MANAGEMENT FUNCTIONS

INTRODUCTION
Management is perhaps the most important area of human activity today. Individuals manage their own
unique daily affairs to survive. Leaders of groups also manage group affairs so that the desired group
objectives or aims are efficiently accomplished. Without management, it is not easy to conceive any
meaningful way of survival as an individual or more so as a group with common objectives.

Management knowledge is important if managers have to achieve any set of objectives. The analysis of this
knowledge can be facilitated by organizing it into classes on the basis of what managers do. These are
commonly referred to as the managerial functions which include planning, organizing, staffing, directing and
controlling. These areas of management knowledge are broad and therefore cannot be discussed at this
juncture. However, it is important to note that management concepts, theories, principles and techniques
which are the crucial tenets of management practice are organized around the above said management
functions. For this matter, it is important to understand these terms before discussing the managerial
functions. Principles are fundamental truths or what are believed to be general truths at a given time
explaining relationships between two or more variables. For example, the Parkinsons Law which states that
work tends to expand to fill the time available. Here the relationship is between the variables work and time.

A theory is a systematic group of inter-related principles. The purpose of a theory is to tie together significant
knowledge to give it meaning. For example, the figures you find on the blackboard after a mathematics class
may be meaningless unless you know the theory and principles behind the individual figures or group of
figures. Concepts are the mental images of a thing formed by generalization from particulars. They are the
building blocks of theory and principles.

The importance of the above terms is in the managerial efficiency and effectiveness. If principles, theories,
concepts and techniques can be developed, proved and used, managers can eliminate trial and error which
is largely wasteful. Therefore, the value of understanding management in a scheme of principles, theories,
concepts and techniques is that it lets one see and understand what would otherwise remain hidden.

We have up to now only underscored what is involved in management. But then, what is management?
Management can be defined as “A set of activities directed at the efficient and effective utilization of resources
in pursuit of one or more objectives. The resources are usually people, machines, materials, time and
managerial know-how. On the other hand management can be seen as a philosophy. That is a system of
thought based on some logical relationships between concepts and principles that explain certain
phenomenon and supplies a basis for rational solution of related problems. The above referred system of
thought has been developed by various schools of thought such as scientific management, administrative
management, behavioural science, quantitative management, systems theory and contemporary theory
which are discussed elsewhere.
While the managerial functions have been identified to be those of planning, organizing, staffing, directing
and controlling, it is however, necessary to consider certain useful perspectives for describing the manager’s
job. These are the managerial roles and skills. Managerial roles begin with authority which is bestowed on
the manager by the organization. This authority which is the positional power to exercise discretion in making
decisions that affect others enables the manager to get the activities within his jurisdiction done. The roles
a manager performs include interpersonal, informational and decision roles.

There are three interpersonal roles. The first is that of a figurehead. When serving as a figurehead the
manager appears as the representative of the organization. The second role is that of a leader. Here, the
manager influences behaviour of others, for example, he directs and motivates the workers. The third role
is that of liaison. In this case the manager relates the organization to the outsiders. For example, portraying
the good image of the organization.

There are also three informational roles, the first role is that of monitoring the environment for the purpose of
gathering vital information for the organization. The second role is that of disseminator of relevant information
for use within the organization and the third role is that of spokesperson. For example when there is shortage
of water in Nairobi city, the Nairobi city commission’s chairman or town clerk normally makes press
statements explaining the problem.

The final role of the manager is the decisional role. While playing this role the manager identifies opportunities
open to the organization, selects them and allocates resources necessary to exploit the selected
opportunities. In doing so the manager also handles any threats or disturbances that arise while negotiating
with the outsiders for possible support.

The managerial skills consist of technical, interpersonal, conceptual and diagnostic skills. The manager
needs the technical skills to perform the specialized task of the organization while he requires the
interpersonal skills to relate well with the other personnel in the organization. The conceptual and diagnostic
skills are essential to the manager for relating the organization to its external environment on which it
depends. That is identifying and analyzing possible opportunities and threats that face the organization.

Two important concepts emerge from the analysis of the above roles and skills of a manager. The first is,
that management is pervasive. The roles are played at all levels of the organization although with varying
intensities, for example, the decision roles belong more to the higher level management than the lower level
management. Also the interpersonal and technical skills are more required by the lower level management
than the higher level management while the conceptual and diagnostic skills are required more by the higher
level than lower level management. The second is that management should be approached from a systems
point of view. A system is a unitary whole composed of two or more interdependent parts, components or
sub-systems and delineated by identifiable boundaries from its suprasystem. Managers should see the
organization as depending on the supraenvironment for its inputs which it converts through the performance
of managerial functions and produces outputs which are sent back into the supraenvironment.

MANAGEMENT PROCESS

Management can be conceived as a process consisting of planning, organizing, staffing, directing and
controlling. These functions, as noted earlier, comprise the job of a manager whether the manager is working
for a business concern, political or social organization. Furthermore, these functions are performed in all
types of economic systems (capitalistic, socialistic or communistic economies).

While the functions are universally applicable, they must be slanted in their application to suit geographic,
socio-cultural and political environments of the respective regions. Thus, to function effectively the manager
must not only understand the process of the job but also the environment forces that facilitate or constrain
his/her operations. Each of the functions is considered below:

Planning

Planning is the process of developing plans. A plan is a blueprint or framework, used to achieve
organizational goals. In essence, planning is the determination of which path among many an organization
intends to follow in order to achieve its goals efficiently and effectively. The process is reflected in terms of
what to do, how to do it, when to do it and who is to do it.

The importance of planning is to offset uncertainty and change that result from the dynamic environment, to
focus attention on objectives, to gain economic rationality and to facilitate control.

Kinds of plans

Every organization has many plans and in a variety of areas. Three types of plans can be identified. These
are strategic, tactical and operational plans.

Strategic plans are those plans developed by top level management to guide the general direction of the
organization. This kind of plans include the corporate mission, the objectives of the organization and the kind
of business the firm would like to operate in. They are usually long-range.

Tactical plans are developed by middle-level management and are intended to indicate how the strategic
plans will be implemented. They focus on specific resources and time limits and are medium-range in nature.

Operational plans are lower-level plans focusing on operations and have the narrowest time frame, usually
one year. Examples of these plans are standing and single use plans. Standing plans handle recurring or
relatively routine situations and include policies, procedures and regulations, while single-use plans handle
events that occur only once and include programs and projects.

Planning viewed as a process comprises the following steps:

i Being aware of opportunity

This is a forerunner of planning which may not really be seen as a step but as a sort of self-evaluation
as to where the organization stands presently, its strength and weakness and a vision of the future.

(ii) Establishment of objectives

The concern here is setting the organizational targets or future states-of-affairs. These are usually
stated qualitatively or quantitatively and organized in a hierarchy. Examples of targets are profit in
Kenya shillings or percentage of sales, sales volumes, level of efficiency, speed and/or costs in
Kenya shillings. When establishing these objectives, managers rely on planning tools such as those
found in operations research namely, break-even analysis, forecasting techniques (time series and
Delphic).

iii Establishment of planning assumptions

This involves the delineation of environments in which planning takes place such as controllable
premises which are the decisions made by management and entail policies, programs, etc; semi-
controllable premises that include organization’s market share, levels of labour turnover, etc; and
non-controllable premises which are the external environments of the organization including
political, technical and socio-cultural factors.

(i) Determination of alternative courses of action

This planning activity entails identifying and listing the various ways and means of accomplishing
the organizations objectives.

(ii) Evaluating the alternative courses

The operation research techniques are used here to evaluate alternatives in light of the
objectives and premises. Mathematical models and statistical techniques like decision tree are
useful in this case.

(iii) Selection of courses of actions

This is the stage at which the plan is adopted by actual decision-making. One or more
alternatives may be chosen depending on the management experience.

(iv) Formulation of derivative plans

The master plan is used to derive plans for various managerial levels.

Contingency planning

This is part of the planning process in which managers identify alternative courses of action that the
organization might follow if various anticipated conditions arise. This is in appreciation that, due to the
dynamic nature of the external environment, changes are bound to occur. In this case managers develop an
initial plan that includes the specification of possible or contingent events. The task of the manager then is
to monitor these contingent events and adopt the plan accordingly.

Organizing

Organizing is concerned with activity – authority relationship. That is, it involves the grouping of related
activities necessary to attain the planned organizational objectives; the assignment of each group to a
manager with commensurate authority necessary to supervise it and the provision of co-ordination
horizontally and vertically that ties the groups together. Organizing is linked to the planning function by the
process of establishing organizational objectives and the formulation of derivative plans.

In carrying out the organizing function there are key components and concepts that must be kept in mind.
These are designing of jobs, delegation of authority and responsibility, span of management,
departmentalization and decentralization.

Job design is the determination of what procedures and operations are to be performed by an employee in
each position. The basis of all employee in each position. The basis of all job design activities is job
specialization. The proponent of Scientific Management, Fredrick W. Taylor advocated specialization as a
way to increase productivity. Specialization has its advantages which include enabling each employee to
become an expert and enabling managers to exercise greater control over workers. However, over
specialization, for that reason, there are alternatives to specialization. These are job rotation, job
enlargement and job enrichment.

Job rotation involves systematically moving employees from one job to the other. This decreases boredom
and helps to train the employee in a variety of skills. Job enlargement involves adding more activities to the
jobs. Job enrichment involves giving workers more activities to perform and more discretion as to how to
perform them. This creates greater challenge to the employee and may also motivate them.

Delegation is the process through which the manager assigns part of his tasks to the subordinates. This is
done by first assigning responsibility to the subordinate to do something. Second, the manager must also
grant the authority necessary to carry out the task. Third, the manager creates accountability in the part of
the subordinate. Delegation helps in fostering vertical co-ordination within the organization. The principle of
unity of command and scalar principle as stated by Henri Fayol are basic to delegation.

Span of management

This is the number of subordinates a superior can supervise effectively. This number is influenced by factors
such as qualification and experience of subordinates, competence and capacity of the supervisor, the nature
of the job and communication pattern used. There are two basic types of spans. A manager who has a large
number of subordinates has a wide span of management whereas a manager with only a small number of
subordinates has a wide span of management whereas a manager with only a small number subordinates
has a narrow span of management. A wide span of management means that there are therefore relatively
few managerial levels, therefore the organization is flat. A narrow span of management leads to a tall
organization. Communication between upper-level and lower-level management tend to increase in flat
organization.

Departmentalization

This is the process of grouping related tasks and the personnel performing the tasks into departments so that
it is easier to coordinate and integrate activities. Departmentalization may be done on the basis of numbers,
product, function or industrial process. A classic example of departmentalization by numbers is given in the
bible, the book of Exodus 18: 17 – 26. When Moses had the arduous task of organizing the exodus of
Israelites, his father-in-law advised him to divide the people in groups of thousands, and hundreds, and tens
and provide rulers upon them – rulers who had the authority and power to judge the people. Moses did that
and he was able to lead the Israelites to their place in peace. Departmentalization by numbers is possible if
the activities to be performed and the personnel to perform the activities are homogeneous. For example
soldiers and trench diggers. In product departmentalization, activities associated with individual product or
closely related product groups are put together. For example a firm producing beers may have T-beer
department, W-beer department etc. (where T and W are two different beer brands or products).
Departmentalization by functions may also be done. This is done by putting together activities or employees
who are involved in the same or very similar functions. For example marketing activities or people are put
into marketing department. The same applies to finance and so forth. The advantage here lies in the use of
expertise and resources. However, the disadvantage is that decision making may be slower than in other
cases; and the employees may also lose sight of the total organization. Other forms of departmentalization
are by geographic location and customer needs.

Decentralization

This is the extent to which decision making authority is given to the lower echelons in the organization.
Centralization and decentralization are tendencies like hot or cold. Absolute decentralization makes
managers lose their position as they will have no decision left to make whereas absolute centralization makes
an organization lose its structure as it means no subordinate managers.

Decentralization is pursued usually when the environment is complex and uncertain; and in other cases when
the organizations want managers who are closer to problems or customers to make decisions. However, the
main factors that influence centralization are cost of the decisions, desired uniformity of policy, subordinates
desire for independence, economic size of enterprise and history of the organization.

Any program for decentralizing authority must reflect the principles of delegation as this will help tie together
the various organizations levels.

MANAGING
DIRECTOR

DEPUTY MANAGING
DIRECTOR

FINANCIAL MARKETING PERSONNEL PRODUCTION

CONTROLLER MANAGER MANAGER MANAGER

CHIEF X Y Z
There is need to consider how the organizing concepts discussed above are integrated in one overall
organization design. An organization design may be defined as the overall configuration of positions and
inter-relationships among positions within an organizations. This configuration is usually represented on an
organizational chart. The chart depicts departmentalization (by any of the aforementioned basis) and lastly
the chart shows positional relationships between the superiors and subordinates.

This phenomenon illustrates the contributions of the administrative management school of thought and in
particular, Max Weber’s bureaucratic model which advocated strict division of labour, use of a consistent set
of rules a clear chain of command and impersonal relationships.

Staffing
Staffing is the process of procuring and managing the human resources an organization needs to accomplish
its goals. This process involves recruiting and selecting the needed personnel, development and training of
personnel and appraisal of personnel. The forerunner of the staffing process is the human resource planning
which consists of job analysis, forecasting human resource supply and demand, and matching the supply
and demand.

Recruitment and selection

People come and go but an organization is expected to continue for ever. The organization needs to hire
more people either because it has grown or just to replace current employees who leave due to retirement,
termination of contract or death.

In order to do a good job in staffing, a manager needs to keep an up-to-date inventory of personnel. One
way is to classify personnel into categories showing those with prospects for promotion, the qualified but not
promotable and those to be replaced about to retire. When recruiting, an organization attracts a pool of
qualified applicants from within and outside the organization are institutions (like the universities, colleges),
other organizations and private recruitment agencies.

Once the applicants have been scrutinized, the organization must select the right applicants. Selection can
be facilitated by a number of techniques. These include assessment of completed application blanks; test
results and interview results. Application blanks help to obtain details about the prospective employee’s
background, education, experience and other personal attributes. On the basis of these, the applicant may
be selected or dropped. The tests may include aptitude, intelligence, ability, skills and knowledge tests.
Performance in this test determines the suitability of the applicant. The most common technique of selection
is the interview. This involves talking to the applicant. Although a poor predictor of job performance, the
interview helps the interviewer to gain the hidden insights of the applicant as regards personality,
interpersonal relationships and general reactions to some stimuli.
Development and training of personnel

The organization does not develop anybody. Instead, an employee develops himself/herself. Training
involves the provision of skills necessary to perform the employee’s job. This is usually applicable to the
operative employees.
There are several approaches to personnel development. Some of these are planned progression, job
rotation, formal program offered by the relevant institution, conferences and membership to different
committees. Planned progression is mainly a path of promotion. On-the-job training, job rotation and
institutional training are meant to equip the employee with the necessary operative skills. Conferences and
membership to committees take the forms of sensitivity training or T-group, role play, case discussion,
business simulation and behaviour modeling training. These are suitable for higher level management
trainees.

Performance appraisal

Performance appraisal is important for three reasons. First, an organization needs to verify the validity of
selection methods. Second, an organization needs a basis for providing rewards fairly. Third, it helps
employees to improve on productivity.

Performance appraisal is a challenging process because of measurement problems and the fact that most
supervisors are afraid of telling their subordinates that their work is below expectation. However, there is a
variety of methods of appraising performance. These include performance rating where values are assigned
to adjectives such as creativity, initiative, dependability, knowledge and so forth. The rating may be present
on a continuum scale as shown below. To what extent does this person demonstrate initiative?

1 2 3 4 5

Very Average Very

Little amount much

The respective scores given for each of such question are summed to give a total that is used to rate the
employees. Rating scales such as this one are probably the most common kinds of performance appraisal
used, but they suffer from a number of problems. One is that managers are inclined to give everyone a high
rating thus failing to differentiate among them. Another is that managers tend to be influenced more by recent
employee’s behaviour than the past behaviour.
Critical incident is another approach. In this case poor and good incidents are recorded and at the end of
the period, the supervisor goes through the diary and assesses the evaluation. The more good incidents the
better the employee. The problem here is that the measurement is qualitative and comparative, and so the
method cannot determine precisely the actual performance of the employee.

The third approach is the famous management by objective method (MBO). In this case the employee’s
performance is judged by the objectives set with his participation at the beginning of the period. For example,
suppose a sales manager sets a goal of increasing sales in his territory next year by 15 per cent. At the end
of the year this objective provides an efficient framework for appraisal. If sales have indeed increased by 15
per cent or more, a positive performance appraisal may be in order. But if sales have increased by less than
15 per cent and if the manager is directly responsible for the disappointing results, a more negative evaluation
may be appropriate. For this method of appraisal to be effective and useful, there must be a very clear
understanding between the manager and his superior during setting of the objectives. The authority and
resources necessary to achieve the set objectives must be delegated to the manager. Without this, the
manager may claim frustration and lay blame on the superior.

Directing

Directing is the heart of managerial process since it involves the initiation of action. Directing entrails three
elements that are action oriented in nature. These are motivation, communication and leadership.

Motivation

This is the energizing force or drive that make people behave in a particular way. The cases of behaviour
are said to be either psychological or physiological. So this notion can be tied to the concept of human needs
which are hierarchical in nature. These needs give rise to wants and in turn wants cause tensions which
initiate action. Action results in satisfaction or dissatisfaction which in turn determines the choice of future
effort to satisfy needs. It is indeed this choice of future effort that a manager is concerned with. It has got to
be the effort or behaviour desired by the organizing. Using the famous Maslow’s hierarchy of human needs
to explain the role of motivation in management, we may proceed as follows: At the bottom level are basic
needs such as food, sex and water. Organizations tend to satisfy these needs by giving reasonable
renumeration e.g. salaries, fringe benefits, etc for a job well done. At the next level are safety needs such
as shelter, protection from enemies, job security, etc. similarly these are satisfied by giving financial rewards.
Immediately above these needs are the social needs or belongingness needs. Since man seeks association
with others, organizations arrange group activities and assign personnel to these groups. Then above there
are the ego and esteem needs. People have an urge to be recognized for what they have achieved.
Organizations tend to satisfy these needs by providing status and prestige symbols like carpeted office, title
tags, personal parking, etc. Most human beings also want to realize their full potential. Organizations find
this difficult to provide for because of division of labour and specialization, but where possible organizations
do provide opportunities to individuals to exploit and realize their potentials. For example, universities offer
grants and time to professors to carry out research. Since human behaviour is caused, motivating the
individual through satisfaction of needs will direct his behaviour towards accomplishment of organizational
goals. Motivation can also be explained by Fredrich Herzberg’s two factor model. An employee can
experience any condition within a continuum that range from dissatisfaction on the other; or alternatively
experience any condition on a continuum that ranges from satisfaction on the one end to no satisfaction on
the other. In the first case, factors such as pay, security of job, patterns of supervision, interpersonal relations
and so o influence dissatisfaction, whereas in the second case factors such as work itself, responsibility,
recognition and so on influence satisfaction. Managerial implication here is that managers must use the first
factors to eliminate dissatisfaction which does not necessarily create satisfaction. The manager should use
the second set of factors to enhance satisfaction and thus motivate that subordinate especially when this is
approached from the point of view of Douglas McGregory’s theory: Y; which partly holds that people will both
seek and accept responsibility under favourable conditions.

Communication

Communication is the process of transferring meaning or understanding from one person to the other. This
is important in management because it facilitates coordination. Managers are in fact said to spend over 70
per cent of their time communicating

There are at least four components of communication process. These are source of the message the
message itself, the channel or medium and the audience or the receiver of the message. Certain factors
pertaining to these components may influence the extent to which the components will contribute to or detract
from effective communication. For example, source credibility (a source which is regarded highly or liked or
trusted by audience) enhances effective communication. The level of awareness and intelligence of the
audience may influence communication effectiveness. Managers must consider these factors keenly before
any communication is attempted.

There are two types of communication processes that occur in organizations. The first is interpersonal
communication. This takes the forms of oral, written and non-verbal. Oral communication takes place when
two or more people talk to each other face to face or through telephone. The advantage in this form of
communication is that feedback is possible and immediate. Feedback helps the source of the message in
ascertaining whether the message has been received accurately or not. The other advantage is that oral
communication is easy to use. One shortcoming of this communication method is that in many cases people
may lip before thy think. That causes them to say what they did not mean. Another form of interpersonal
communication is written communication. This includes memos, letters, reports and bulletins. The main
advantages in this case are accuracy and the relative permanency of the record. However, the main
disadvantage is the lack of feedback. Whereas oral communication is instant, written communication is time-
consuming. Non-verbal communication is the last form of interpersonal communication. This form is mainly
observable. For example, the body language. When people stand far from each other or close to each other
the idea present may be hostility or familiarity. The surrounding may be set to convey specific ideas or
meanings. For example, the witchdoctor’s environment may be set to pass the message of credibility.

The second type of communication is managerial communication. This is communication between the
various positional levels of the organization. This takes the forms of vertical and horizontal communications.
Vertical communication is between two positions of different levels whereas horizontal communication usually
follows the officially established patterns. For example, superior to subordinate or vice versa.

There are other factors that may become barriers to effective communication if managers do not address
themselves well to these factors. Noise is one. This is anything that disrupts communication process. It can
be a typographical error in a report; loud music that will make two people not hear each other or a lost letter.
Others are status and power differences and semantics.

Controlling
Controlling is a managerial function which is concerned with evaluating how well the operations are faring.
This involves monitoring and adjusting organizational activities toward goal attainment. It was mentioned
earlier that planning facilitates control. It is therefore true that one cannot control what was not planned.

Controlling is done for a number of reasons. One of the reasons is that the organizational environment is
dynamic and so frequent changes occur. Concurrent control is therefore necessary to handle these changes.
Another reason is that concurrent control provides data which serve as basis for further decision making. For
example, monitoring inventory may help managers to offset shortages. Another important reason is that
control helps managers prevent problems that would probably worsen if not detected. The above reasons
suggest that controlling is mainly in the areas of quality, physical resources, personnel and finance.

The process of control involves three steps. The first step is the establishment of performance standards
which may be physical such as quantities of products, units of service man-hours, etc, or monetary such as
costs, revenue and so on. These standards are derived from the plans made during the planning process.
The second step of the controlling process entails measurement of actual performance. The ease with which
the performance is measured depends on whether the standards were quantified or not. Qualitative
standards are usually subjective and performance is difficult to measure accurately. It is said that “as jobs
move away from the assembly line, the shop, or the accounting machine, controlling them becomes more
complex and often more important”. The third step of the controlling process is concerned with correction of
deviation which must of course follow from comparison of actual with targeted performance.

This correction of deviation in performance is the point at which control is integrated with the other managerial
functions; the manager may correct by redrawing his plans or modifying his goals; or he may correct by
exercising his organization function through reassessment of classification of duties; or he may correct by
additional staff through better selection and training of subordinates; or again he may correct through better
directing. This overlap of control function with other functions indicates that managerial process is an
integrated system.

Finally, the important characteristics of effective control are integration of the managerial functions, objectivity
in setting the standards of performance, timeliness in providing information, accuracy in assessing and
quantification and flexibility in the total control system in order to accommodate various changes.
Summary

Management has been identified as a systematized body of knowledge based on general principles,
concepts, theories and techniques which are verifiable in terms of business practice. These principles,
concepts, theories and techniques are embodied in the managerial functions of planning, organizing, staffing,
directing and co-ordinating which form the job of a manager.

Planning is a blue-print of the organizational intentions that will achieve desired organizational objectives.
Attention here is drawn on the establishment of objective, strategic plans and tactical plans. Organizing is
designing the organizational structure by grouping activities and providing a leader upon whom authority is
bestowed to enable him get activities done by those below him/her. Staffing is concerned with the
recruitment, selection and training of personnel required by the organization. In directing, the manager is
charged with the responsibility of leading, motivating and appraising personnel; and lastly is the controlling
function which is concerned with evaluating how well the organization is faring.

DISCUSSION AND REVIEW QUESTIONS

1. (a) What is management?

2. (b) Of what importance is the knowledge of management principles, theories and concepts to a
manager?
3. What comprises the manager’s job?
4. (a) What do managers do when performing the organizing function as part of their job?
5. Identify and explain the various methods of development and training organizational personnel.
6. “Management by objectives” is said to be one of the best methods of appraising staff performance.
Explain how it is used mentioning its advantages and disadvantages.
7. Explain the relevance of Abraham Maslow’s hierarchy of needs to the process of motivation.
8. (a) What is communication in management?
9. (b) Identify four important elements of the communication model and state the factors pertaining to
each of them that may influence the extent to which these elements contribute or detract from
communication effectiveness.