlight subdivisions of the organization.

• Identify different types of work performed.

• Provide information about different management

levels.

• Show the lines of authority in the organization and the

flow of communications within an organization. 25
26
 OR

Job specialization

Departmentalization

Reporting relationship

Distribution of authority

Coordination
27
 Staffing
– After jobs are identified, grouped, and the organization
structure created, the next managerial task is that of
staffing.

– Staffing is the process of identifying human resource

needs, procuring the necessary employees, training,
utilization, and separation of those employees.

– The major objective of the staffing function is enabling

an organization to attract, maintain, and utilize efficient
and effective workforce. 28
 Staffing…
– Staffing function is the most important managerial act along with
planning, organizing, directing and controlling.

– The operations of these four functions depend upon the manpower

which is available through staffing function

– Human resources are critical for effective organizational functioning.

– Staffing is a pervasive activity: As staffing function is carried out by

all mangers and in all types of concerns where business activities are
carried out.

– Staffing is a continuous activity: This is because staffing function

continues throughout the life of an organization due to the transfers and
promotions that take place. 29
Major elements of the staffing function can be categorized as
follow:
1. Recruitment and selection
2. Training/development
3. Maintenance and utilization: compensation, fringe
benefit, Performance Appraisal , employee relations
4. Separation: Retirement, Resignation, Dismissal
Importance of staffing
– Recruiting

– Determine skills

– Motivate & train

– Compensation levels
30
 Need of staffing
• Staffing function gives more emphasis on the human
elements such as attitude, aptitude, commitment, loyalty while
selecting the right person for the right job.
• Staffing function has been assumed on greater importance
these days because of rapid development of technology,
increasing size of organization and complicated behavior of
human beings.
• It ensures the optimum utilization of human resources by
way of avoiding surplus of workforce and prevents under
utilization of personnel. 31
Steps involved in Staffing Process

Manpower
1 Requirements
2 Recruitment
3 Selection
Orientation and
4 Placement
Training
5 and Development

6 Remuneration

7 Performance Evaluation

8 Promotion and
Transfer

32
 Leading
◦Leading (directing) is a function of management performed
by top level management in order to achieve organizational
goals.
◦It is very important and necessary function of management.
◦Direction consists of the process and techniques utilized in
issuing instructions and making certain the operations are
carried as originally planned.
◦Management has to undertake various activities like, guide
people, inspire and lead them as well as supervision of their
activity is required in order to achieve desired results. 33
 Leading
– Leading is the process of influencing others to engage in
the work behaviors necessary to reach the organization
• Getting others to perform the necessary tasks by
goals
motivating them to achieve the organization’s goals
• Crucial element in all functions

– Leading (Influencing) means guiding the activities of

the organization members in appropriate directions.
Objective is to improve productivity.
34
 The Leading Function
• Leading is to move the people towards the common objectives
of the organization already defined in the planning stage
• It is influencing the members of organization to perform in a
way that will help in achieving the organization objectives
• It guides and helps the subordinates to complete the given task
properly and as per schedule.
• It provides the necessary motivation to subordinates to
complete the work satisfactorily and strive to do them best.
• It helps in maintaining discipline and rewarding those who do
well.
• Directing involves supervision, which is essential to make sure
that work is performed according to the orders and instructions.
35
 Leading

• Includes motivating employees, directing the activities of others, selecting the

most effective communication channel, and resolving conflicts
Elements of leading

1. Supervision- implies overseeing the work of subordinates by their superiors. It

is the act of watching & directing work& workers.

2. Motivation- means inspiring, stimulating or encouraging the sub-ordinates with

passion to work. Positive, negative, monetary, non-monetary incentives may be

used for this purpose.

3. Leadership- may be defined as a process by which manager guides and

influences the work of subordinates in desired direction.

4. Communications- is the process of passing information, experience, opinion etc

from one person to another. 36

 Controlling

Controlling is the process of evaluating

and correcting individual performance to
ensure that outcomes conform to the
The concept of controlling which is
standard setofbefore.
the process 1.
Setting
1. Establishing standard; standard
2. Measuring actual performance;
3. Comparing actual performance 2.
4. Taking Measuri
with standard; and correctiv ng actual
4. Taking action to correct e action perform
Controlling is the process of regulating ance
[Link] so that actual
organizational 3.
Compari
performance matches the expected ng actual
perform
organizational standards and goals ance
with 37
 The Controlling Function
• Matching the actual performance with the performance
standards
• This is done in 3 steps:

– Establishing standards of performance

– Measuring the performance

– Assessing deviation from standards agreed

– Taking corrective actions

• The purpose of controlling is to keep the organization on the

path planned for it 38
1. Establishing Standard
Standard must be reasonable and
achievable.
Ideal standard which is unachievable
may frustrate employees and cannot
help achieve the standards set.
Low standard which is too easy to
achieve cannot
2. make improvement
Measuring Actual for
company’s operation
Performance
For a given standard, manager
must decide how to measure
actual performance.
Setting control criteria: for
company and also for employee 39
3. Comparing Actual Performance
with Standard
Compare the actual performance against the
standards based on the control criteria and
identify the deviations, if any.
Deviations are noted if:
Actual performance below the standard.
Actual performance above the standard

4. Taking Corrective Action

If no deviation or deviation is insignificant,
no action is required.
Otherwise, take corrective actions such as
changing the existing strategy, employees’
remunerations, training etc., OR
Revise the standard if it is not realistic, fair
and achievable. 40
41
Thank you!