Chapter 3 Functions of Management PDF

Chapter III FUNCTIONSOFMANAGEMENT --------------------------------- TheFiveFunctionsofManagement areresponsibilitiesofAOM ----------------------------------------------------- 1. **Planning**.The first and foremost functions of management.Planning in advance what istobedone.Accordingto ME.Hur...

Chapter III FUNCTIONSOFMANAGEMENT --------------------------------- TheFiveFunctionsofManagement areresponsibilitiesofAOM ----------------------------------------------------- 1. **Planning**.The first and foremost functions of management.Planning in advance what istobedone.Accordingto ME.Hurle, **Planning**isdeciding inadvancewhat isto bedone.Itinvolvestheselectionofobjectives,policies,for―attainingenterprisegoals.‖ AccordingtoTerry, ―It istheselectingandrelatingoffactsandthe makingandusingof assumptions regarding the future in the visualization and the formation of proposed activitiesbelievednecessarytoachieveddesiredresults.―Itinvolvesdecidinginadvance what to do, when to do, where to do it, how to do it, and who is to do it and how the results are to be evaluated. 2. **Organizing**.The determination and grouping of activities, the assignment of activities to the specific departments and individuals, defining role and establishing relationships, the delegation of authority to carry out the responsibility.This isnecessary to produce effective methods and techniques when implementing changes to maximize organizational and individual productivity.Organization is the structure of relationshipsandresponsibilities, authoritiesandduties bymeansofwhichtheworkto be done and the personnel and means to do it are brought together and coordinated. 3. **Staffing.**Therecruitment,selection,training,placement,compensatingpromotion and demotion and finally the retirement of an employees. 4. **Directing.**It is concerned with getting work done through and with the people, they require continuous encouragement to work effectively.According to Terry, Directing means―moving to actionand supplying simulative powerto groupofpeople:. 5. **Controlling.**Guiding the execution of plans, or taking steps to insure that work is going according to plan.This is where we take corrective actions whenever necessary. Thisalso motivatesemployeesto becost conscious.Theprocessofcontrolinvolvesthre steps: a. Settingofstandardsofdesired performance b. Acomparisonofactualperformanceasagainststandards c. Takingcorrectiveactions 6. **Coordinating**.The process ofcoordination involves synchronizing individual actions with the goals of the enterprise.According to Koontz and O'Donnel, ―The best coordination occur when individuals see how their jobs contribute to the dominant goals ofthe enterprise.This impliesknowledge and understanding ofenterprise opbjectives.‖ 7. **Budgeting.**A budget is an estimate of income and expenditures for a definite period, expressed in terms of numerical units. Budgeting is required prior to carrying out office operations, so that proper system control may be established,to keep the expenditure within limits set by the various budgets. FormofBusinessOrganizations --------------------------- 1. **Sole proprietorship**.A business owned by one individual is a sole proprietorship. These businesses are also sometimes called single proprietorships. Sole proprietorships may be of any size, but many of them are small. Financial planners, caterers, and lawn care providers are examples of businesses that are often sole proprietorships. 2. **Partnership.**A partnership is a business that is not incorporated and has two ormore owners. Different types of partners may participate in a partnership. Some partners may provide funds for the business but not take part in running it. Other partners may actively lead and manage the business. All partners share in the profits of the business and are responsible for the debts of the business. 3. **Corporation**.Acorporation is a business set upunder the laws ofa particular state. A charter, which details the company's objectives, structure, and planned operations, must be secured from a state for a corporation. Owners have shares of ownership called stock. Owners are called stockholders or shareholders. Businesses seek tomake a profit. Typesof Organization -------------------- 1. **Line Organization**.It is also known as scalar organization, vertical organization, departmental organization, etc.The superior delegate authority to subordinate, who in turndelegates authorityto another subordinate and so on.The activities ofthe enterprise are grouped in departments, and a department is put under the charge of a department manager. 2. **Functional Organization**.Functions or divisions arrange traditional organization.In functional organization, authority is determined by the relationships between group functions and activities.Functional structures group similar or related occupational specialties or processes together under the familiar headings of finance, manufacturing, marketing, accountsreceivable, research, surgery, andphotofinishing. (limitedauthority) Characteristics: ---------------- 1. Eachworkisdivided into specificfunctions 2. Thereisaseparatesupervisorforeachfunction,whohasrighttogiveorders regarding that function, wherever that function is performed in the enterprise. **Advantages** 1. Increasedefficiency 2. Separateofintelligentjobsfromstrenuousjobs. 3. Specialization 4. Simplificationofwork 5. AssistsinDecision making 3. **Line and Staff organization**.This pattern is an improvement over line organization. The line system concentrates too much on control while the functional system decentralized too much.The staff does not possess line authority.They have the power to recommend but not to enforce.Thus, staffs members are thinkers, line officials are doers.Thus, line officers give formal orders to the next lower level, staff exerts its influence indirectly. Advantages ---------- 3. Specialization 4. Sounddecisions 5. Advancementopportunities 6. Basisforlineauthorityrelationships Disadvantages ------------- 1. Conflictbetweenlineandstaffauthority 2. Problemsoflineand staffauthority 3. Expensivesystem 4. **Matrix Organization.**Teams are formed and team members report to two or more managers.It is used to develop a new product to ensure the continuing success of a product to whichseveraldepartments directlycontribute and to solve a difficult problem. 5. **Departmentation.** It is a process of dividing the large monolithic (solid or huge) functional organization into smaller and flexible administrative units.It involves grouping of the primary activities of business in terms ofgeographical regions to be served by the concerned. CENTRALIZATIONANDDECENTRALIZATION ================================= Advantages ---------- 1. Standardization of systems and methods can be achieved, which facilitates the setting of performance standards, leading to effective supervision and control. 2. It isadministrativelyconvenient to havecontrolofafunctionorserviceat one place. 3. Stafftrainingissimplifiedbecausepersonnelareemployed,wheretheirparticular functions or services is concentrated. Disadvantages ------------- 1. Decisions are taken a long way from the operation center they effect, and such decision may not take into account special conditions. 2. Staff may noteasily be able to identify with the distantcentral managementcontrol, of their function and moral may be affected. 3. It results in a rigid structure, with little flexibility which is slow to accommodate change when necessary.