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Assessing The Four Functions Of Management Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 3899 words Published: 1st Jan 2015

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The base function is to: Plan It is the foundation area of management. It is the base upon which the all the areas of management should be built. Planning requires administration to assess; where the company is presently set, and where it would be in the upcoming. From there an appropriate course of action is determined and implemented to attain the company’s goals and objectives

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Planning is unending course of action. There may be sudden strategies where companies have to face. Sometimes they are uncontrollable. You can say that they are external factors that constantly affect a company both optimistically and pessimistically. Depending on the conditions, a company may have to alter its course of action in accomplishing certain goals. This kind of preparation, arrangement is known as strategic planning. In strategic planning, management analyzes inside and outside factors that may affect the company and so objectives and goals. Here they should have a study of strengths and weaknesses, opportunities and threats. For management to do this efficiently, it has to be very practical and ample.

The subsequent function is to: Organize

The second function of the management is getting prepared, getting organized. Management must organize all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Through this process, management will now determine the inside directorial configuration; establish and maintain relationships, and also assign required resources.

While determining the inside directorial configuration, management ought to look at the different divisions or departments. They also see to the harmonization of staff, and try to find out the best way to handle the important tasks and expenditure of information within the company. Management determines the division of work according to its need. It also has to decide for suitable departments to hand over authority and responsibilities.

The third function is to: Direct

Directing is the third function of the management. Working under this function helps the management to control and supervise the actions of the staff. This helps them to assist the staff in achieving the company’s goals and also accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics, and department leadership.

Employees those which are highly provoked generally surpass in their job performance and also play important role in achieving the company’s goal. And here lies the reason why managers focus on motivating their employees. They come about with prize and incentive programs based on job performance and geared in the direction of the employees requirements.

It is very important to maintain a productive working environment, building positive interpersonal relationships, and problem solving. And this can be done only with Effective communication. Understanding the communication process and working on area that need improvement, help managers to become more effective communicators. The finest technique of finding the areas that requires improvement is to ask themselves and others at regular intervals, how well they are doing. This leads to better relationship and helps the managers for better directing plans.

The final function is to: Control

Control, the last of four functions of management, includes establishing performance standards which are of course based on the company’s objectives. It also involves evaluating and reporting of actual job performance. When these points are studied by the management then it is necessary to compare both the things. This study on comparision of both decides further corrective and preventive actions.

In an effort of solving performance problems, management should higher standards. They should straightforwardly speak to the employee or department having problem. On the contrary, if there are inadequate resources or disallow other external factors standards from being attained, management had to lower their standards as per requirement. The controlling processes as in comparison with other three, is unending process or say continuous process. With this management can make out any probable problems. It helps them in taking necessary preventive measures against the consequences. Management can also recognize any further developing problems that need corrective actions.

Effective and efficient management leads to success, the success where it attains the objectives and goals of the organizations. Of course for achieving the ultimate goal and aim management need to work creatively in problem solving in all the four functions. Management not only has to see the needs of accomplishing the goals but also has to look in to the process that their way is feasible for the company.

Goal Management

There is a strong relationship between a successful company and an effective goal setting process. By setting goals, specifically SMART goals, employers engage their workforce and encourage employees across the company to focus and successfully achieve these goals together.

Strong goal alignment and goal visibility allows for quicker execution of company strategy by enabling management to allocate proper resources across various projects. Managers can focus their staff on the company’s most important goals and reduce task redundancy throughout their team while employees will have a greater understanding of how their efforts will serve the business goals.

Goal management also lets you establish a true pay-for-performance culture by communicating the company goals to employees, therefore providing the groundwork for linking reward systems with individual and / or team performance.

Find out how you can put goal alignment to work at your organization in our complimentary whitepaper, “Driving Success: The Incredible Power of Company-Wide Goal Alignment.”

In his piece “Notes on the Theory of Organization”, a memo prepared while he was a member of the Brownlow Committee, Luther Gulick asks rhetorically “What is the work of the chief executive? What does he do?” POSDCORB is the answer, “designed to call attention to the various functional elements of the work of a chief executive because ‘administration’ and ‘management’ have lost all specific content.”

In Gulick’s own words, the elements of POSDCORB are as follows:

Planning, that is working out in broad outline the things that need to be done and the methods for doing them to accomplish the purpose set for the enterprise;

Organizing, that is the establishment of the formal structure of authority through which work subdivisions are arranged, defined, and co-ordinated for the defined objective;

Staffing, that is the whole personnel function of bringing in and training the staff and maintaining favorable conditions of work;

Directing, that is the continuous task of making decisions and embodying them in specific and general orders and instructions and serving as the leader of the enterprise;

Co-Ordinating, that is the all important duty of interrelating the various parts of the work;

Reporting, that is keeping those to whom the executive is responsible informed as to what is going on, which thus includes keeping himself and his subordinates informed through records, research, and inspection;

Budgeting, with all that goes with budgeting in the form of planning, accounting and control

Gulick states that his statement of the work of a chief executive is adapted from the functional analysis elaborated by Henri Fayol in his “Industrial and General Administration”. Indeed, Fayol’s work includes fourteen principles and five elements of management that lay the foundations of Gulick’s POSDCORB tasks of an executive.

Fayol’s fourteen principles of management are as follows:

Division of Work

Authority and Responsibility


Unity of Command

Unity of Direction

Subordination of Individual Interest to General Interest

Remuneration of Personnel


Scalar Chain (line of authority with peer level communication)



Stability of Tenure of Personnel


Esprit de Corps

Fayol’s influence upon Gulick is readily apparent in the five elements of management discussed in his book, which are:

Planning – examining the future and drawing up plans of actions

Organizing – building up the structure (labor and material) of the undertaking

Command – maintaining activity among the personnel

Co-ordination – unifying and harmonizing activities and efforts

Control – seeing that everything occurs in conformity with policies and practices

Fayol, H. (1949). General and Industrial Management. (C. Storrs, Trans.). London: Sir Isaac Pitman & Sons, LTD. (Original work published 1918)

Service industry is getting more attention in B-World. It has never been so easy to establish a company, I should say, listed company as it is now being in service industry rapidly. Production and operation enabled companies have seen so many business management fundamentals for quality control and best team management including quality circles.

If I were to point, I would talk about Baldrige Award Framework that promotes quality awareness in organization. It is based on a weighted score of seven categories of performance criteria. Consultancy firms, IT or Hospitality services and so other services in this industry want more influential, organizer and innovator talents.

Take an example of a small IT company of 10-50 talents serving best functional and operational solutions to giants. Do you want to categorize such company in levels? E.g. One HR, One Director, One Software Engineer, One Writer, One Quality Tester, One Functional Analyst, One Support Engineer, One System Administrator, One Hardware Engineer, One Designer etc. I agree to hire masters but I am against individual operations capability. I favor multiple skills specialist or in other words “All Rounder”.

This article is to describe the team needed in today’s service industry so called as ‘Self Managing Teams”.

Emery suggested, “In designing a social system to efficiently operate a modern capital-intensive plant the key problem is that of creating self-managing groups to man the interface with the technical system.”

The basis of the autonomous work group approach to job design is socio-technical system theory that suggest that the best results are obtained if grouping is such that workers are primarily related to each other by way of task performance and task interdependence.

Charles Peguy described, “A man is not determined by what he does and still less by what he says. But in the deepest part of himself a being is determined solely by what he is.” Self-management team is made of such persons who are motivated by self.

Defining Self – Managing Team

A self-managing team or autonomous work group is allocated an overall task and given discretion over how the work is done. It provides for intrinsic motivation by giving people autonomy and the means to control their work, which will include feedback information.

Self-Directed (or Self-Managing) Teams are teams that have been structured to manage and coordinate their own activities and make many of the day-to-day decisions that would have traditionally been made by a supervisor or manager. They usually have responsibility for a complete piece of work (such as engine assembly) and they work quite closely and interdependently.

A self-management team is a permanent group of employees who together are responsible for the total process where products or services are made and delivered to internal or external clients.

According to one research, the TQM and mass production organized groups did not improve customer service quality or sales volume. While self-managed teams improved sales by 9.4% and quality of customer service by 6.3%.

In fact, comprehensive surveys report that 79% of companies in the Fortune 1,000 currently deploy such “empowered,” “self-directed” or “autonomous” teams. Because of their widespread use, much research has been devoted to understanding how best to set up self-managing teams to maximize their effectiveness.

Understanding Multi-skilled Team Better

Self-managing team incorporates the concepts of Hackman & Oldham’s job characteristics model.


Skill variety

Task significance

Task identity

Positive Feedback

– The team enlarges individual jobs to include a wider range of operative skills. It is multi-skilled team operations.

– It decides on methods of work and the planning, scheduling and controlling of work.

– It distributes tasks itself among its members. The team plans and guards the process on its own, solves daily problems, without always having to consult the manager or supporting services.

– It takes account of the social or group factors and the technology as well as the individual motivators.

– The team maintains independently contacts with others teams and staff.

– The team improves working methods on its own, and has all the relevant information available on the basis of which they evaluate their results.

– The team-members posses both qualifications on both the care they deliver as well as certain organizational qualities.

Self-Management Team Development

According to Vanessa Urch Druskat and Jane V. Wheeler “Leading Self-Management teams in organization is the process that requires specific behaviors that can be grouped into four basic functions.

__First moving back and forth between the team and the broader organization to build relationships,

__Second scouting necessary information,

__Third persuading the team and outside constituents to support one another, and

__Forth empowering team members.”

Self-Managing Team & Corporate

“Whole Foods is very committed to the team structure and self-managing work teams; they’re like the basic cells of the company. The teams are empowered. They do their own hiring. They do their own scheduling. To become a team member at Whole Foods, you have to get voted on by your team after a trial period. If you don’t get a two-thirds vote, you don’t get on the team”, said John Mackey, founder of Whole Foods on Self -managing work team.

Hewlett Packard trusts and respects for individuals, focusing on high level achievement and contribution, conducting business with integrity, achieving objectives through teamwork, and encouraging flexibility and innovation.

Let it be either small or big, no doubts most of the companies are applying to have self-management teams in organization.

Books on Self-Managing Team

Dawn Burstall, T. Michael Vallis and Geoffrey K. Turnbull, “I.B.S. Relief: A Doctor, a Dietitian, and a Psychologist Provide a Team Approach to Managing Irritable Bowel Syndrome”.

Ronald E. Purser and Steven Cabana, “The Self-Managing Organization: How Leading Companies Are Transforming the Work of Teams for Real Impact”.


This essay reviews theoretical concepts to assess the proposition that the ways in which people are managed affects the performance of the organisations within which they function. The implications of this proposition are that (a) effective management is associated with higher levels of organisational performance, while ineffective management practices are associated with inferior organisational performance.

The theoretical framework within which this assessment is performed is “Managing People in Organisations” (MPIO). MPIO is an umbrella concept that encompasses both organizational behaviour (OR) and human resource management (HRM). The concepts of leadership and its effects on organisational performance also are included in MPIO (Beech, Cairns, Livingstone, Lockyer, and Tsoukas, 2002).

MPIO includes a wide array of concepts and theories. To assess the proposition that the ways in which people are managed affects the performance of the organisations within which they function, however, this essay focused on two crucial aspects of MPIO in the contemporary period. These crucial aspects of MPIO are the responses by management to the globalised business environment and the effects of cultural diversity on management’s communications with employees, each of which is crucial to the devel

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. . .

perate on a global scale. The formal systems alone are not able to satisfy the enormous information needs necessary to coordinate such a complex configuration (Sussland, 2001). The roles and tasks of management also change noticeably in these contexts. When several different cultural backgrounds are present within a company at any one time, management cannot assume that all values are common. Often the shared understanding of the role of management becomes an instrument of integration that is more powerful than formal structures and systems. The manager, therefore, becomes a vehicle of integration. Internationalization and cosmopolitanism are the new characteristics required of this person. The task of the top manager is not that of submitting the activities of a national organization to a central control, but rather that of co-opting abilities and obtaining the involvement of the national organizations; paradoxically, attention shifts from control of the strategic content to management of the organizational process. Evaluation and reward systems must favour the free exchange of information and commitment to global objectives over the above local interests to obtain a positive attitude to integration and thus favour a clim

. . .

The process starts with a strategic assessment (see “The People Process,” page 85). This is where HR develops staffing plans to support the organization’s objectives and strategies. The process continues as hiring, training/development, and performance management activities are carried out. Finally, ongoing workforce relations and environment activities (e.g., recognition programs and employee surveys) take place. At the center of the people process are the executives and staff that comprise the HR function.


The IIA’s “Auditing Your Human Resource Function” seminar includes a risk assessment exercise where participants identify their top HR risks. A few of the most interesting and most frequently mentioned people process risks arise in the areas of objectives, employee skills, HR competency, processes, and outsourced activities.

OBJECTIVES Unaligned objectives is a risk event imbedded in the first people process activity–organization design and staffing plans. When HR does not have the appropriate level of involvement in the strategic planning process and its objectives are not aligned with those of the organization, the result can be a ticking time bomb. This disconnect can prevent management from achieving its strategic objectives. It can also result in huge compliance issues (e.g., organization downsizing, staff reductions, and unintended employment law litigation). Some organizations have managed this risk via enterprise risk management activities. In others, where HR is a key player on the management team, this is a nonevent.

EMPLOYEE SKILLS Human capital skill gaps is another risk is embedded in organization design and staffing plans. Risks arise, for example, when organizations have heavy concentrations of experienced employees in “skill positions” who will be retiring soon. A second skill gap risk is linked to changing operating environments and new strategies. These changes often require new skills that can take time to develop or acquire. Best practice HR functions manage these risks via employee database information and competency forecasting techniques.

HR COMPETENCY HR staff are at the center of the people process. HR and internal audit groups have a lot in common. Both have professional associations and certifications and play key roles in their organization’s governance process. It is also possible for both groups to have skill gaps. Some of these gaps can be remedied via training or other resources–in other cases, a change of personnel is required.

HR competency gaps are a real risk in many organizations. The internal audit issue is how to identify and communicate these gaps to management. To comply with The IIA’s International Standards for the Professional Practice of Internal Auditing, auditors have internal quality assessment programs that can include client surveys and peer group benchmarking on staff profiles (e.g., size, experience, and certifications). HR should have a similar quality program.


PROCESSES The people process, like all other processes, is subject to communication breakdowns, bottlenecks, faulty handoffs, and inefficiencies. What makes it somewhat unique is that inconsistent compliance (e.g., hiring or promotion policies) and too much (e.g., supervisor comments in “unofficial” employee files) or too little documentation (e.g., involuntary terminations) can result in litigation and reputation damage. Of course, the likelihood and magnitude of these risks depends on the organization. Best practice HR functions use technology (e.g., employee kiosks to update information, more reliance on automated controls), training, and monitoring to manage process risk.

The risks are referenced to the four objectives in the Committee of Sponsoring Organizations of the Treadway Commission’s Enterprise Risk Management–Integrated Framework (S = strategic, O = operations, R = reporting, and C = compliance). Some possible risk categories are also included to help identify various types of risk events. Sample impact and likelihood ratings are assigned to the events (4 = high and 1 = low). Also, the matrix has three priority ratings. One is calculated (impact times likelihood), the second is a “real” (i.e., subjective) rating of the inherent risk, and the third is a “real” residual risk rating. The generic ratings are only intended to demonstrate the matrix features. Individual controls are not included by design, as they are best identified and evaluated at the organization level.


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