(LAM) Functions of Management Lesson

Functions of Management

Four Functions

Traditional management theory recognizes four functions of management:

Planning - The foundation for all of the functions of management, planning requires that a manager understand where a company is at present as well as where it wants to be in the future. This requires the manager to examine circumstances within the company as well as events outside of the company that may affect the company's future performance. In creating plans and goals for a company, management must have a clear vision for the company and a solid understanding of the company's mission. In order to plan effectively, managers must first realistically examine the company's strength, weaknesses, opportunities, and threats.

Organizing - Once a plan is formed, management must organize all of the resources necessary to put the plan into effect. The resources may be financial, human, or capital. Not only will management pull these resources together, but they will allocate them where they are needed, when they are needed. Management will also coordinate departments to make sure everything gets done without duplication of effort.

Directing - By shaping and managing the behavior of employees, managers direct them to accomplish the goals and objectives of the company. It is to the company's benefit to have employees go above and beyond in their work, so a large part of directing is motivating employees. This is accomplished through good communication and creating positive relationships.

Controlling - Controlling requires establishing standards of performance based on a company's goals and objectives, then comparing actual performance to those standards. This allows management to see potential problems and find preventative or prescriptive measures.

Decision Making

Decision-making is a seven step process that every manager should be familiar with:

1. Identify the Problem - It is important that the manager identify the true problem, not just the symptom of the problem. If only the symptom is identified, all decisions will be made on incorrect assumptions.
2. Gather Information - In this step the manager will consider such things as what resources will be needed, who might assist with carrying out the implementation, what possible options are available, etc.
3. Generate Alternatives - At this point, the manager should be able to identify two or more alternative actions or possibilities the company might take to solve the problem and accomplish the goals.
4. Evaluate the Alternatives - There are many things that need to be considered in evaluating the alternatives. Such things as: What resources will each alternative require? Are the resources needed readily available to us? What is the likely outcome of choosing this alternative? Will choosing this alternative adversely affect other ongoing projects? Which departments and individuals need to be involved with each alternative? Managers will often use flow charts to help them evaluate the alternatives.
5. Reach a Decision - Once all of the alternatives have been examined, it is time to choose the best one. Sometimes it is immediately obvious what the choice should be. Other times, managers have to rely on experience and a "gut feeling" to choose between two close alternatives,
6. Implement - Having evaluated and chosen an alternative, the manager's task now is to put the resources in place and begin working on the chosen alternative. One essential part of implementation is to keep track of the challenges and successes that occur in the process.
7. Evaluate Results - In this step the manager is considering, how things went, in part using the information gathered in the implementation step, as well as evaluating the overall results. Did the alternative meet or exceed the company's goals and objectives. If the answer is yes, the manager will examine the alternative to see if improvements can be made to make the process more efficient. If the answer is no, then the manager will go back to step one and start again.

The steps in the decision making process are played out over and over in a managers day for decisions both major and minor. Big decisions usually require a more formal process, but small ones follow much the same pattern. All of these steps work right into the functions of management. View the graphic below to understand how it might all fit - the decision making process and the functions of management.

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