Managerial Functions

The job of management is to help an organization make the best use of its resources to achieve its goals. To accomplish this objective managers perform four essential managerial functions: planning, organizing, leading, and controlling .

Managers at all levels and in all departments- whether in small or large organizations, for- profit or not-for-profit organizations, or organizations that operate in one country or throughout the world- are responsible for performing these four functions. How well managers perform them determines how efficient and effective their organization is.
Planning is a process that managers use to identify and select appropriate goals and courses of action. There are three steps in the planning process: (1) deciding which goals the organization will pursue, (2) deciding what courses of action to adopt to attain those goals, and (3) deciding how to allocate organizational resources to attain those goals. How well managers plan determines how efficient and effective their organization is- its performance level.3

The outcome of planning is a strategy, a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve goals. A low-cost strategy is a way of obtaining customers by making decisions that allow the organization to produce its goods or services cheaply so that prices can be kept low.

Planning is a difficult activity because normally what goals an organization should pursue and how best to pursue them – which strategies to adopt- is not immediately clear. Managers take risks when they commit organizational resources to pursue a particular strategy. Either success or failure is a possible outcome of the planning process.

Organizing is a process that managers use to establish a structure of working relationships tat allows organizational members to work together to achieve organizational goals. Organizing involves grouping people into departments according to the kinds of job-specific tasks they perform. In organizing, managers also lay out the lines of authority and responsibility between different individuals and groups, and they decide how best to coordinate organizational resources, particularly human resources.

The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals. Organizational structure determines how an organization's resources can be best used to create goods and services.4

In leading, managers articulate a clear vision for organizational members to follow and energize and enable them so that they understand the part they play in achieving organizational goals. Leadership depends on the use of power, influence, vision, persuasion, and communication skills to coordinate the behaviors of individuals and groups so that their activities and efforts are in harmony and to encourage employees to perform at a high level. The outcome of leadership is a high level motivation and commitment among organizational members. 4

In controlling, managers evaluate how well an organization is achieving its goals and take action to maintain or improve performance. If standards are not met, managers take action to improve performance.

The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness. In order to exercise control, managers must decide which goals to measure- perhaps goals pertaining to productivity, quality, or responsiveness to customers- and then they must design information and control systems that will provide the data they need to assess performance. The controlling function also allows managers to evaluate how well they themselves are performing the other three functions of management- planning, organizing, and leading- and to take corrective action.

The four managerial functions- planning, organizing leading, and controlling- are essential to a manager's job. At all levels in a managerial hierarchy, and across all departments in an organization, effective management means making decisions and managing these four activities successfully.