Key functions of management - Top Study Guide

There are 5 major functions of management:

Planning: managers need to set strategic, tactical and operational objectives that affect different parts of the organisation.

Organising: managers need to make sure the business has sufficient resources to achieve objectives, which requires good organisation.

Commanding: managers need to make sure all individuals know which duties they are to perform and to provide instructions if needed.

Coordinating: managers must bring together the various resources to achieve objectives. Since many different tasks happen at the same time, managers need to make sure that all these are done at the specific time and place they are supposed to be done.

Controlling: managers have power to control for quality of different processes and change them if necessary. They also have the power to increase or decrease the scale of operations depending on the circumstances in the market.

The functions of management are fundamental to understanding how organizations operate and succeed. Henri Fayol originally proposed that all managerial activities could be categorized into five functions: Planning, Organizing, Commanding, Coordinating, and Controlling. These functions provide a framework for managers to deploy and coordinate resources effectively, ensuring that organizational goals are met efficiently. This comprehensive exploration aims to delineate these key functions of management, supplemented by industry examples, to enrich the learning experience of IB Business & Management students.

Planning

Overview: Planning involves setting objectives for the future, determining the resources needed to achieve those objectives, and devising strategies to reach them. It encompasses strategic (long-term), tactical (medium-term), and operational (short-term) planning.

Example: Apple Inc. exemplifies strategic planning through its approach to product development and market expansion. Apple’s introduction of the iPhone was the result of meticulous planning that involved forecasting market trends, understanding consumer needs, and setting objectives that would eventually revolutionize the smartphone industry.

Organizing

Overview: Organizing entails allocating resources, assigning tasks, and establishing structures to implement plans. It includes determining what needs to be done, by whom, and at what time to achieve the planned objectives.

Example: Amazon demonstrates effective organization in managing its vast operations, from warehousing and logistics to its online platform. Amazon’s organizational structure allows it to handle millions of transactions and deliveries efficiently, ensuring resources are optimally utilized to meet customer demands.

Commanding

Overview: Commanding, or leading, requires managers to direct, motivate, and oversee their employees to achieve organizational goals. It involves clear communication of expectations, providing feedback, and ensuring team members understand their roles and responsibilities.

Example: Satya Nadella, CEO of Microsoft, has been lauded for his leadership style, which emphasizes empathy, collaboration, and the encouragement of innovation. Under Nadella’s command, Microsoft has seen a resurgence, marked by a renewed focus on cloud computing, mobile technologies, and fostering a growth mindset among employees.

Coordinating

Overview: Coordination involves the synchronization of efforts across different parts of the organization to ensure that activities are aligned and objectives are met efficiently. This function requires managers to oversee the interaction between various departments, projects, and processes.

Example: Toyota’s production system, known for its “Just-In-Time” (JIT) manufacturing approach, showcases effective coordination. By closely synchronizing supply chain activities with production schedules, Toyota minimizes inventory costs and enhances operational efficiency, requiring meticulous coordination among various parts of the organization.

Controlling

Overview: Controlling involves monitoring performance, comparing it with objectives, and making adjustments as necessary. This function ensures that organizational activities are proceeding according to plan and allows for corrective action when deviations occur.

Example: Google, through its use of data analytics and key performance indicators (KPIs), exemplifies the controlling function. Google’s ability to track the performance of its various services and products in real-time enables it to make data-driven decisions to improve user experience and operational effectiveness.

Conclusion

The five key functions of management—Planning, Organizing, Commanding, Coordinating, and Controlling—form the backbone of effective management practice. By understanding and applying these functions, managers can navigate the complexities of organizational leadership, ensuring that strategic objectives are met through efficient resource allocation, motivated teams, and continuous performance improvement. The examples of Apple, Amazon, Microsoft, Toyota, and Google illustrate how these management functions are applied in practice, driving success in diverse industries. For IB Business & Management students, mastering these concepts is essential for developing a holistic understanding of managerial roles and responsibilities in today’s dynamic business environment.

Frequently Asked Questions: Key Functions of Management

What are the key functions of management?

Management involves coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively. While various models exist, the most widely recognized key functions of management are typically described as four or five core activities:

Planning: Defining goals, establishing strategies to achieve goals, and developing plans to integrate and coordinate activities.
Organizing: Determining what tasks are to be done, who is to do them, how tasks are to be grouped, who reports to whom, and where decisions are to be made.
Leading: Motivating, mentoring, and otherwise directing people, as well as dealing with any behavioral issues. It involves inspiring individuals to work towards organizational goals.
Controlling: Monitoring performance, comparing it with goals, and correcting any significant deviations. This ensures things are going according to plan.

Some models also include **Staffing** or **Coordinating** as separate key functions.

Are there four or five key functions of management?

Both four and five are commonly cited, stemming from different management theories. The four functions (Planning, Organizing, Leading, Controlling) are widely accepted, particularly based on Henri Fayol's work (though his original list was slightly different and longer, including 'Commanding' and 'Coordinating'). When 'Staffing' or 'Coordinating' are added as distinct steps, the list becomes five. The key activities remain largely the same; it's just a matter of how they are grouped and named.

What are the key functions of Human Resource Management (HRM)?

Human Resource Management (HRM), or HR, focuses on managing the people within an organization. Its key functions include:

Staffing: Recruitment, selection, hiring, and onboarding of employees.
Training and Development: Improving employee skills, knowledge, and abilities.
Compensation and Benefits: Designing and managing pay, incentives, and employee benefits.
Performance Management: Evaluating employee performance and providing feedback.
Employee Relations: Managing relationships between management and employees, handling grievances, and fostering a positive work environment.
Health and Safety: Ensuring a safe and healthy workplace.

HRM aligns these functions with the overall business strategy.

Are functions like Financing part of the core functions of management?

While managing finances is absolutely critical to any business, "Financing" itself is typically considered a specific **functional area** or activity within a business (part of the Finance department), rather than one of the universal core *management* functions that apply to *all* managers across *all* departments. The core management functions (Planning, Organizing, Leading, Controlling) describe *what managers do* regardless of the specific business area they are managing (e.g., a Marketing Manager, Finance Manager, or Operations Manager all perform these four basic functions).