FUNCTIONS OF MANAGEMENT:Planning, Organizing, Motivating, Staffing

<< IFE MATRIX:The Internal Factor Evaluation (IFE) Matrix, Internal Audit

FUNCTIONS OF MANAGEMENT:Customer Analysis, Product and Service Planning, Pricing >>

Strategic Management MGT603

Lesson 13

FUNCTIONS OF MANAGEMENT:

Objectives:

This lecture provides all the information regarding what are the core functions of management in a business

firm.

Functions of management

Functions of Management

Strategy Formulation

Planning

Strategy Implementation

Organizing

Strategy Implementation

Motivating

Strategy Implementation

Staffing

Strategy Evaluation

Controlling

Planning:

Planning is the:

Start of the process

Bridge between present and future

Increases likelihood of achieving desired results

Strategic Management MGT603

Planning

Forecasting

Establishing objectives

Planning

Devising strategies

Developing policies

Setting goals

The only thing certain about the future of any organization is change, and planning is the essential bridge

between the present and the future that increases the likelihood of achieving desired results. Planning is the

process by which one determines whether to attempt a task, works out the most effective way of reaching

desired objectives, and prepares to overcome unexpected difficulties with adequate resources. Planning is

the start of the process by which an individual or business may turn empty dreams into achievements.

Planning enables one to avoid the trap of working extremely hard but achieving little.

Planning is an up-front investment in success. Planning helps a firm achieve maximum effect from a given

effort. Planning enables a firm to take into account relevant factors and focus on the critical ones. Planning

helps ensure that the firm can be prepared for all reasonable eventualities and for all changes that will be

needed. Planning enables a firm to gather the resources needed and carry out tasks in the most efficient way

possible. Planning enables a firm to conserve its own resources, avoid wasting ecological resources, make a

fair profit, and be seen as an effective, useful firm. Planning enables a firm to identify precisely what is to be

achieved and to detail precisely the who, what, when, where, and why needed to achieve desired objectives.

Planning enables a firm to assess whether the effort, costs and implications associated with achieving

desired objectives are warranted. Planning is the cornerstone of effective strategy formulation. But even

though it is considered the foundation of management, it is commonly the task that managers neglect most.

Planning is essential for successful strategy implementation and strategy evaluation, largely because

organizing, motivating, staffing, and controlling activities depend upon good planning.

The process of planning must involve managers and employees throughout an organization. The time

horizon for planning decreases from two to five years for top-level to less than six months for lower-level

managers. The important point is that all managers do planning and should involve subordinates in the

process to facilitate employee understanding and commitment.

Planning can have a positive impact on organizational and individual performance. Planning allows an

organization to identify and take advantage of external opportunities and minimize the impact of external

threats. Planning is more than extrapolating from the past and present into the future. It also includes

developing a mission, forecasting future events and trends, establishing objectives, and choosing strategies

to pursue.

An organization can develop synergy through planning. Synergy exists when everyone pulls together as a

team that knows what it wants to achieve; synergy is the 2 1 2 5 5 effect. By establishing and communicating

clear objectives, employees and managers can work together toward desired results. Synergy can result in

powerful competitive advantages. The strategic-management process itself is aimed at creating synergy in an

organization.

Strategic Management MGT603

Planning allows a firm to adapt to changing markets and thus shape its own destiny. Strategic management

can be viewed as a formal planning process that allows an organization to pursue proactive rather than

reactive strategies. Successful organizations strive to control their own futures rather than merely react to

external forces and events as they occur. Historically, organisms and organizations that have not adapted to

changing conditions have become extinct. Swift adaptation is needed today more than ever before because

changes in markets, economies, and competitors worldwide are accelerating.

Organizing:

Achieve coordinated effort

Defining task and authority relationships

Departmentalization

Delegation of authority

Organizing

Organizational design

JJob specialization

ob specialization

Job specialization

Job descriptions

JJob specifications

ob specifications

Job specifications

Span of control

Organizing

Unity of ccommand

Unity of command

Unity of ommand

Coordination

Job design

Job analysis

The purpose of organizing is to achieve coordinated effort by defining task and authority relationships.

Organizing means determining who does what and who reports to whom. There are countless examples in

history of well-organized enterprises successfully competing against, and in some cases defeating, much

stronger but less-organized firms. A well-organized firm generally has motivated managers and employees

who are committed to seeing the organization succeed. Resources are allocated more effectively and used

more efficiently in a well-organized firm than in a disorganized firm.

The organizing function of management can be viewed as consisting of three sequential activities: breaking

tasks down into jobs (work specialization), combining jobs to form departments (departmentalization), and

delegating authority. Breaking tasks down into jobs requires development of job descriptions and job

specifications. These tools clarify for both managers and employees what particular jobs entail.

Combining jobs to form departments' results in an organizational structure, span of control, and a chain of

command. Changes in strategy often require changes in structure because new positions may be created,

deleted, or merged. Organizational structure dictates how resources are allocated and how objectives are

established in a firm. Allocating resources and establishing objectives geographically, for example, is much

different from doing so by product or customer.

The most common forms of departmentalization are functional, divisional, strategic business unit, and

matrix.

Strategic Management MGT603

Delegating authority is an important organizing activity, as evidenced in the old saying "You can tell how

good a manager is by observing how his or her department functions when he or she isn't there."

Employees today are more educated and more capable of participating in organizational decision making

than ever before. In most cases, they expect to be delegated authority and responsibility, and to be held

accountable for results. Delegation of authority is embedded in the strategic-management process.

Motivating

Influencing people to accomplish specific objectives

Communication is a major component

Motivating can be defined as the process of influencing people to accomplish specific objectives. Motivation

explains why some people work hard and others do not. Objectives, strategies, and policies have little

chance of succeeding if employees and managers are not motivated to implement strategies once they are

formulated. The motivating function of management includes at least four major components: leadership,

group dynamics, communication, and organizational change.

Motivating

Leadership

Communication

Work groups

Job enrichment

Motivating

Job satisfaction

Needs fulfillment

Organizational

change

Morale

When managers and employees of a firm strive to achieve high levels of productivity, this indicates that the

firm's strategists are good leaders. Good leaders establish rapport with subordinates, empathize with their

needs and concerns, set a good example, and are trustworthy and fair. Leadership includes developing a

vision of the firm's future and inspiring people to work hard to achieve that vision. Kirkpatrick and Locke

reported that certain traits also characterize effective leaders: knowledge of the business, cognitive ability,

self-confidence, honesty, integrity, and drive.

Research suggests that democratic behavior on the part of leader's results in more positive attitudes toward

change and higher productivity than does autocratic behavior.

Group dynamics play a major role in employee morale and satisfaction. Informal groups or coalitions form

in every organization. The norms of coalitions can range from being very positive to very negative toward

management. It is important, therefore, that strategists identify the composition and nature of informal

groups in an organization to facilitate strategy formulation, implementation, and evaluation. Leaders of

informal groups are especially important in formulating and implementing strategy changes.

Strategic Management MGT603

Communication, perhaps the most important word in management, is a major component in motivation. An

organization's system of communication determines whether strategies can be implemented successfully.

Good two-way communication is vital for gaining support for departmental and divisional objectives and

policies. Top-down communication can encourage bottom-up communication. The strategic-management

process becomes a lot easier when subordinates are encouraged to discuss their concerns, reveal their

problems, provide recommendations, and give suggestions. A primary reason for instituting strategic

management is to build and support effective communication networks throughout the firm.

Staffing

Personnel management

Human resources management

The management function of staffing, also called personnel management or human resource management, includes

activities such as recruiting, interviewing, testing, selecting, orienting, training, developing, caring for,

evaluating, rewarding, disciplining, promoting, transferring, demoting, and dismissing employees, and

managing union relations.

Staffing

Management

Wage & salary admin

Employee benefits

Interviewing

Hiring

Firing

Training

Staffing

Management development

Safety

Affirmative action

EEO

Labor relations

Career development

Discipline procedures

Staffing activities play a major role in strategy-implementation efforts, and for this reason human resource

managers are becoming more actively involved in the strategic-management process. Strengths and

weaknesses in the staffing area are important to identify.

The complexity and importance of human resource activities have increased to such a degree that all but the

smallest organizations now need a full-time human resource manager. Numerous court cases that directly

affect staffing activities are decided each day. Organizations and individuals can be penalized severely for

not following federal, state, and local laws and guidelines related to staffing. Line managers simply cannot

stay abreast of all the legal developments and requirements regarding staffing. The human resources

department coordinates staffing decisions in the firm so that an organization as a whole meets legal

requirements. This department also provides needed consistency in administering company rules, wages,

and policies.

Human resources management is particularly challenging for international companies. For example, the

inability of spouses and children to adapt to new surroundings has become a major staffing problem in

overseas transfers. The problems include premature returns, job performance slumps, resignations,

discharges, low morale, marital discord, and general discontent.

Strategic Management MGT603

Strategists are becoming increasingly aware of how important human resources are to effective strategic

management. Human resource managers are becoming more involved and more proactive in formulating

and implementing strategies. They provide leadership for organizations that are restructuring or allowing

employees to work at home.

Controlling

Ensure actual operations conform to planned operations

Controlling

Management

Quality control

Financial control

Sales control

Controlling

Inventory control

Expense control

Analysis of variances

Rewards

Sanctions

The controlling function of management includes all those activities undertaken to ensure that actual

operations conform to planned operations. All managers in an organization have controlling responsibilities,

such as conducting performance evaluations and taking necessary action to minimize inefficiencies. The

controlling function of management is particularly important for effective strategy evaluation. Controlling

consists of four basic steps:

1. Establishing performance standards

2. Measuring individual and organizational performance

3. Comparing actual performance to planned performance standards

4. Taking corrective actions

Measuring individual performance is often conducted ineffectively or not at all in organizations. Some

reasons for this shortcoming are that evaluation can create confrontations that most managers prefer to

avoid, can take more time than most managers are willing to give, and can require skills that many managers

lack. No single approach to measuring individual performance is without limitations. For this reason, an

organization should examine various methods, such as the graphic rating scale, the behaviorally anchored

rating scale, and the critical incident method, and then develop or select a performance appraisal approach

that best suits the firm's needs.

Management Audit Checklist of Questions

The checklists of questions provided below can help determine specific strengths and weaknesses in the

functional area of business. An answer of no to any question could indicate a potential weakness, although

the strategic significance and implications of negative answers, of course, will vary by organization, industry,

and severity of the weakness. Positive or yes answers to the checklist questions suggest potential areas of

strength.

Strategic Management MGT603

1. Does the firm use strategic-management concepts?

2. Are company objectives and goals measurable and well communicated?

3. Do managers at all hierarchical levels plan effectively?

4. Do managers delegate authority well?

5. Is the organization's structure appropriate?

6. Are job descriptions and job specifications clear?

7. Is employee morale high?

8. Are employee turnover and absenteeism low?

9. Are organizational reward and control mechanisms effective?

Table of Contents: