functions of management 1 oct 2010

8/8/2019 Functions of Management 1 Oct 2010

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Management Functions and

Principles

V. C. Mathur

Principal Scientist and Professor

Division of Agricultural EconomicsIndian Agricultural Research Institute

New Delhi

Ist Trimester 2010-11


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Functions Of ManagementFunctions Of Management

PlanningPlanning Organizing (including staffing)Organizing (including staffing)

DirectingDirecting

ControllingControlling


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Four Functions of Management

Planning

Setting organizational goals

Developing strategies to reach those goals

Determining resources needed

Setting standards A management function that involves

anticipating trends and determining the best

strategies and tactics to achieve organizationalobjectives


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Planning contd. A major organizational objective is to

satisfy customers

Planners monitor the environment, findbusiness opportunities, and look out for

challenges.

Planning is a key function as other

functions depend on having a good plan


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Planning: Involves setting organizational

vision, goals and objectives

Vision larger explanation of why theorganization exists and where it is heading.

The vision gives an organization a sense ofpurpose and a set of values

It is the root of all objectives.

Purpose the primary role defined by society inehich the organization operates. Ex. Purpose of a university is to impart education

Purpose of a hospital is to provide health care=> Purpose is the broad aimthat applies not only to the

given organisation but to all similar organisations.


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Mission

Vision and purpose are reflected through aMISSION STATEMENT

Mission reflects the unique aim of an organisationthat sets it apart from all other organisations.

It outlines the fundamental purpose of theorganization

Reflects the organisations specialisation in somearea service, product or client As a university, IARIs purpose is to impart education; its

mission is to become the leading institution in the regionforagricultural education

Decides the scope of the business.


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IARIs Mission Statement

.. to explore new frontiers of science and

knowledge and develop human resources

to provide leadership to the country intechnology development and policy

guidance resulting in a vibrant, responsive

and resilient agriculture which must be

effectively productive, eco-friendly,sustainable, economically profitable and

socially equitable


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Planning: Goals and Objectives Goals broad long-term accomplishments

that an organization wishes to attain

A team process

Based on the mission of the organization Objectives specific, short-term

statements detailing how to achieve the

goals


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Characteristics of Objectives Objectives may be multiple in number

Specified capacity utilisation

Specified cost and return on capitalspecified product

quality

Extension and market development Serving remote and unreached areas

Specified market share

Objectives may be tangible or intangible

Tangible quantifiable market share, productivity,capacity utilisation, return on capita

Intangible not readily quantifible managers

performance, workers morale and motivation levels,

public responsibility


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Characteristics of Objectives Objectives can be prioritized

At any given point of time, the accomplishment of one

objective may be relatively more important than of others

Prioritization is important for rational allocation of the

organisations resources Objectives are generally arranged in an hierarchy

Corporate (total enterprise) objectives at the top

Divisional or departmental objectives

Section objectives

Individual objectives


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Characteristics of Objectives Objectives sometimes clash or are conflicting

Divisional objectives may clash Production: Reduce cost

Marketing: Enhance quality / features

Requires careful balancing of the objectives of each

department

Results in suboptimisation (in contrast to maximisation)

of objectives or goals

Sound objectives must be:

Clear and acceptable Precise and measurable

Should always remain valid (implies constant monitoring

and adaptation of objectives to changed conditions)


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Planning contd. Planning addresses the following questions:

1. What is the situation now?

The state of the economy and other environments

Opportunities for meeting peoples needs

Most profitable products and customers

Why people buy (or do not buy) our products Major competitors as threats to the organization

2. Where do we want to go?

Growth

Profit goals

Social objectives Personal and development objectives

3. How can we get there from here?


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Planning contd.Planning can be: Tactical (short-range) planning

developing detailed short-term strategies

about what is to be done

Deciding annual budgets

Deciding other activities and details necessary

to meet strategic objectives

Includes operational planning setting work

standards and schedules necessary to

implement tactical objectives


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Planning contd.Planning can be: Contingency planning preparing

alternative courses of action that may be

used if primary plans do not achieve

objectives


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Strategic versus Tactical PlanningStrategic

Decides major goals and

policies of resources

allocation to achieve those

goals

Done at higher levels ofmanagement

It is long-term

Based on long-term

forecasts of technology,

political environment, etc.

and hence is more uncertain.

Less detailed as it is not

concerned with day-to-day

operations of the

organisation

Tactical Decides the detailed use of

resources for achieving

each goal

Done at lower levels of

management It is short-term

Generally based on

organisations past

performance and hence is

less uncertain

More detailes as it is

concerned with day-to-day

operations


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Importance of planning Eliminates randomness and ad-hocism in decisions

and choices. Thereby:

Minimises risk and uncertainty

As rational, fact based procedures form thebasis of decisions

Helps managers cope with changing environment

Leads to success

Organisations that plan outperform non-planners

and also outperform their own past performance

Planning allows managers to be proactive and notmerely reactors, leading to higher success.

Focuses attention on organisational goals

Facilitates control


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Strategy In competitive situations, logical plans alone

may not suffice

Plans must consider

Environmental opportunities and threats

Organisational strengths and weaknesses

A corporate strategy is a plan which takes

these factors into account and attempts tomatch the firm and the environment


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Organizing

Allocating resources, assigning tasks, and

establishing procedures for accomplishing

goals

Preparing a structure (org chart) showing

lines of authority and responsibility

Recruiting, selecting, training, and

developing employees. Placing employees where they will be most

effective.


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Organizing contd.

After goals have been set and workable

plans developed, people and other

resources needed for implementing the

plans have to be organized.

Basically involves

the allocation of resources (e.g.funds for

different departments)

assigning tasks

establishing procedures for achieving

organizational objectives.


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Organizing contd.

Involves

Job design

Departmentalization Authority relationships

Span of control

Line and staff roles

Include the development and design

of organizational structures


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Organizing contd.

Management levels in corporate

hierarchy include

Top management: highest level ofmanagement

Involved in defining mission, setting goals

and objectives, structuring, controlling and

rewarding to ensure people carry outleaders vision

Also generating resources (funds),

budgeting and other financial matters


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Organizing contd.

Middle management: general

managers, divisional managers,

branch and plant managers

Responsible for tactical planning and

controlling

Supervisory (Front-line) managers:

those directly responsible forsupervising workers and evaluating

daily performance


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Organizing contd.

Organizing also includes staffing

Involves

recruitment, selection and training of

personnel

Assigning tasks to people who can

perform them best


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Leading

Processes used to get people to

work together to advance the

interests of the organization

Motivating people


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Leading involves

Guiding and motivating employees

to work effectively to accomplish

organizational goals and objectives.

Giving assignments.

Explaining routines.

Clarifying policies.

Providing feedback on performance.


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Functions of Leaders

Setting and achieving organisationalgoals

Goal setter

Planner

Executive

Planning operations

Symbolic figurehead


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Leadership styles

Autocratic

Participative (democratic)

Laissez-faire (free-rein)


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Controlling

Measuring performance relative to objectivesand standards and taking corrective actionwhen necessary

Steps

Setting clear performance standards Monitoring and recording performance

Comparing results against plans and standards

Communicating results and deviations to

employees involved Taking corrective actions when required


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Controlling Establishing standards against which results can be

measured Therefore, organisations must identify key result areas

Productivity

Profitability

Market position

Personnel development

Worker attitudes

Public responsibility

Standards must be defined as far as possible in

quantitative terms Monitoring performance relative to standards

Taking corrective action.


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Types of standards for measuring results

Physical standards labour hours per unit of output, units of

production per machine

Cost standards

Direct and indirec costs per unit produced,material cost per unit, selling cost per unit, etc.

Revenue standards

Average sale per customer, sales per capita,

regional sales, etc. Capital standards

Rate of return on invested capital, ratio of

current assets to current liabilities, etc.


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Types of standards

Intangible standards

Competence of managers and employees,

success of public relations programme, etc.

Working practice standards Handling tools, placement of materials, etc.

functions of management 1 oct 2010

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