MODULE - THE ESSENTIAL MANEGERIAL FUNCTIONS

Introduction

Management is a collaboration of efforts, knowledge and skills towards the achievement of a common goal the
realization of the organization’s vision, mission, goals and objectives. Good management should therefore
include the principles of effectiveness and efficiency. To be effective is doing the appropriate tasks to meet the
corporate goals while to be efficient is to attain these goals with minimum discarded resources.

In today’s varying business conditions, organizational leaders or managers have to adopt themselves in
changing environment. They have to seriously consider the application of the different management principles
embodied in the four essential management functions - planning, organizing, directing or leading, and
controlling. These functions are inseparable and there are times that they are overlapping with one another.
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PLANNING FUNCTION

Planning Defined

Planning is deciding in advance what to do, how to do, and who is to do it.
(Koontz and O'Donnel)

Urwick defines planning as a mental predisposition to do things in orderly way, to think before acting and to act
in the light of facts rather than of guesses.

Steps in Planning
Planning is writing future courses of actions that will help management achieve the goals of the company. And
this involves the following steps:
1. Establish the objectives. It is the heart of the planning process. Objectives must he precise, written
using simple words and must he stated in quantitative terms like units of production, number of people
to do the job and the salaries to be paid. There are also some objectives that cannot be quantified;
instead, they arc expressed qualitatively like the effectiveness of the workforce and the quality of
work or performance of managers.

2. Determine the planning premises. The premises or bases maybe internal or external. Internal includes
management labor relations, investment policy, management ideas, etc. while external premises are
the socio-economic, political and economic factors which are uncontrollable by the organization.

3. Choosing the best alternative course of action. There should be alternatives, each of which should be
evaluated as to its pros and considering the resources available and what the organization requires.

4. Devising the secondary or sub plans which flow from the basic or main plan and will support its
materialization. Examples of detail plans are policies, procedures, rules and regulations, budgets,
schedules. If the goal is maximizing profit, sub plans include maximizing production and sales and
minimizing costs.

5. Encouraging the cooperation and support of the subordinates. This can be done by soliciting suggestions
from them

6. Implementing the plan and evaluating or appraising the outcome to correct or modify any deviation.
This last step will create the connection between the first and the last management function- planning and
controlling.
Characteristics of Planning
• It is goal-oriented
• It is based on forecasting
• It involves creative thinking, sound judgement, and imagination
• It involves choice and decision making
• It is the foundation of all other management functions
• It is a non-stop process
• It is extensive or pervasive
• Its goal is efficiency
• It is adaptable
• It minimizes risk and uncertainty
• It eases coordination in the organization
• It facilitates optimum utilization of resources and reduces wastages
• It is the basis for controlling
• It offers competitive edge
• It nurtures innovations

Types of Plans
Plans are blueprints used to achieve the goals of the organization. It details the needed resource allocations, the
tasks to be done, the schedules, and other actions and means of attaining the corporate objectives.
Managers achieve the organization's goals with the aid of the following types of plans:
• Strategic plans
• Tactical plans
• Operational plans
A strategic plan is a summary of steps devised with the goals of the whole organization in mind, rather than
with the goals of specific divisions or departments. Strategic planning starts with the conception of the
organization's mission.
Strategic plans are long-term. These plans will bring the organization from where it is now to where it wants to
be over the next two, three, four, five years or more. The harmony or cooperation of all levels of management
within the organization is demanded by this kind of plan.

A tactical plan enumerates in details what the lower level units within each division must do, how they must do
it, and who is in charge at each level. Tactics are the means needed to make a strategy works.

Tactical plans have shorter time frames and narrow scopes as compared with strategic plans. These plans which
are considered short-range goals usually age one year or less.

Operational goals are the specific outcomes or outputs expected from individuals, work groups or departments.
These are clearly defined and measurable. Managers, to achieve this kind of goals utilize operational plans to
support the tactical plans.

Operational plans are categorized as:

• Single-use plans - are used to non-recurring activities. Example is a budget.

• Continuing or on-going plans - are devised once and used over a period of time or years with periodic
revisions. Examples of on-going plans are:
>Policy - is a broad guideline to be followed by managers in important aspects of decision making.
>Procedures- are step-by-step instructions that detail how activities or duties are to be accomplished.
>Rules - are the dos and don'ts of an employee to promote the safety and uniformity in treating
employees and their behaviors.

In addition to the three major types of plan mentioned above, another type of plan required of a manager is
contingency plans. This is what many management leaders described as "keeping all options open” approach.
These are the alternative courses of actions that can be applied if and when the basic or original plan seems to
be inadequate due to changing conditions and circumstances.

ORGANIZING FUNCTION

Organizing Defined
Organizing is the second function of management which involves combining and harmonizing the three
categories of resources - human, financial, physical - to achieve the best results for the organization.
Organizing is a function which is concerned with defining the role positions, the jobs related, the coordination
between authority and responsibility. (Chester Barnard]
The organizing process converts plans to reality through the use of people and other resources within the
organizational structure.

Concepts of Organizing
Organizing to be effective should depend on important concepts: work specialization, chain of command,
authority, delegation, span of control, and centralization versus decentralization. These concepts are some of the
principles developed by Henri Fayol.
• Work specialization,
• Chain of command,
• Authority, delegation,
 • Span of control, and
• Centralization versus decentralization
The degree to which organizational tasks are divided into separate jobs is called work specialization, which is
also sometimes called division of labor.
Allocating the tasks amongst the subordinates will be dependent on their qualifications, abilities and skills.
The chain of command is an unbroken line of authority that bonds all persons in an organization and defines
who reports to whom. This chain has two underlying principles:

• Unity of command
• Scalar principle.

Unity of command is the principle that states that an employee should have one and only one supervisor to
whom he or she is directly responsible. An employee should not report to two or more people. Otherwise, he or
she may receive conflicting demands or priorities from several supervisors at once, placing him in a no-win
situation.

The scalar principle refers to a clearly defined line of authority that includes all employees in the organization.
Authority is the formal and lawful right of a manager to make decisions, issue orders, and allocate resources to
achieve organizationally desired outcomes.
Three important essential principles of organizational authority are as follows:

• Authority is based on the organizational position.

• Authority is accepted by subordinates,
• Authority flows down the vertical hierarchy.

Three types of authority:

• Line authority. This is the right of a manager to direct the work of his or her employees and make
many decisions without consulting others.
• Staff authority. This limited authority supports line authority by advising, servicing, and assisting.
• Functional authority. This kind of authority delegated an individual or department over specific
activities undertaken by personnel in other departments.
Delegation is the downward transfer of authority from a manager to a subordinate.

Four steps to a successful delegation of responsibilities:

1. Specifically assign tasks to individual team members.

2. Give team members the correct amount of authority to accomplish assignments.
3. Make sure that team members accept responsibility.
4. Create accountability. Accountability means answering for one's actions and accepting the
consequences.
Span of control or span of management is the principle referring to the number of workers reporting to one
manager. The span can be wide or narrow.
There is a wide span of management when a manager has a large number of people under him or her. General
indications of a wide span of control include the competency of the manager and the subordinates, well-
established standard operating procedures of the organization, and rare new problems anticipated.

A narrow span of management, on the other hand, exists when there are only few subordinates handled by the
manager. It should be narrow when the workers are physically far from one another, when there is a big deal of
interaction needed between the superior and the subordinates and when there are new problems arise more
often.

Centralization refers to the concentration of authority and decision -making rest in few hands specifically at the
top level management of the organization. Significant decisions are for the top management to take and the
other levels are into the implementation upon instructions from the top level.

On the other hand, decentralization is the organized delegation of authority at all levels of management in any
organization. Top management attempts to spread authority to the lower level in the organization.

STAFFING FUNCTION

Staffing Function Defined

Staffing function refers to the recruitment, selection, development, and compensation of subordinates (Theo
Haimann).
According to Kootz & O'Donell, “Managerial function of staffing involves manning the organization structure
through proper and effective selection; appraisal and development of personnel to fill the roles designed in the
structure”.

The main purpose of staffing is to put the right people on the right job.

Steps involved in Staffing

1. Manpower planning. This involves forecasting and determining the manpower needed by the
organization.
2. Recruitment. After the manpower required are known, the concerned department invites applicants to
the different positions.
3. Selection. This involves the screening of the applicants and taking in the qualified applicants.
4. Orientation and Placement. In this stage, the chosen applicant is familiarized with the work units and
the working environment by means of orientation programs. Prepared by the HR department.
5. Training and Development. Trainings are given to employees to help them grow in the organization.
Development involves giving employees important jobs as a test of their performances.
6. Remuneration. This is the monetary compensation given to the employees for the work done.
7. Performance Evaluation, this is the assessment of the performances of the employees. This is keeping
track of the behavior, attitudes, and opinions on the jobs.
8.Promotion and Transfer. This involves the shifting of a worker to a higher job requiring bigger
responsibilities. Employees can also be transferred to a different work units or branches of the same
organization.
Following is the detailed discussion of the steps in the staffing functions mentioned above.
Manpower Planning

Manpower Planning which is also called as Human Resource Planning consists of putting right number of
people, right kind of people at the right place, right time, doing the right things for which they are suited for the
achievement of goals of the organization.
The steps in manpower planning

1. Analyzing the current manpower inventory.

In performing this step, the following factors have to be considered:
• Type of the organization
• Number of the departments
• Number of work units in every department
• Employees in each department

2. Making future manpower forecasts.

Once the factors that will serve as basis of making manpower forecasts are known, the planning for the
manpower requirements can be done using the following methods:

• Forecasts: This includes informal decisions, formal expert surveys and Delphi technique.
• Expert Trend Analysis: Manpower needs can be projected through extrapolation (projecting past
trends), indexation (using base year as basis), and statistical analysis (central tendency measure).
• Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a
division.
• Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have
to be made for getting net manpower requirements.
• Other methods: Several Mathematical models, with the aid of computers are used to forecast
manpower needs, like budget and planning analysis, regression, and new venture analysis.

3. Developing employment programs.

After the current inventory is compared with forecasts, the employment programs are framed and
developed accordingly. This programs which will include recruitment, selection procedures and placement
plans.

4. Design training programs.

The training programs will be dependent on the extent of diversification, expansion plans, development
programs, etc. It is also done to improve upon the skills, capabilities, knowledge of the workers.

Importance of Manpower Planning

Following are the significance of manpower planning:

• Staffing is a key to all managerial functions,
• Efficient utilization of people.
• It comprises motivational aspects on the employees.
• It posters better human relations.
• It aids in higher productivity
Recruitment
Recruitment is inviting applicants to the different positions in the organization.

Types of Recruitment

• Internal Recruitment - is a recruitment which takes place within the organization. It may lead to
increase in employee's productivity as their motivation level Increases. It also saves time, money and
efforts.

Internal sourcing can be done through

• Transfers
• Promotions (through Internal Job Postings) and
• Re-employment of ex-employees - Re-employment of ex-employees is one of the internal sources of
recruitment in which employees can be invited and appointed to fill vacancies in the concern. There
are situations when ex-employees provide unsolicited applications also.
• External Recruitment - External sources of recruitment have to be solicited from outside the
organization. It involves lot of time and money.

The external sources of recruitment include:

• Employment at factory gate,

• Advertisements
• Employment exchanges
• Employment agencies
• Educational institutions
• Labor contractors
• Recommendations

Employee Selection Process

Employee Selection is the process of putting right men on right job. Selection is different from recruitment.
Recruitment is motivating people to apply for the job, thus, creating a pool of applicants while selection is
choosing the best applicant or candidate for the required jobs.

Steps in the Selection Process

1. Preliminary Interviews- sometimes called the screening interviews, is used to disregard candidates
who do not meet the minimum criteria laid down by the organization. This interview is less formal
and the skills, academic and family background, competencies and interests of the candidate are
scrutinized. The candidates are also assessed on how much he/she knows about the company.

2. Application blanks- The candidates who passed the preliminary interview are required to fill
application blank. It contains data record of the candidates such as details about age, qualifications,
reason for leaving previous job, experience, etc.

3. Written Tests- Various written tests conducted during selection procedure are aptitude test,
 intelligence test, reasoning test, personality test, etc. These tests are used to objectively assess the
potential candidate.

4. Employment Interviews- It is a one to one interaction between the interviewer and the potential
candidate. It is used to find whether the candidate is best suited for the required job or not.

5. Medical examination- Medical tests are conducted to ensure physical fitness of the potential
employee. It will decrease chances of employee absenteeism.

6. Appointment Letter- A reference check is made about the candidate selected and then finally he is
appointed by giving a formal appointment letter

Orientation and Placement

Placement is said to be the process of fitting the selected person at the right job or place, i.e. fitting square pegs
in square holes and round pegs in round holes. Once he is suited into the job, he is given his job description and
he is also given the proper orientation to familiarize and introduce the company to him.

Generally, the following information was given daring the orientation program:

• Employee's layout
• Type of organizational structure
• Departmental goals
• Organizational layout
• General rules and regulations
• Standing Orders
• Grievance system or procedure

Training and Development

Training is the process of enhancing the skills, capabilities and knowledge of employees for doing a particular
job.

The benefits of training

• Improves morale of employees- Training helps the employee to get job security and job satisfaction.
The more satisfaction the employee has, the higher his morale, the more he will contribute to
organizational success.
• Less supervision- A well- trained employee will need less of supervision. Thus, there will be less
wastage of time and efforts,
• Fewer accidents- The more trained an employee is, the less are the chances of committing accidents or
errors in the performance of his job and the more proficient he becomes.

• Chances of promotion- Employees acquire skills and efficiency during training. They become more
eligible for promotion. They become an asset for the organization.
 • Increased productivity- Training results to good quantity and quality performance of an employee.
There will be less wastage of time, money and resources.

Methods of Training

• On the job training- On the job training methods are given to employees within the everyday working
in an organization. The employees are trained in actual working scenario. The motto of such training
is "learning by doing." Examples are job-rotation, coaching, temporary promotions, etc.

 Off the job training- Off the job training methods are those provided away from the actual
working condition. Examples of off the job training methods are workshops, seminars,
conferences, etc. Such method is costly and is effective if and only if large number of employees
have to be trained within a short time period. Off the job training is also called as vestibule
training, i,e„ the employees are trained in a separate area (may be a hall, entrance, reception area,
etc. known as a vestibule) where the actual working conditions are duplicated.

Remuneration

Employee Remuneration refers to the reward or compensation given to the employees for their work
performances
Methods of Remuneration

• Time Rate Method - Under time rate system, remuneration is directly linked with the time spent or
devoted by an employee on the job. The employees are paid a fixed pre-decided amount hourly, daily,
weekly or monthly irrespective of their output.
• Piece Rate Method It is a method of compensation in which remuneration is paid on the basis of units
or pieces produced by an employee. In this system emphasis is more on quantity output rather than
quality output

DIRECTING FUNCTION
Directing Function Defined
Directing is a function of how to supervise and motivate people to do their best towards the attainment of the
organization's goal. It is accomplishing tasks through people. These workers are driven by their motives like
desire for money, success, recognition, job-satisfaction, team work, etc.
Directing is the heart of the management process and the focal point of accomplishing the goals of an
organization. Without directing function, all the other management functions will be futile.

Characteristics of the Direction function

• Pervasive Function - All levels of organization require direction.

Every manager should provide guidance and inspiration to his subordinates.
• Continuous Activity - As long as the organization is alive so is the presence of this continuous
activity.
• Human Factor - this function is related to people or subordinates.
The complexity of human factor and the unpredictability of their behavior make this function very
significant in the achievement of the company's goals.
• Creative Activity - Direction function aids in transforming plans into performance. It absence will
 make people immobile and physical resources meaningless.
• Executive Function -This function is carried out by all managers and executives at all levels and
subordinates receive instructions from his superior only.

Significance of Directing Function

A few philosophers call Direction as "Life spark of an enterprise". It is also called as an actuating function of
management simply because the operation of an enterprise actually starts with direction. The benefits of this
function include the following:
• It Initiates Actions - Directions is the function which is the starting point of the work performance of
subordinates.
• It Ingrates Efforts - Through direction, the superiors are able to guide, inspire and instruct the
subordinates to work. For this,efforts of every individual towards accomplishment of goals arc
required. It is through direction the efforts of every department can be related and integrated with
others.
• Means of Motivation - Direction function is a great factor in achievement of goals. A manager, in
performing this function, makes use of motivation to make his subordinates give their bests.
Incentives - monetary or nonmonetary are prov ided to boost the morale of the subordinates.
• It Provides Stability - Stability is of great importance as an index of growth in any organization.
Managers can achieve stability by employing the four elements of directing: leadership,
communication, supervision, and motivation,
• Coping up with the changes - Subordinates are generally resistant to change. Changing environment
plays also a big role in the achievement of goals of an institution. It is the role of a manager to
communicate as part of his directing function any change, its effects in the achievement of goals and
its impact on the lives of his people
• Efficient Utilization of Resources - Direction helps in defining the role of every subordinate in the
achievement of the organizational goals. This will result in the maximum utilization of resources -
people, machine, and money, less costs and more profit.

Elements of Directing
• Leadership
• Communication
• Supervision
• Motivation

Leadership is a conduct by which a manager guides his people, influence the works of his subordinates to a
desired direction.
Communication is a two-way process of reaching mutual understanding among participants. It is not just an
exchange of information, ideas or feelings but it should create and share meanings as well as connecting people
particularly in any organization.

Supervision implies monitoring and policing the work of subordinates by their superiors. It an act of overseeing
subordinates and their actions or performances and making sure that everything is done are directed.
Motivation is an element of directing which is also considered by many as one of the most important function
of management. It is a process of stimulating people in the organization to give their best of their abilities to
accomplish the goals.
CONTROLLING FUNCTION
Controlling Function Defined
Controlling is a process of management that involves verification of whether the things that occurred in the
organization conformed to the adopted plans, issued instructions or directions and established principles. It
safeguards the effective and efficient use of the organization's resources towards the achievement of the planned
goals or objectives. In the control process, it is not only the conformities but also the deviations of actual
performance from the standard performance are analyzed so that corrective actions will be undertaken.

Two Basic Purposes of Controlling Function

• It facilitates coordination
• It aids in planning

Characteristics of controlling function

• It is an end-function. Controlling took place after the first three management functions are observed
and done.
• It is a pervasive function. Controlling is performed by all managers at all levels and all areas of concern
in the organization,
• It is forward looking. This function is always geared for the future, be it for maintaining the current
outcome, improving or changing for the better if possible.
• It is a dynamic process. It helps managers in better decision -making process.
• It is related to planning. Controlling has no essence without planning and planning is useless without
controlling. These two functions are inseparable.
• Planning precedes controlling and controlling succeeds planning.

The Objectives of Controls

• Controls make plans effective
• Controls make sure that organizational activities are consistent.
• Controls make organizations effective.
• Controls make organizations efficient.
• Control provide feedback on project status
• Controls aid in decision making
Standards are yardsticks of performance. They are the plans or the targets to be achieved. Standards can be
measurable or tangible or non-measurable or intangible. Examples of measurable standards are costs, output,
expenses, time, and profit. Non-measurable standards include performances of managers, attitudes towards any
concern. Controlling is practiced on the basis of these standards. Standards can be set on quality, quantity, time,
and finances.
Measuring performance is the second step in the controlling process. Quantitative measurement is easy for
tangible standards as it can be expressed in terms of units, money terms, costs, etc, but for intangibles,
measurement becomes difficult.

Performance can be measured through:

• Personal observation
• Statistical reports
• Oral reports
• Written reports
• 'Management by Walking Around"
• Direct interaction with employees
• Exchanging information
Actual and standard performances arc compared. Deviations are identified, if any. It can be positive or negative,
but in both cases, managers have to look into the causes of such divergence and unfavorable variances should
be looked upon seriously. Some causes of deviations are erroneous planning, loose coordination, defective
implementation of plans and ineffective supervision and communication.

After the variances were identified, taking remedial actions follows. After the corrective measures are done and
still the actual performances do not conform to the plans, then the manager has the option to change the targets
and the controlling function ended.

Types of Controls

Controlling is said to be done after the First three management functions are accomplished. In our
characteristics, it is an end-function but management can also exercise control on activities even before or
during the process.
* Feedforward controls - sometimes called preliminary or preventive controls identify and prevent
deviations from standards before they occur. This type of control is directed towards human,
materials, and financial resources within the organization.
* Concurrent controls are those which rely on performance standards, rules, and regulations aims to
monitor employee's ongoing activity to ensure consistency with the plans or standards. This also helps
in monitoring employees' tasks and behaviors.
* Feedback controls are utilized in reviewing data or information at certain periods to ascertain whether
the actual performance meets the standards.