Question No. 1 - MMPC 01 - Management Functions and Organisational Processes - MBA and MBA (Banking & Finance)

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                            MBA and MBA (Banking & Finance)

MMPC 001 - Management Functions and Organisational Processes

MMPC-004/TMA/JULY/2022

Question No. 1. Briefly describe the functions of management and discuss their importance in the functioning of the organisations.

One of the most important activities that all of us engage in, is managing. Ever since human life started either to organize for food or shelter, the elements of management were subtly seen in all these activities. History also confirms the application of management techniques, which are visible even today. The Egyptian pyramids built centuries ago, are evidence of excellent organizational skills of scores of workers in those times, thus making us believe that a number of management functions were in use long ago. Similarly, Indus valley civilization also demonstrates the use of management techniques of a higher level of sophistication, considering the time it was built. Further, these instances also show that management has been an inherent part in human survival and organized activity as well. As societies grew, individuals could not achieve their goals individually and hence their efforts as a group had to be coordinated through the management function. The groups increased in number, thus making the role of the managers critical for success in the contemporary context. 

It is in this context that Mary Parker Folletthas defined “management as the art of getting things done through the efforts of others”. Although this definition relates to the accomplishment of the task and the people dimension, it has been elaborated further by Herald Koontz and O’Donnel, when they brought the organized group into the definition. According to them, “management is the process of getting things done though the organized group efforts”. The people dimension has been the focus of Harold Koontz, when they said “Management means Manage Men tactfully” to label itManage/Men/T As the meaning and definition evolved, the focus on the process gained importance. F W Taylor defined management “as the art of knowing what you want to do in the best and cheapest way”In spite of various definitions, the dynamic nature of management makes it difficult to have a universally accepted definition encompassing all its dimensions in its entirety. In summary, the essence of management revolves around managing people and other resources in an organization both internal and external, leading to the achievement of the objectives of the organization. The meaning could be better understood by examining the nature of management.

All managers, irrespective of the level- top, middle and lower –perform management functions. However, the time spent by the managers on these activities differ based on the level at which there are placed. For example, the top managers spent more time on planning and organizing whereas, middle level managers spend more time on leading the group directing and controlling. Similarly the lower level spend more time on organizing themselves to execute the task. The primary functions of management are generally grouped under five heads- Planning, organizing, staffing, directing and controlling (Figure 1 as proposed by Koontz O’ Donnel)

Different thinkers explained the functions in different ways. Luther Gullick discussed the function of management through the acronym –POSDCoRB which relate to 

P- Planning 

O-Organizing 

S-Staffing 

D-Directing 

Co-Coordinating 

R-Reporting 

B-Budgeting 

According to Gullick, managers generally perform these functions in the course of their work.Henry Fayol has listed the acronym POCCC as the functions of management. According to him, managers perform five functions. They are

P- Planning 

O-Organizing 

C-Coordinating 

C-Controlling 

C-Commanding 

In general, the primary functions of management are categorized into five functions - Planning, Organizing, Staffing, Directing and Controlling. According to management thinkers, the controlling function includes coordinating, reporting and budgeting. The functions are discussed below.

1. Planning 

Planning is preparation for future action. It relates to an activity which bridges the gap between the present and future. The planning functions starts after the broad organizational objectives are spelt out to decide the future course of action. This is an all pervasive function and hence applies to all the levels of management. The functions includes setting objectives, strategies, policy formulation and the consequent laying down of the procedures and programs for the achievement of objectives. It is future oriented and determines the direction in which the organization is moving. This function involves the ability to foresee the effects of current action in the long run. Planning incorporates both external and internal factors. Some of the external factors include- organizational ability to borrow finances, raw materials, economic environment, advancement of technology, global and national policy etc., while the internal factors include organizational policy, intellectual capital, the financial stability of the organization etc. Planning thus, is a continuous activity and determines the future of the organization.

2. Organizing 

Organizing is related to the structure of an organization with clearly defined lines of authority and responsibility, through which the work is allotted, monitored and coordinated so that each division and department relate to each other to work together for the achievement of organizational objectives. It involves activities like delegation, fixing authority and responsibility for a smooth conduct of work. Thus, it involves the identification of tasks, assigning the tasks, defining and delegating the authority and establishing clear lines of authority and responsibility. The functions also include the blending together of the different factors and actors so that it results in a smooth function in the organization.

3. Staffing 

Staffing relates to finding the right people for the right job in the given structure of the organization. It starts with the design of the job, identifying the job, job analysis, thus, paving the way for the recruiting, selecting, placing the people initially and promoting them at later stage. It also includes the functions of developing the people through training for efficient and effective functioning of their assigned work. Thus, it involves the activity of hiring and retaining the people with skills, competencies, knowledge and right attitude which makes the functions very critical in organizational success.

4. Directing 

This functions involves providing good leadership, communication channels, Motivation and supervision so that employees are able to function efficiently to attain the desired goals. It consists of the process and techniques which issues the required instruction and monitoring the operation for smooth functioning. The managers communicate and transmits the message for smooth flow of work. The organizational experience has enough evidence of miscommunication or improper communication leading to organizational failure across the world. It’s thus, a critical element in the function of direction. Similarly, teams and groups of people require proper guidance from the leaders for effective functioning. Leadership relates to the process of influencing the behavior of people on the job. Leaders motivate the individuals and influence them towards the achievement of individual, group and organizational objectives. Monitoring and supervising the work of the group provides the assurance of the goal of accomplishment in line with the plan. This activity tracks the progress of the groups and provides the confidence to the leader that the directions are being properly carried out.

5. Controlling 

The function of control consists of those activities that are undertaken to influence that there is no deviation in the plan. The control process includes setting of the standards, performance target and measures along with corrective action that is taken at different stages of the control process. This function is always misunderstood and throws up a negative connotation of restricting people in their job. This function aims at checking whether organizational objectives are met and action that could be taken in future as the work is in progress. Normally, the budgets, the audit of records, pay roll of employees, the items of expenditure etc. are common examples of checking deviation. This function provides the leads to the planning function by monitoring and checking the deviations. An organization performs these five functions of management which are closely interrelated, yet distinct from each other.