Functions of Management in Business Organizations

Managers perform certain activities or duties as they effectively and efficiently coordinate the work of others. In the early part of the twentieth century, a French industrialist named Henri Fayol first proposed that all managers perform five functions: planning, organizing, commanding, coordinating, and controlling. In the mid-1950s, a management text book first used the functions of planning, organizing, staffing, directing and controlling as a framework. Today, most management text books still continue to be organized around the management functions, although they have been condensed to four basic and very important ones: planning, organizing, leading, and controlling. Let us briefly define what each of these management functions encompasses.

If you have no particular destination in mind, then you can take any road. However, if you have some place in particular you want to go, you have got to plan the best way to get there. Because organizations exist to achieve some particular purpose, someone must clearly define that purpose and the means for its achievement. Management is that someone. Managers perform the planning function, define goals, establish strategies for achieving those goals, and develop plans to integrate and coordinate activities.

Managers are also responsible for arranging work to accomplish the organization’s goals. We call this function organizing. When managers organize, they determine what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.

Every organization includes people, and a manager’s job is to work with and through people to accomplish organizational goals. This is the leading function. When managers motivate subordinates, influence individuals or teams as they work, select the most effective communication channel or deal in any way with employee behavior issues, they are leading.

The final management function is controlling. After the goals are set (planning), the plans formulated (planning), the structural arrangements determined (organizing), and the people hired, and motivated (leading) there has to be some evaluation of whether things are going as planned. To ensure that work is going as it should, managers must monitor and evaluate performance. Actual performance must be compared with the previously set goals. If there are any significant deviations, it is management’s job to get work performance back on track. This process of monitoring, comparing, and correcting is what we mean by the controlling function.