The Functions of Management

Introduction: Planning, organizing, leading and controlling (POLC) are the four basic processes or functions of management that constitute the entire work of management. They are all essential parts of management. Planning: Planning involves setting objectives and deciding on actions to be taken to achieve these objectives. It also establishes mission statement, defining the goals of the organization and determining the activities and resources required to achieve them. The managers should decide what to do, how to do it, when to do it and by whom it is to be done. 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, competitors, and their customers. Planners must then attempt to forecast future conditions. This forecast form the basis for planning and provides direction. It reduces uncertainty while playing a major role in minimizing wastes, redundancy and risks. It also in a way sets the standard for controlling process. An organization first need to come up with a vision and mission statement this way the customer and the staff will know what to expect. A Mission Statement defines the organization's purpose and primary objectives. Its prime function is internal to define the key measure or measures of the organization's success and its prime audience is the leadership team and stockholders. Vision Statements also define the organizations purpose, but this time they do so in terms of the organization's values rather than bottom line measures (values are guiding beliefs about how things should be done). The vision statement communicates both the purpose and values of the organization. For employees, it gives direction about how they are expected to behave and inspires them to give their best. Shared with customers, it shapes customers understanding of why they should work with the organization. Once the mission and vision statements put together the organization needs to figure out long term and short term goals for their business. Goals are a great way to make sure your business is on track and its doing what you want it to do and if not, you cant make adjustments along the way so you can still meet your goal. The mission statement is the basis for all goals and plans outlined throughout the organization. Therefore, managers must use effective planning and goal-setting techniques to ensure that internal policies, roles, performances, structures, products, and expenditures are in line with the mission of the organization. Planning involves decision making and choosing among alternative future courses of action. In lay mans terms it could be thought of as thinking before action. It also sets the standards for control. It provides rational and fact based procedure for Decision making.

It forms better chances of success and focuses on the organization's goals and helps to cope with changing environment. Goals and plans can become the standard against which performance measurement can be done. Decision Making is defined as the selection of a course of action from among alternatives. It forms the core of the planning process. The evaluation of alternatives could be done based on the Marginal Analysis (where the additional revenues arising from additional costs are compared) or the Cost Effectiveness Analysis (where objectives are less specific than sales, costs or profits.) Selection of an alternative is done based on experience, experimentation or research and analysis. There are many different types of plans and planning. Strategic planning: It 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 is often based on the organizations mission, which is its fundamental reason for existence. An organizations top management most often conducts strategic planning. Tactical planning: It is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Operational planning: It generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans. Strategies refer to the determination of basic long term objectives and of courses of action and allocation of resources to achieve these aims. Tactics are the action plans through which strategies are executed. Michael Porter identified three generic strategies that a firm can adopt: a) Overall Cost Leadership strategy [Deccan Airways aimed at being a low cost carrier] b) Differentiation Strategy [Vertu aims at selling to only a select clientele] c) Focused Strategy [Olivea luxury coaches between Chennai and Bangalore for the business traveller]

Common between the planning levels is a five-step process: 1.Setting objectives-This step involves management defining their goals. The characteristics of a well-designed goal can be stated as it should be specific, written in terms of actions, measurable and quantifiable; time bound. 2. Analysing the present situation and future opportunities- this is done by undertaking a SWOT (strength, weaknesses, opportunities and threats) analysis. The test helps management outline the organisation's strengths such as brand name, weaknesses such as understaffing, opportunities available currently and in the future such as increased market demand for an organisation's products, and threats to the organisation, such as competition, or economic turmoil. 3. Developing and evaluating alternatives- This step involves management devising several plans on how to achieve their objectives. 4. Implementing the plan-At this stage, management selects the best plan from the alternatives they've developed. This may involve changing the way activities are undertaken in the organization. 5. Monitoring and reviewing results-Management must monitor the results that their plan generates, and decide whether the plan they selected was successful. If it wasn't, management may either have to modify their existing plan, or select another plan from the alternatives they created. If the plan is going well, management can revise the way they are conducting their activities so that they can see whether they can still make any improvements on their plan. Keep in mind that it's probably a good idea to create flexible alternative plans in the beginning, because it's much easier to be able to change an existing plan rather than having to implement a whole new one. Peter F. Druker explained the MBO (Management by Objective) as a concept wherein the top management first sets objectives based on the mission of the company. Though some perceive it as an appraisal tool, some see it as a motivational technique; still others consider it as a planning and control device. Some of the major benefits of this approach are a) Significant improvement of Managing b) Clarification of Organization c) Encouragement of personal commitment d) Development of effective control

Organizing:

Organizing encompasses filling positions in the organization structuring and Human Resource Management. The process of organizing involves designing and development of structure of relationships between members of the team or group assigned to carry out the planned task. It also includes the job of filling and keeping filled positions in the organization. In case the human resources available do not fit the skill set for the companys strategy then this functionality is responsible to hire additional personnel or train the existing resources. Organizing also includes deciding what type of management structure is required. 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. A formal organization structure/chart enables effective working of the staff by helping them understand the authority relationships, explains the career progression The logic to organizing can be summarized as identifying and classifying the activities necessary to achieve the objectives from planning process; grouping these activities in the light of human and material resources available and the best way to utilize them; delegating to the head of each group the authority necessary to perform activities; tying the groups together horizontally and vertically through authority relationships and information flows. The organization expansion becomes possible by grouping activities and people into departments. This could be done by virtue of time (shifts eg. hospitals); enterprise function (marketing, finance, engineering); geography (south, north, EMEA, APAC); customer served (Corporate banking, Institutional banking, Agricultural banking); equipment required (Sales team could be divided into PC, Tablets, Printers, UPS) 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 coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization. Organizing at the level of a particular 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 become too narrow and specialized. Doing the same mundane job over and over again for years can have negative

outcomes, including decreased job satisfaction and organizational commitment, 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 empowerment, job enrichment and teamwork. Staffing involves identifying work force requirements; inventorying the people available; recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating and training or otherwise developing both candidates or current job holders to accomplish their tasks effectively and efficiently. Effective organizing depends on the mastery of several important concepts: work specialization, chain of command, authority, delegation, span of control, and centralization versus decentralization. Work specialization, sometimes called division of labor, is the degree to which organizational tasks are divided into separate jobs. Employees within each department perform only the tasks related to their specialized function. The chain of command is an unbroken line of authority that links all persons in an organization and defines who reports to whom. Authority is the right in a position to exercise discretion in making decisions affecting others. The span is defined as the number of subordinates that a supervisor can manage. Delegation of authority is when a superior gives a subordinate the discretion to make certain decisions. The process includes determining the results to be achieved, assigning tasks, delegating authority and holding the person responsible for results. Centralization is the concentration of authority. This could be geographic concentration, departmental or general tendency to restrict delegation. Decentralization is the tendency to disperse the decision making authority.

Leading:

Leading refers to the process of motivating, directing and guiding the people in the organization for carrying out their work as per plans and objectives. Leading plays a very crucial part in the business organization. A leader is interpreted as someone who sets direction in an effort and motivates people to follow that direction. If there is no good leadership the business will not reach its objective. Every successful business requires effective leadership to fully utilize the skills of staff in order to achieve the aims of the business. This is not just a matter for larger businesses, even if only one or two people is employed manager still need to make sure that they make the most of their abilities and aptitudes. Motivation refers to the entire class of drives, desires, needs, wishes and similar forces. Human motives are based on needs. Some of these are physiological requirements for water, air, sleep and shelter. Others are secondary such as self esteem, status affiliation, affection, accomplishment and self-assertion. Psychologist B.F. Skinner developed an interesting technique for motivation called positive reinforcement or behavior modification. This holds that individuals can be motivated by proper design of their work environment and praise for their performance and that punishment for poor performance produces negative results. This approach analyzes the work situation and determines what causes workers to act the way they do and initiate changes to eliminate troublesome areas or obstruction to performance. Some of the special motivation techniques used today includes money, participation, quality of work life and job enrichment. Job enrichment attempts to make the job more varied by removing dullness associated with performing repetitive operations. According to a November 2009 Mckinsey report the three key motivators were praise from immediate managers, attention from leadership (often in the form of one on one conversation) and an opportunity to lead a project or task force. Edgar H. Schein developed four conceptions about motivation of people: a) Rational-economic assumption: based on the idea that people are primarily motivated by economic incentives b) Social assumptions: based on the idea that people are motivated by social needs. c) Self actualization assumptions: suggests that motives fall into 5 classes in a hierarchy ranging from simple needs for survival to highest needs of self actualization with maximum use of ones potential d) Complex assumptions: people are complex and variable and have many motives which combine into a complex pattern. A very important and often overlooked factor in managing people is creativity. Creativity is the ability to develop new ideas. Innovation is the ability to use these ideas. Most employees prefer to work in a place where they have the liberty to use their creativity and innovate. This freedom address their need to achieve their own goals and enables them to contribute to the company better in terms of new products, efficient ways to do existing activities, patents etc. for instance let us consider the leadership and motivation

in Google. Leaders encourage their group to be more innovative and creative by letting them communicate in a less stressful and casual environment. There are no official channels and so ideas flow more easily and are quickly implemented. The hierarchy of the company runs lateral instead of vertical to maximize creativity. Understanding the human factor is the key for the leading function. A managers view of the human nature influences the selection of motivational and leadership approaches. A manager must harmonize the needs of the individuals with the demands of the enterprise. Motivation refers to the entire class of drives, desires, needs, wishes and similar forces. Human motives are based on needs. Some of these are physiological requirements for water, air, sleep and shelter. Others are secondary such as self esteem, status affiliation, affection, accomplishment and self-assertion. Leaders can impact on innovation as motivators and as organizational architects. As motivators they might act as transformational or transactional leaders. As organizational architects they create the organizational context or environment within which innovation takes place. Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives. The ingredients of leadership can be summarized as a) the ability to use power effectively and in a responsible manner, b) the ability to comprehend that humans beings have different motivation forces at different times and in different situations, c) the ability to inspire and d) the ability to act in a manner that will develop a climate conducive to responding to and arousing motivations.

Controlling:

The controlling function involves monitoring what is the work actually being done and the results being achieved, comparing this with what was planned, and taking corrective action. The process of monitoring is to ensure that they are being accomplished as planned and of correcting any significant deviations. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) 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 quality or customer service. These standards could be defined as verifiable goals and objectives as per the Management by Objectives (MBO) principle. The purpose of control is to ensure that activities are completed in ways that lead to accomplishment of organizational goals. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the managers 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. Smith and Cronj state that the technical meaning of control in business is the process whereby management ensures that the actual works fit in with the predetermined goals and planned activities. The aim of control is to keep deviations from planned activities so that the goals can be achieved with fewer problems. Controlling involves assessing and monitoring performance, compare with set standards, identifying variants and taking remedial action. Management uses indicators they develop to both measure the organisation's actual performance, and then compare it to the figures they thought they would achieve. Once a performance comparison has been made, management can take corrective action if performance isn't up to scratch, or they can find ways to improve current performance even if things are going according to plan Managerial control is usually perceived as a simple feedback system. In order to overcome the time lags in control, it is suggested that managers use a feed forward control approach and not rely on feedback alone. Feed forward control requires designing a model of a process/system and monitoring inputs with a view to detecting future deviations of results from standards and plans thereby giving managers time to take corrective actions.

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 budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization. Budgets could be of the following types: Revenue and Expense; Time, Space, Material and Product; Capital Expenditure and Cash Budget. The problems with budgeting is that it could lead to over budgeting depriving supervisors the needed freedom in managing their departments; could cause overriding the enterprise goals; may be used to hide inefficiencies and cause inflexibility. One of the newer generation control tool is the Program Evaluation and review Technique which is a refinement of the Gantt chart. PERT provides a network with milestones connected with the time lines to complete each item. This sequence enables in identifying the critical path. The Balance score card is another exception tool that helps in the control. The advantage of this is that it clearly ties goals and objectives to the organizations vision, mission and strategy. It moves beyond the financial measurement of just goals and objectives. When properly designed, controls can lead to better performance by enabling the organization to execute its strategy better. Managers must weigh the cost and benefits of control, but some minimum level of control is essential for organizational survival and success.

Corporate Social Responsibility (CSR) Evolution of the CSR finds its beginning in the 1950s, which marks the modern era of CSR. Definitions expanded during the 1960s and proliferated during the 1970s. In the 1980s, there were fewer new definitions, more empirical research, and alternative themes began to mature. These alternative themes included corporate social performance (CSP), stakeholder theory, and business ethics theory. In the 1990s, CSR continues to serve as a core construct but yields to or is transformed into alternative thematic frameworks. A study by National Consumers League in 2007 has shown that "Consumers expect corporations to be engaged in their communities in ways that go beyond just making financial contributions" CSR is a business firms obligation, beyond that required by law and economics, to pursue long-term goals that are good for society. CSR can be looked at as the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society. For CSR, educational institution, charitable trusts, non-government organizations and others can be involved. Johnson and Johnson is one of the best examples of pioneering in CSR activities. Their Credo states We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens - support good works and charities and bear our fair share of taxes, We must encourage civic improvements like better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources Motorola's Global Service Day where the employees go out to do various community services like clean up drive, recycling drive, visiting orphanages, old age homes etc. A CSR strategy is crucial for managing the way your business deals with issues such as gender equality, managing foreign workers and well-being at work. It will help ensure your business has a positive impact on people and the environment, wherever it operates.

Why CSR? It shows the company's long term commitment and aids talent retention. There is a higher level of personnel satisfaction Significantly enhances brand image and reputation Increases sales and consumer loyalty

Growing expectation from consumers and investors to behave responsibly

The following companies stand out as prime examples of how social responsibility can be productively coupled with sound strategies to advance goodwill, while building sustainable and impressive businesses. They provide the leadership to demonstrate how marketers can pursue both objectives simultaneously. As such, socially conscious companies have stepped up their efforts with increasing effectiveness and productivity. These are examples for "how to get it done" so that we can effectively expand our efforts to give back. BEAUTY COMES FROM WITHIN: THE BODY SHOP The Body Shop is regarded as a pioneer of modern corporate social responsibility as one of the first companies to publish a full report on its efforts and initiatives. Founder Anita Roddick led her company to stand up for its beliefs and champion causes such as self-esteem, environmental protection, animal rights, community trade and human rights. From sponsoring posters in 1985 for Greenpeace to presenting a petition against animal testing to the European Union with 4,000,000 signatures, The Body Shop has contributed significantly to the causes it supports, and exemplifies how other companies can do the same. BREWED RESPONSIBLY: STARBUCKS COFFEE Starbucks Coffee has always focused on acting responsibly and ethically right from its start 1971. One of their main focuses is the sustainable production of green coffee. It created C.A.F.E. Practices - a set of guidelines to achieve product quality, economic accountability, social responsibility and environmental leadership. The company supports products such as Ethos Water, which brings clean water to the more than 1 billion people who do not have access. Ethos Water has committed to grants totaling more than $6.2 million.

Submitted by Jayaraj Wilson References Principles of Management by Harold Koontz, Heinz Weihrich, A. Ramachandra Aryasri Articles from the Internet