Management Functions – Important 4 Functions of Management

Functions of Management

According to the functions approach, managers perform certain activities or functions as they efficiently and effectively coordinate the work of others. What are these functions?

Henry Fayol, a French business man, first proposed in the early part of the twentieth century that all managers perform five functions: planning, organizing, commanding, coordinating, and controlling. Today, these functions have been condensed to four:

  1. Planning
  2. Organizing
  3. Leading
  4. Controlling


If you have no particular destination in mind, then any will do. However, if you have someplace in particular you want to go, you’ve got to plan the best way to get there. Because, organizations exist to achieve some particular purpose, someone must define that purpose and the means for its achievement. Managers are that someone. As managers engage in planning, they set goals, establish strategies for achieving those goals, and develop plans to integrate and coordinate activities.


Managers are also responsible for arranging and structuring work to accomplish the organizations 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 has people, and a manager’s job is to work with and through people to accomplish goals. This is the leading function. When managers motivate subordinates, help resolve work group conflicts, influence individuals or teams as they work, select the most effective communication channel, or deal in any way with employee behavior issues, they’re leading.


The final management function is controlling. After goals and plans are set (planning), tasks and structural arrangements put in place (organizing), and people hired, trained, and motivated (leading), there has to be some evaluation of whether things are going as planned. To ensure that goals are being met and that work is being done as it is should be, managers must monitor and evaluate performance. Actual performance must be compared with the set goals. If those goals aren’t being achieved, it’s the manager’s job to get work back on track. This process of monitoring, comparing, and correcting is the controlling function.

Just how well does the functions approach describe what managers do? Do managers always plan, organize, lead, and then control? In reality, what a manager doesmay not always happen in this sequence. Regardless of the order in which these functions are performed, however, the fact is that managers do plan, organize, lead, and control as they manage.


Planning included matters is

  • Managers as Decision Makers
  • Foundation of Planning
  • Strategic Management
  • Planning Tools and Techniques

Decisions Managers May Make in Planning:

What are the organizations long term objectives?

What strategies will best achieve those objectives?

What should the organization’s short term objectives be?

How difficult should individual goals be?

Managers as Decision Makers: The Decision Making Process

Foundations of Planning:

Planning involves defining the organization goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activities. It’s concerned with both ends what and means how.

Strategic Management:

Strategic management is what managers do to develop the organization’s strategies. It’s an important task involving all the basic management functions- planning, organizing, leading, and controlling. What are organizations’ strategies? They are the plans for how the organization will do whatever it’s in business to do, how it will complete successfully, and how it will attract and satisfy its customers in order to achieve its goals.


Organizing included matters is –

  • Basic Organizational Design
  • Adaptive Organizational Design
  • Managing Human Resources
  • Managing Teams

Decisions Managers May Make in Organizing:

How many employees should I have report directly to me?

How much centralization should there be in the organization?

How should jobs be designed?

When should the organization implement a different structure?

Organizational Design:

We defined organizing as arranging and structuring work to accomplish organizational goals. It’s an important process during which managers design an organization’s structure. Organizational structure means the formal arrangement of jobs within an organization. Organizational design is creating or changing an organizations structure.

When managers create or change the structure, they’re engaged in organizational design, a process that involves decisions about six key elements:

  • Work Specialization
  • Departmentalization
  • Chain of Command
  • Span of Control
  • Centralization
  • Decentralization
  • Formalization

Traditional Organizational Designs:

  1. Simple Structure
  2. Functional Structure
  3. Divisional Structure

Simple Structure:

Most company’s starts as entrepreneurial ventures using simple structure, which is an organizational design with low departmentalization, wide spans of control, authority centralized in a single person, and little formalization.

Strengths: Flexible, fast, inexpensive to maintain, clear accountability.

Weakness: Reliance on one person is risky, not appropriate as organization.

Functional Structure:

Functional structure is an organizational design that groups similar or related occupational specialties together.

Strengths: Cost saving advantages from specialization, employees are grouped with others who have similar tasks.

Weakness: Functional specialists become insulated and have little understanding of what other units are doing.

Divisional Structure:

The divisional structure is an organizational structure that made up of separate business units or divisions. This structure, each division has limited autonomy, with a division manager who has authority over his unit and is responsible for performance. 

Strengths: Focus on results – division managers are responsible for what happens to their product and services.

Weakness: Duplication of activities and resources increases costs and reduces efficiency.


Leading included matters is –

  • Understanding Individual Behavior
  • Managers and Communication
  • Motivating Employees
  • Managers and Leaders

Decisions Managers May Make in Leading:

How do I handle employees who appear to be unmotivated?

What is the most effective leadership style in a given situation?

How will a specific change affect worker productivity?

When is the right time to stimulate conflict?


Controlling included matters is –

  • About Controlling
  • Managing Operations

Decisions Managers May Make in Organizing:

What activities in the organization need to be controlled?

How should those activities be controlled?

When is a performance deviation significant?

What type of management information system should the organization have?