MANAGEMENT THEORY
Functions of Management
Management has been described as a social process involving responsibility for economical
and effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements an...
1 planning it is the basic function of management it deals with chalking out a future course of action amp deciding in advance the most appropriate cours
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MANAGEMENT THEORY
Functions of Management
Management has been described as a social process involving responsibility for economical
and effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements and activities. These
activities are different from operative functions like marketing, finance, purchase etc. Rather
these activities are common to each and every manger irrespective of his level or status.
Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating
and controlling”.
According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, &
to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for
reporting & B for Budgeting. But the most widely accepted are functions of management
given by KOONTZ and O’DONNEL
i.e. Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.
1. Planning
It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. According to KOONTZ, “Planning is deciding in advance -
what to do, when to do & how to do. It bridges the gap from where we are & where
we want to be”. A plan is a future course of actions. It is an exercise in problem
solving & decision making. Planning is determination of courses of action to achieve
desired goals. Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals. Planning is necessary to ensure proper
, utilization of human & non-human resources. It is all pervasive, it is an intellectual
activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.
2. Organizing
It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, “To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.
To organize a business involves determining & providing human and non-human
resources to the organizational structure. Organizing as a process involves:
Identification of activities.
Classification of grouping of activities.
Assignment of duties.
Delegation of authority and creation of responsibility.
Coordinating authority and responsibility relationships.
3. Staffing
It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc. The main
purpose o staffing is to put right man on right job i.e. square pegs in square holes and
round pegs in round holes. According to Kootz & O’Donell, “Managerial function of
staffing involves manning the organization structure through proper and effective
selection, appraisal & development of personnel to fill the roles designed un the
structure”. Staffing involves:
Manpower Planning (estimating man power in terms of searching, choose the
person and giving the right place).
Recruitment, Selection & Placement.
Training & Development.
Remuneration.
Performance Appraisal.
Promotions & Transfer.
4. Directing
It is that part of managerial function which actuates the organizational methods to
work efficiently for achievement of organizational purposes. It is considered life-
spark of the enterprise which sets it in motion the action of people because planning,
organizing and staffing are the mere preparations for doing the work. Direction is that
inert-personnel aspect of management which deals directly with influencing, guiding,
supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:
Supervision
Motivation
Leadership
Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the
act of watching & directing work & workers.
, Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal
to work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
Leadership- may be defined as a process by which manager guides and influences
the work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from
one person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is
the measurement & correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:
a. Establishment of standard performance.
b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out
deviation if any.
d. Corrective action.
Classical management theory
Classical management theory is based on the belief that workers only have physical and
economic needs. It does not take into account social needs or job satisfaction, but instead
advocates a specialization of labor, centralized leadership and decision-making, and profit
maximization.
Designed solely to streamline operations, increase productivity and enhance the bottom line,
this idea arose in the late 19th century and gained prominence through the first half of the
20th century. While not widely subscribed to in modern times, this theory offers some
principles that remain valid, to an extent, in small business settings in regards to
manufacturing.
Concepts of the Ideal Workplace
The theory outlines an ideal workplace as one that rests on three main concepts:
Hierarchical structure – Under classical management theory, workplaces are
divided under three distinct layers of management. At the very top are the owners,
, board of directors and executives that set the long-range objectives for a firm. Middle
management takes on the responsibility of overseeing supervisors while setting goals
at the department level to fit within the confines of the managers’ budget. At the
lowest level of the chain are supervisors, who manage day-to-day activities, address
employee problems and provide training.
Specialization – The classical management theory involves an assembly line view of
the workplace in which large tasks are broken down into smaller ones that are easy to
accomplish. Workers understand their roles and typically specialize in a single area.
This helps increase productivity and efficiency while eliminating the need for
employees to multi-task.
Incentives – This theory believes that employees are motivated by financial rewards.
It proposes that employees will work harder and be more productive if they are
awarded incentives based on their work. Employers who can motivate their
employees using this tactic may be able to achieve increased production, efficiency
and profit.
The autocratic leadership model is the central part of classical management theory. In this
system, there is no need to consult large groups of people for decisions to be made. A single
leader makes a final decision and it is communicated downward for all to follow. This
leadership approach can be beneficial when decisions need to be made quickly by one leader,
rather than a group of company officials.
Strengths of the Theory
While not typically used in today’s workplaces, the classical management theory does have
some strong points. They include:
A clear structure for management, its functions and operations
The division of labor that can make tasks easier and more efficient to accomplish,
which can enhance productivity
Clear definition of employee roles and tasks with little left to guesswork
Flaws in the Model
When the theory is put into action, companies can see their production numbers increase.
There are, however, some flaws that make this particular management model less than
attractive in workplaces. These pitfalls include:
By attempting to predict and control human behavior, this theory overlooks the
importance of human relations and creativity.
In essence, this theory views workers almost as machines, but fails to take into
account what job satisfaction, employee input and morale can bring to the workplace.
The reliance on prior experience and the ability to apply it almost solely to
manufacturing settings is another drawback of this theory.
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