Functions of Management

Introduction: The success of every organisation depends upon its management.

Management process plays an important role in managing the resources of an
organisation.
According to L. A. Allen, “Management is what manager does.” This definition focuses
on the role of the manager in the form of different functions.
Luther Gullick has given a keyword ‘POSDCORB’ for management functions. P stands
for Planning, O for Organising, S for Staffing, D for Directing, CO for Co-ordinating, R for
Reporting and B for Budgeting. Reporting and Budgeting functions are summarized in
the function called as Controlling.
The functions of manager start with planning and end with controlling. These functions
are interrelated and are inseparable in nature. They are performed at all levels of
management.
The important functions of management are as follows.
A) Planning B) Organising C) Staffing
D) Directing E) Co-ordinating F) Controlling

A) Planning:
Meaning: Planning is the basic function of management. Every function of
management is based on this function. It means deciding in advance what to do, how
to do it, when to do it and who is to do it. It focuses on organisation’s objectives.
It is the starting point of management process. It acts as a tool for solving the problems
of business unit. It plays a vital role in business management. It helps to visualize the
future problems and keeps the management ready with possible solutions. It is
regarded as a detailed programme of future courses of action.
It involves selecting missions and objectives and the actions to achieve them. It
requires decision making i.e. choosing from available alternative future courses of
action. It is regarded as intellectual process of logical thinking and rational decision
making. This function is performed by top level management.

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Definition: James Stoner: “Planning is the process of establishing goals and a suitable
course of action for achieving those goals.”

B) Organising:
Meaning: Organising is the process of identifying and bringing together all the
resources (i. e. men, material, machine, money and methods) and using them properly
for achieving the objectives. Planning function decides what is to be done in future.
Organising function decides the ways and means to achieve what has been planned.
This function is important for execution of plans which have been prepared by top level
management. It means it is based on planning function. Its main objective is to identify
and bring together all the resources.
It also includes identification and grouping of activities and assigning work to
subordinates. It brings together available resources and arranges them in a systematic
manner for proper conduct of business activities. This function is usually performed by
top and middle level management.
Definition: Theo Haiman: “Organising is the process of defining and grouping the
activities of the enterprise and establishing the authority relationships among them.”

C) Staffing:
Meaning: Staffing is the process of attracting, recruiting, selecting, placing, appraising,
remunerating, developing and retaining the best workforce. Its main aim is to appoint
right type of people at the right positions, at the right time and with the right pay. This
function is concerned with managing humans and not material. People alone decide
the fate and future of the organisation. Hence, managements place proper focus on
this function.
It includes recruitment, selection, training, development and compensation of human
resources. Middle level management usually looks after recruitment, selection and
training. Top level management usually looks after promotion and compensation of
employees.
Definition: H. Koontz has defined staffing as, “filling and keeping filled, positions in the
organisation structure.”

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D) Directing:
Meaning: Directing is the process of instructing, guiding, motivating, inspiring,
communicating and supervising the employees to achieve predetermined goals of an
organisation. Director shows correct path and guides the employees in solving their
problems wherever necessary.
Directing is said to be the heart or soul of management process. Planning, organising
and staffing functions will have no importance if this function will not be performed.
Managers have to direct their subordinates and have to work as their leaders.
The main objective of this function is to ensure that the employees at different levels
perform their tasks according to plans. This function helps to maintain discipline among
the staff. Middle level management usually performs this function.
Definition: Earnest Dale: “ Directing is what has to be done and in what manner
through dictating the procedures and policies for accomplishing performance
standards.”

E) Co-ordinating:
Meaning: It is a process of integration of activities of the members of an organisation
to achieve its goals. Co-ordination between different functions and all the employees is
needed for the smooth working of the organisation. This function establishes harmony
among all the activities of organisation.
Work of all the employees is closely linked with each other. Organisation will not
achieve its goals unless the efforts of all these employees are harmonized. This
function brings about unity of action for achieving goals of the organisation. Co-
ordination is essential at all the levels of management. Co-ordination is not achieved
automatically. Special efforts are necessary on the part of managers for achieving co-
ordination.
Definition: Henry Fayol: “To co-ordinate is to harmonise all the activities of a concern
to facilitate its working and its success.”

F) Controlling:
Meaning: It is a function of comparing actual performance with the planned
performance. It is the last function of management process. It finds out deviation,
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causes of deviation and suggests corrective measures. This process helps in formulating
future plans.
Top and middle level managers are responsible for proper controlling of activities. This
function is required in all types of organisations and at all levels of management. Its
main objective is to ensure that the goals are achieved as per plan. It involves fixation
of standard, measurement of actual performance, finding deviation and taking
corrective actions to improve performance.
Definition: Philip Kotler: “Control is the process of taking steps to bring actual results
and desired results closer together.”

Importance of Planning /Organising /Staffing/ Directing/Co-

ordinating /Controlling (P/O/S/D/C/C):
1) Reduction in wastages: P/O/S/D/C/C ensures reduction of wastages in the
organisation. Effective performance of this function reduces wastage of resources.
Reduction in wastages helps to increase productivity in the organisation.

2) Optimum use of resources: P/O/S/D/C/C helps the organisation to make optimum

use of available resources within the organisation. There is an efficient use of various
resources such as men, money, material etc. if this function is properly performed.
Optimum use of resources brings good results to the organisation.

3) Higher efficiency: P/O/S/D/C/C is required to generate higher efficiency in the

organisation. Efficiency is the relation between returns and costs. The more the returns
at a lower cost, higher is the efficiency. P/O/S/D/C/C leads to optimum use of
resources and thereby reduces expenditure and increases efficiency.

4) Helpful for growth and diversification: P/O/S/D/C/C facilitates growth and

diversification of the organisation. It improves the efficiency and helps to achieve the
desired results. Improvement in efficiency leads to growth, expansion and
diversification of business.

5) Corporate image: P/O/S/D/C/C helps the business organisation to develop good

image of the organisation in the minds of consumers, shareholders, creditors etc. This
function increases efficiency and returns of the organisation. Higher returns lead to
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better prices of shares in the market. Better share prices build good corporate image
and bring goodwill for the business.

6) Motivation: P/O/S/D/C/C helps to motivate the employees in the organisation by

giving monetary and non-monetary incentives. Effective performance of this function
increase returns. Increased returns enable organisations to offer various monetary and
non-monetary incentives to employees. Motivated employees work with dedication
and increase efficiency of the organisation.

7) Better co-ordination: This function helps in establishing co-ordination among

different departments of the organisation. Co-ordination between different
departments and levels of management is important for the smooth functioning of any
organisation.

8) Better relations: There should be good relationship between various people and
departments of the organisation. Good relations generate teamwork and bring success
to the organisation. This function helps to develop good relations in the organisation.
Better relations lead to industrial peace which is very important for the success of any
organisation.

9) Team work: P/O/S/D/C/C develops team spirit in the organisation. There is a need
for team work between the various departments and people working in the
organisation. Team work brings good results and increases returns in the organisation.

10) Achievement of objectives: P/O/S/D/C/C helps the business firms to achieve its
pre-determined goals. Effective performance of this function minimizes wastage of
material, idle time of employees and departmental disputes. This ensures smooth
working which leads to attainment of goals of the organisation.

11) Innovation: P/O/S/D/C/C facilitates innovation within the organisation. Innovation

generates new ideas, develops new product, new technology etc. Innovation helps the
organisation to face market competition more effectively.

12) Encourages initiative: Effective P/O/S/D/C/C encourages subordinates to come up

with new ideas and suggestions. Active participation of subordinates improves

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efficiency. Improved efficiency increases productivity and brings better results for the
organisation.
Planning Organising Staffing Directing Coordinating Controlling
1. Meaning
It refers to It is the It is the It is the It is the It is the
deciding in process of process of process of process of process of
advance identifying attracting, instructing, integration of comparing
what to do, and bringing recruiting, guiding, activities of actual
how to do it, together selecting, motivating, the members performanc
when to do it resources placing, inspiring, of an e with the
and who is to like men, appraising, communica organization planned one
do it. material etc. remuneratin ting and to achieve its and taking
and using g and supervising goals. steps to
them developing the bring them
systematical employees. employees close
ly for to achieve together.
achieving goals on an
the organisation
objectives. .
2.Objective:
Its main The main The main The main The main The main
objective is objective is objective is objective is objective is objective is
to set goals to identify to appoint to give to integrate to ensure
and choose and bring right type of directions to activities of that the
the means to together all people at the different goals are
achieve the the right employees departments achieved as
these goals. resources to positions, at to do things and per the
undertake the right properly and employees plans.
activities of time and achieve for smooth
the with right goals of the functioning
organization pay. organization of the
. . organization.
3. Area of
function:
It includes It includes It includes It includes It includes It includes
setting of identificatio recruitment, instructing, integration of setting up of
goals, n of selection, guiding, activities of standards,
preparing resources placement, motivating, top level, comparision
alternative needed to training, inspiring middle level of actual
plans and undertake developmen and and lower performanc
selecting the activities. It t and supervising level e with the
best plan for also includes compensati the human management planned one
the identificatio on of human resources. . and taking
organisation. n and resources. corrective
grouping of measures if
activities of necessary.
the
organisation
.
4. Factors:
Internal as Internal and It is mostly It is It is Internal and
well as external concerned concerned concerned external
external factors are with internal directly with with internal factors are
factors are considered factors. internal factors. taken into
considered in in factors i.e. account for
the planning arrangemen human taking
process. t of resources. corrective
resources. measures.
5. Order:
It is the first It follows It follows It follows It follows It follows all
and basic planning. organizing organizing planning. other
function of Resources function. and staffing functions. It
management are for is the last
process. organized execution of function of
Other on the basis planning. managemen
functions of plans t process.
depend on made.
this function.
6.
Resources: It is related It is related It is related It is related It is related
It is related with those with only with only with human with all the
with those resources human human resources resources
resources that are resources. resources. only. because all
which are needed for the
required
Page for
no. 7 undertaking resources
achieving the activities of are needed
goals of the the to achieve
organisation. organisation the
. Usually, all target/goals
the .
resources
(men,
material,
machinery
etc.) are
needed for
undertaking
activities of
the
organisation
.

7. Level of
managemen
t: Top and Middle level Middle level All the levels Top and
This function middle level managers managers of middle level
is performed managers deal with provide management managers
by top level perform this recruitment, directions to have to are
management function. selection the perform this responsible
. These and training employees function. All for
Top level managers of for the managers controlling
managers set identify and employees. achieving - top, middle activities of
the goals and bring Top level the goals of and lower the
prepare together managers the levels have to organisation
plans and resources usually look organisation integrate the .
policies of needed for after . activities of
the undertaking promotion their
organisation. activities of and subordinates.
the compensati-
organisation on of
. employees.
Distinction
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8 management functions: