Topic 1.

3
THE FOUR MANAGEMENT FUNCTIONS:
Planning, Organizing, Leading, Controlling
OBJECTIVE:
To understand the four main functions of all managers

C.
C.The
The44Management
Management
functions
functions
Planning
Organizing
Controlling
Defining
goals,
establishi
ng
strategy,
and
developin
g
plans to
coordinat
e
activities

Determining
what needs
to be done,
how it will
be done,
and who is
to do it.
Who reports
to whom,
and where
decisions
are to be
made

Directing
and
motivating
all involved
parties,
selecting
most
efficient
communica
tion
channel
and
resolving
conflicts

Leading
Monitorin
g
activities
and
performan
ce, ensure
they are
accomplis
hed
as
planned,
taking
corrective
actions

Leading
Leading to
to
Achieving
the
organizatio
ns
stated
purpose

1. Planning
1. Planning
5 Stage Planning Process
1. Objectives
What do I want to achieve? When?
2. Policies
Does plan contradict company policies or company
philosophy and values?
3. Procedures
how to put the plan into action, concrete steps
4. Rules
Does my plan contradict our legal obligations?
5. Budgets
How much will it cost? Do we have the capital? Will it create
cash-flow problems?

1. Planning
Lets talk a little more about fixing OBJECTIVES
They should be SMART Objectives

Specific (concrete, detailed, well defined),

Measurable (numbers, quantity, comparison),
Achievable (considering resources),
Realistic (practicable, feasible, actionable) and
Time-Bound (a defined time line).

2. Organizing
2. Organization
Organizational Logic
Modern work is complicated
Requires specialization- often called departmentalization
Every organization needs to have an Organizational Chart

NOWADAYS ORGANIZATIONS ARE FLATTER

1980s

1990s

Now

2. Organizing
MODEL 1- Functional Structure- People are grouped together in
departments by common activities, skills and resource use.

Human
Resource
s

Manufacturing

Economies of scale,

Efficient use of resources

In depth skill specialization

Poor communication across

functions.

Slow response to changes

Finance

When to use:

Stable,
certain
environment

Small to medium size

Goals
of
efficiency,
technical quality

2. Organizing

MODEL 2- Divisional Structure People are grouped together based

on a common product, customer, or geographical region. Functions
are split amongst the divisions.

Division 1
HR

Mftg

Fin

Division 2
HR

Mftg

Fin

Division n
HR

Mftg

Fin

When to use:

Unstable,
uncertain
environment

Medium to Large size

Goals
of
product/region/client
specialization, flexibility

Flexibility and quick to

adapt to local changes
More in touch with customers,
focusing
on
customers
needs.
Excellent
coordination
across functions
Duplication of resources
Competition for resources
among divisions
Poor coordination across
divisions.

2. Organizing

MODEL 3- Hybrid Structure Contains elements of both functional

and divisional structure. With divisional form, maintains centralized
functional departments
Hum.
Resources

Technology

Resources &
Strategy

Div
1
Mftg

Div
2
Mftg

Div
3
Mftg

Fin

Fin

Fin

Manuf.

Manuf.

Manuf.

When to use:
Unstable

environment,
especially
in
customer/competitor sectors

Large
Goals

size

of
flexibility,
plus
efficiency in some functions

Alignment
between
corporate and divisional
goals
Helps attain adaptability
in some departments and
efficiency in others
Conflict between division
and corporate
departments
Administrative costs

2. Organizing
MODEL 4- Matrix Structure Organized like division structure, but
with horizontal teams cutting across divisions

When to use:

Very
environment

uncertain

Medium to large size

Dual goals of product and

geographic
specialization

Takes advantage of both

functional and divisional
structures

Adaptation and innovation

High
bosses

Power struggles, confusion

& stress

conflict...several

2. Organizing
MODEL 4- Matrix Structure

President

Corporate Finance

Corporate Strategy

Regional Divisions, each with own Director

Business
Areas,
each with
product
coordinator

Rest of World
Division

Asia Pacific
Division

Latin Am
Division

Europe
Division

PRODUCT 1

Team 1

Team 1

Team 1

Team 1

PRODUCT 2

Team 2

Team 2

Team 2

Team 2

PRODUCT 3

Team 3

Team 3

Team 3

Team 3

3. leading
3. Leadership
Used in all social systems

Requires a lot of thinking

about Motivation

TWO TYPES:

Formal (based on job

position)

Natural (based on
personal leadership
qualities)

Styles
1. Autocratic
2. Democratic
3. Laissez-Faire
4. Consensual
1

Autocratic
Leadership Style
Considered the classical
approach.
The manager retains as much power and decision-making authority
as possible.
The manager does not consult employees.
Employees are expected to obey orders without receiving any
explanations.
The motivation is produced by creating a structured set of rewards
and punishments.
+
-Effective
-Time to decide is limited
-Can help coordination
-Helps to have high productivity

-Employees become tense or

fearful
- Employees may dislike being
ignored
-Employees depend on manager
to make all decisions
Example: Standardized
Production

Democratic Leadership
Style
Employees are part of the decision making.
The democratic manager keeps employees informed
Requires the leader to be a coach who makes final decision, but first
gathers information from staff members.
+
-Employees share in decisionmaking and problem-solving duties.
-Employees develop a high sense of
personal growth and job
satisfaction.
-May help solve complex problems.
Helps build teams.

-Needs time to get everyones

opinion.
-Its easier and more costeffective for the manager to
make the decision.
-Some managers feel
threatened by this type of
leadership.
Example: Medical Team /
designers

Laissez-Faire Leadership
The laissez-faire leadership styleStyle
is also known as the hands-off
style.
It is when the manager provides little or no direction and gives
employees as much freedom as possible. All authority or power is
given to the employees and they must determine goals, make
decisions, and resolve problems on their own.
+
-Employees have pride in their
-Some employees feel insecure at
work.
the unavailability of a manager.
-Employees feel trusted and
- Manager cant give regular
respected.
feedback to let employees know
how well they are doing.
-Save managers time and energy
Example: Investigative Journalist

Bureaucratic Leadership
The manager manages by the book.
Style
Everything must be done according to procedure or policy.
If it isnt covered by the book, the manager refers to the next level
above.
This manager is really more a police officer than a leader. He or she
enforces the rules.
+
-Useful when employees need to
understand certain standards or
procedures / working with
dangerous or delicate equipment
-Useful when employees are using
company resources.

-People lose ability to think for

themselves
-Employees lose their interest in
their jobs.
-Employees do only what is
expected of them and no more.

Example: Nuclear Power Station

4. controlling
4. Control
Logic

Steps
1. Planning

Explain and limit

difference between
objectives ands and
results

2. Information gathering
3. Evaluation
4. Corrective Measures

Negative Aspects
Cost

Negative Implications (people free lack of trust)

Incomplete Information

Management- time dedicated to each

function
Generally, higher level managers plan and organize
more, while lower level managers lead more. This is
because they are involved on a daily basis with workers.
Activity by Organizational Level

Managementtime
dedicated
each
Planning
is more important
for top
management, to
because
they

decidefunction
the organization's overall direction, which needs extensive
planning.
Organizing is more important for top and middle managers than
first-line managers because they have greater responsibility for
allocating resources.
Leading is more important for first-line supervisors, because they
produce goods/ services, and are constantly in contact with
workers, customers, suppliers etc.
Controlling is similar at all levels. This shows a common
emphasis on monitoring activities and taking corrective action.

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