Items Description of Module

Subject Name Human Resource Management

Paper Name Development of Management Thoughts, Principles and Types

Module Title Functions of Management

Module Id Module no-11

Pre- Requisites Basic knowledge about the Functions of Management

Objectives  To study the Functions of Management

Keywords Management, Functions, Planning etc.

 QUADRANT-I

Module 11: Functions of Management

12.1 Learning Objective
12.2 Introduction
12.3 Nature of Management
12.4 Characteristics of management
12.5 Functions of Management
12.6 Summary

12.1 Learning Objective

After completing this module, you will be able to:
i. Understand the nature of management
ii. Understand the features of management
iii. Know about various functions of management

FUNCTIONS OF MANAGEMENT

12.2 Introduction

Management is applicable everywhere and has become indispensable in the modern world. Every
organization requires making of decisions, co-ordination of activities, and handling of people and control
of operation directed toward its objectives. Every business unit has objectives of its own. These objectives
can be achieved with the cooperative efforts of several personnel. The works of a number of persons are
properly coordinated to achieve the objectives through the process of management. So, management is an
essential ingredient for all organizations in the modern world to achieve its objectives. The functions of
the management are to plan, organize, and integrate activities and resources to achieve pre-determined
objectives. Planning includes formation of objects and polices without defining specially the object and
the policy framework within which the object has to be achieved, no business activity can be undertaken.
Once the object and policies have been laid down they have to be implemented into actual practice. The
process of implementing the object into actual practice becomes the executive function of management.

Management of modern organizations is a complex process. It is very difficult to understand the real
nature of this process without studying its various facets. In the process of managing, a manager performs
various functions for the achievement of predetermined objectives. Simply speaking, management is what
managers do. But the simply statement does not tell us much. Does it? In fact management involves
coordinating and supervision of the work activities of others in order to complete it in efficient and
effective manner. Many authorities and scholars on management have discussed the functions of
management. But they ate not agreed unanimously about the nomenclatures of the functions of
management. It was Henry Fayol who gave for the first time a functional definition of management. In
Fayol’s word, “To manage is to forecast and plan, to organize, to command, to coordinate and to control”.
12.3 Nature of Management

Although, management is a process of achieving desired results effectively and efficiently by conducting
different functions through communication, motivation and leadership. But, In order to understand the
nature of management, one should have to analyze first management as a Science, art and as a profession.

Management as a Science: What makes a discipline a science? Should the discipline involve the use of a
laboratory and a lab coat in order to be called a science? The hallmarks of a science are not the test tube
or the lab coat. Instead, they are implicit in the method of inquiry used by a discipline for gathering the
data. As a science, management has the following characteristics:

 Methods of inquiry are systematic and empirical.

 Use of scientific method to study the body of knowledge.
 Information can be ordered and analyzed.
 Cause and effect relationship.
 Universal applicability.
 Results are cumulative and communicable.
So, science refers to a systematized body of knowledge acquired through observation,
experimentation, research and analysis, and is verifiable through cause and effect relationship and
has universal applicability. In conclusion it can be said that management is neither a
comprehensive nor as exact as natural and physical sciences are. This is because management
deals with human behavior also. So, management would be most appropriate describe as “social
science”.

Management as an Art: Art is concerned with the understanding of how a particular work can be
accomplished. Under ‘science’ one normally learn the ‘Why’ of a phenomenon, under ‘art’ one learns the
‘How’ of it. Management is the art of getting things done through others in dynamic and mostly non-
repetitive situations. The essential components of art are personal creative power plus skill in
performance. As an art, management has the following characteristics:

 Practical application.
 Creative in nature.
 Personal skills
 Application of skill.
 Exercise of personal judgment.
 Emergence of experience.
 Utilization of human talent.
 It helps in achieving concrete results.

In conclusion, it can be said that management involves both elements- those of a science and an art. While
certain aspects of management make it a science, certain others which involve application of skill make it
an art.

Management as a Profession: A profession may be defined as an occupation by which apply the

intelligence and efforts for the purpose of providing skilled service or advice to others for an agreed
amount. As a profession, management has the following characteristics:
  Specialized Knowledge.
 Competent Application- Education and Training.
 Professional Body.
 Code of Conduct.
 Service Motive- charging of fee based on service.

In conclusion, it can be said that management has certain characteristics of profession or it can be said
that management meets the characteristics of profession in varying degrees. So, management is a fast
emerging profession and it is heading towards greater degree of professionalization.

12.4 Characteristics of management

Management is a distinct activity or the process of activity relating to the effective utilization of available
resources for manufacturing. Following are the characteristics or features of Management:

 Management is a continuous process: The management process consists of all the functions of
management ranging from planning, organizing, staffing, and directing to controlling. So, these
various managerial activities cannot be performed once for all, it is a continuous process. A
manager is busy sometimes in doing one managerial activity and at other times some other
activity. Thus management is a continuous process.
 Group Activity: Management is an essential ingredient of all organized endeavor. It means that,
it is not a single person who manages all the activities of an organization but it is always a group
of persons. Hence, management is a group effort. Mostly, in big organizations management is
defined as a group activity because many persons are associated in different activities.
 Multidisciplinary subject: It means that management is deeply indebted to various other
disciplines from which it has gained considerably. Management came to develop its own thoughts
and principles to fulfill the needs of the management of different organizations. Integrated
knowledge of various subjects like psychology, Sociology, anthropology, Economics has made a
valuable contribution to the management.
 Goal Oriented: Management is a purposeful activity. It coordinates the efforts of workers to
achieve the goals of the organization. It is required when some goals have to be achieved. A
manager on the basis of his knowledge and experience tries to achieve the goals which are
decided in advance. Hence, management is a goal-oriented process.
 Efficiency and effectiveness: Efficiency and effectiveness is the corner stone’s of management
process. Efficiency means performing the functions in a best manner with minimal cost and
effectiveness is concerned with the final result and involves choosing the right task and finishing
 that task on time. Efficiency and effectiveness are interrelated and when found together,
managerial and organizational performance gets optimized.
 Decision making: There are number of decisions taken by the management every day. A
decision represents the most appropriate behavior chosen from a number of alternatives to deal
with organizational problems. The quality of decision taken by the manager determines the
organizations performance. Managerial decision must facilitate the achievement of organizational
goals consistent with ethical and social dimensions of the organization.
 Universal Application: Management is universal in character. The principles and techniques of
management are equally applicable in the fields of business, education, military, government and
hospital. Thus, it is applicable to all organizations where the efforts of human being are to be
coordinated.
 System of Authority: Management as a team of managers represents a system of authority.
Managers at different levels possess varying degrees of authority which gets gradually reduced as
you go down in the hierarchy. Authority enables the managers to perform their functions
effectively.

12.5 Functions of Management

Management is playing a vital role in the progress and prosperity of a business enterprise. The main
purpose of management is to run the enterprise smoothly. Basically management functions are those
groups of activities, which constitute the core of basic responsibilities of a manager’s job. A brief
explanation of the basic functions of management is given below:

1. Planning: Planning is the primary function of management and involves the process of
determining objectives, discovering alternative cources of action, and selecting an appropriate
course of action for achieving objectives. In other words, planning is the determination of a future
course of action to achieve a desired result. Under planning, it is ascertained that what should be
done, how it should be done and who should do it. Before starting of a job all above mentioned
activities must be considered otherwise, the objectives of a business cannot be achieved. Planning
is a long process and under this the following steps are taken:
 Determination of Objectives: This is the first step in planning process. It is a
starting point as everybody in the organization must know what is to be achieved in
future. So, first of all, objectives are laid down after identifying the opportunities
available to a business organization. Objectives are the key point of the process of
 planning. Objectives should be clear, definite and simple so that it should be clear to
every employee of organization.
 Establishing Planning Premises: The second step in planning is to establish
planning premises, that is, certain assumptions about the future on the basis of which
the plan will be ultimately formulated. If these assumptions are accurate, the
planning process will be more useful. So, in this various factors which affect the
activities of an organization are determined. These are the external and internal
factors. External factors have no control and may be the policy of the government,
competition, change in customer habit etc. On the other hand internal factors include
capital, labour, machine, raw material etc. Planning premises point out the business
environment in which the plans will operate.
 Collection, Analysis and Classification of Information: For effective planning, all
relevant data should be collected, analyzed and classified. Suggestions should also
invite from employee for the betterment. The data so collected should be presented
in tabulated form, diagrams and graphs to facilitate analysis.
 Finding Alternative Courses of Action: The fourth step in planning is to search for
and examine alternative courses of action. In other words, the next step in planning
will be choosing the best course of action. There are a number of ways of doing a
thing. All the available alternatives should study and then a final selection will be
made. Best results will be achieved only when best way of doing a work is selected.
 Examination of alternative courses of Action: After looking into the entire
alternative course, the next step is to evaluate these alternatives courses technically
in the light of the premises and objectives. Each alternative is evaluated on the basis
of its outcome and advantages. The strong and weak point of each alternative should
be carefully noted and this is done with the help of quantitative techniques and
operation research.
 Selecting the best alternative: The next step is to select the best alternative. The
selection should be made carefully and no partiality is shown while selecting the
alternative.
 Developing Derivative Plans: When the plan for the organization has been
formulated, middle and lower level managers must draw up the appropriate plans for
their sub-units. To support the master plan, each department head prepares a plan for
his department. So, these are the plans required to support the basic plan.
  Communication and Implementation of plans: The next step in planning is to
communicate the plan to every manager in the organization so that they cooperate
whole heartedly in the implementation of plans. These tools will enable a better
implementation of plans.
 Follow-up action or controlling the progress: The process of planning does not end
with the implementation of plans. The plans are formulated for future which is
uncertain. There must be a constant review of the planning to ensure the success.
Managers need to check progress of their plans so that they can make changes in the
plan or take some remedial measure to bridge the gap, if it is unrealistic or
impractical.

2. Organizing: When the plans are laid down and the objectives specified, the next step is to
give practical shape to the work to be performed to attain those objectives. This task is
accomplished by the managerial function of organizing. Or we can say that, the process of
creating this structure of roles is known as organizing. Planning is just to put some idea in
writing, but to convert that idea into reality, a group of people is needed. Further, to
streamline the activities of this group of people, organizing is required. Under this, the whole
project is divided into various small jobs, to assign these jobs to designated, to unite various
jobs into one department, to clarify the rights and duties of employees, and to define
relationship among various posts. In a nutshell, organizing is structuring of functions and
duties to be performed by a group of people for the purpose of attaining enterprise objectives.
The organizing function establishes working relationship among employees by assigning
tasks and giving them enough authority to perform those tasks. Following steps are taken to
complete the organizing function of management:
 Identification of activities: In this stage of organizing process, a manager
identifies and determines those activities that are to be performed for achieving
common goals. It includes the division of all activities in order to achieve the
objectives of the organization. The entire work is divided into various parts and
again each part is divided into various sub-parts.
 Grouping of activities: The grouping of activities starts once the various
activities have been designed to achieve the objectives of the company. The
activities of the same nature are grouped together and assigned to a particular
department like purchase department, sales department.
  Allotment of Duties: In order to ensure effective performance, the grouped
activities are allotted to specific persons. At the time of making such
assignment, it is ensured that the department has required competence and
resources for performing that group of activities.
 Delegating Authority: Every individual is given the authority necessary to
perform the assigned duty effectively. By authority here mean power to take
decisions, issuing instructions, guiding the subordinates, supervise and control
them. Authority flow top to bottom and responsibility from bottom to top.
 Coordinating Activities: In the process of organizing, attempts are also made
for coordinating working of individual with respective department, and finally
to coordinate functioning of various departments towards the achievement of
common goals.
3. Staffing: It refers to knowing about the manpower requirements in the organization and filled
the various posts with suitable employees. An organization may succeed only if it has trained
staff in each and every department and this work is done by staffing. So, Staffing refers to
placement of right person in the right jobs. Staffing includes selection of right persons, training
to those needy persons, promotion of the best persons, retirement of old persons, performance
appraisal of all the personnel’s, and adequate remuneration of personnel. Thus staffing is
regarded as a unique and very important function because it is only through human force that
all other resources of the organization are utilized optimally.
Following steps are taken to complete the staffing function of management:
 Recruitment or getting applicants for the jobs as they open up.
 Selection of the best qualified from those who seek the job.
 Training those who need further instructions to perform their work effectively
or to qualify for promotion.
 Performance appraisal, since it serves as the basis for job change or promotion
 Administration of compensation plans, since it is important factor in both
getting and holding qualified people.
4. Directing: Directing function of management involves guiding, leading and motivating
subordinates so that they contribute towards achieving organizational objectives. It is done by
giving necessary instruction to them regarding the assigned work, and motivating them to perform
in a satisfactory manner. Communication, motivation and leadership are the essential elements of
directing function.
  Communication: Communication is the transmission of human thoughts, views and
opinions from one person to another. A manager has always tell the subordinates that what
has to be done, where it is to be done, how it is to be done and when it is to be done. Thus
communication is very important element in order to perform all activities of organization
effectively.
 Motivation: - It refers to that process which excites people to work for achievement of
desired objective. Motivation includes increasing the speed of performance of a work and
developing willingness on the part of the workers. This is done by a resourceful leader.
 Leadership: Leadership is at very centre of management that deals with ‘getting work done
through others’. Managers can get the work done through people either by exercising the
authority vested in them or by winning support, trust and confidence of the people. To
secure greater work performance and result from people, a manager has to increase his
influence over them. This incremental influence of a manager over his subordinates,
because of which they willingly and passionately cooperate in the attainment of
organizational goals, is referred to as leadership. The person who tries to influence are
called leader.
5. Controlling: The process of management begins with the planning function and concludes
with the controlling function. It involves comparison between the actual work performance and
the planned standards, and taking corrective steps when there is a difference between the two.
So, it is an important function of management and has following steps:
 Establishing performance standards: Every enterprise plans its activities in advance. On
the basis of plans, the objectives and goals of every department, branch, etc. are fixed.
Standards may be quantitative or qualitative. Most of the standards are expressed in
terms of quantity. Number of units produced, number of men, hours employed, total
cost incurred, revenue earned, the amount of investment etc.
 Measurement of actual performance: The performance should be compared with the
established standards. So, necessary information should be collected about the
performance. The effective management information system provides the necessary
information. There are several techniques which are used by the management to
measure the performance.
 Comparison of actual performance with standards: The next step in control process is
the comparison of actual performance with the standards set. When the actual
performance is not up to the level then causes for it should be pin-pointed. Necessary
steps are taken so that performance is not adversely affected.
 Taking corrective action: Management has to find out the causes of deviation before
taking corrective measure. The causes of deviation may be due to ineffective and
inadequate communication, defective system of wage payment, defective system of
selection of personnel, lack of proper training, lack of motivation, ineffective
supervision, etc. the management has to take necessary corrective action on the basis of
nature of causes of deviation.

12.6 Summary
The economic development of a county depends on management. Management coordinates all
organisational activities and produces a synergic effect. Managers are charged with the responsibility of
taking actions that will make it possible for individuals to make their best contributions to group
objectives. Managing as practiced is an art; the organized knowledge underlying the practice may be
referred to as a science. In this context science and art are not mutually exclusive but are complementary.
All managers carry out the functions of planning, organizing, staffing, leading, and controlling, although
the time spent in each function will differ and the skills required by managers at different organizational
levels vary. Managerial activities are common to all managers, but the practices and methods must be
adapted to the particular tasks, enterprises, and situations. The universality of management states that
managers perform the same functions regardless of their place in the organizational structure or the type
of enterprise in which they are managing.