2  Functions of Management

2.1 The Five Functions

If the previous topic answered what management is, this one answers what managers do. Henri Fayol’s original five — plan, organise, command, coordinate, control — were re-grouped into the modern textbook sequence used by Koontz & Weihrich and Robbins & Coulter: Planning, Organising, Staffing, Directing (Leading), Controlling (koontz2010?; robbins2018?). Coordination is no longer counted as a separate function — it is treated as the essence that runs through all the others. Luther Gulick’s expanded mnemonic POSDCORB — Planning, Organising, Staffing, Directing, Co-ordinating, Reporting, Budgeting — is still examined.

flowchart LR
  P[Planning] --> O[Organising]
  O --> S[Staffing]
  S --> D[Directing]
  D --> C[Controlling]
  C -. Feedback .-> P
  CO[(Coordination —<br/>essence of management)] -. runs through .-> P
  CO -. runs through .-> O
  CO -. runs through .-> S
  CO -. runs through .-> D
  CO -. runs through .-> C
  style P fill:#E3F2FD,stroke:#1565C0
  style C fill:#F1F8E9,stroke:#558B2F
  style CO fill:#FFF3E0,stroke:#E65100

2.2 Planning

Planning is deciding in advance what to do, how to do it, when to do it and who is to do it (koontz2010?). It is the primary function — every other function works on what planning has set down.

2.2.1 Nature of planning

Planning is forward-looking, goal-directed, pervasive, intellectual, continuous, integrated. It bridges the gap between where we are and where we want to be. It rests on a set of assumptions about the future called premises.

2.2.2 Steps in planning

TipEight Steps in the Planning Process (Koontz & Weihrich)
# Step What happens
1 Being aware of opportunities Scanning the environment, internal and external
2 Establishing objectives Setting targets — what, where, by when
3 Developing premises Forecast assumptions about the planning environment
4 Identifying alternatives Listing possible courses of action
5 Comparing alternatives Evaluating against objectives and premises
6 Choosing an alternative The point of decision
7 Formulating derivative plans Sub-plans to support the master plan
8 Numberising plans by budgeting Converting plans into measurable resource allocations

2.2.3 Types of plans

TipA Hierarchy of Plans
Plan type Time horizon Used for Example
Mission / Purpose Indefinite Why the organisation exists “To organise the world’s information” (Google)
Objectives / Goals Long to short Targets Achieve 15 per cent ROI
Strategies Long-term (3–5 years +) Direction in the face of competition Cost-leadership, differentiation
Policies Continuing Boundaries for repeated decisions “Promotion is from within”
Procedures Continuing Required sequence of steps Steps to process a refund
Rules Continuing Specific dos and don’ts “No smoking on shop floor”
Programmes Project-bound Coordinated bundle of activities New-product launch programme
Budgets One year (typically) Plans expressed in numbers Annual revenue and capex budget

Strategic, tactical and operational plans differ in time horizon, scope and level: strategic plans are made by top management for 3–5 years; tactical plans translate strategy at the middle level for 1–3 years; operational plans run a department or shift for days, weeks or months.

2.2.4 MBO — Management by Objectives

Peter Drucker’s Management by Objectives (1954) is a planning system in which superior and subordinate together set specific, measurable objectives, periodically review progress, and reward on the basis of objective achievement (drucker1954?). The four steps are goal-setting, action planning, periodic review, performance appraisal. SMART — Specific, Measurable, Achievable, Relevant, Time-bound — is the modern test of a usable objective.

2.3 Organising

Organising arranges resources and activities into a structure that lets the plan be executed. Koontz defines it as “the process of identifying and grouping the work, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work together effectively” (koontz2010?).

2.3.1 Steps in organising

  1. Identify activities required to reach the objectives.
  2. Group activities into manageable units (departments).
  3. Assign authority and responsibility to each position.
  4. Establish reporting relationships and communication channels.
  5. Provide for coordination across departments.

2.3.2 Key concepts

TipBuilding Blocks of Organising
Concept Meaning Why it matters
Authority Right to act and command Flows down the scalar chain
Responsibility Obligation to perform Cannot be delegated
Accountability Liability for results Cannot be passed on
Delegation Transfer of authority for specific tasks Frees the manager, develops the subordinate
Span of management Number of subordinates one manager can supervise Narrow span → tall structure; wide span → flat structure
Centralisation / Decentralisation Where decisions are taken Trades control vs responsiveness
Departmentation Basis for grouping activities Function, product, region, customer, process, matrix

The principle “authority can be delegated, responsibility cannot” recurs in NTA stems and is often paraphrased as “a manager is accountable to his superior for whatever his subordinate does”.

2.4 Staffing

Staffing fills and keeps filled the positions in the organisation structure. Koontz lists eight elements — manpower planning, recruitment, selection, placement, training and development, performance appraisal, compensation, and separation.

TipThe Staffing Cycle
Stage Activity Output
Manpower planning Forecast people needs Number and kind of people required
Recruitment Attract a pool of candidates Application list
Selection Choose from the pool Offer letter
Placement & induction Put on the job, orient Employee at workstation
Training and development Improve skills and knowledge Capable employee
Performance appraisal Measure on the job Feedback, ratings
Compensation Reward for performance Pay, benefits
Separation Retirement, resignation, dismissal Position to be re-filled

Staffing is an independent function in modern texts (Koontz, Robbins) but is sometimes folded into “directing” in older Indian texts. The HR-specific aspects are taken up in the OB and HRM chapters.

2.5 Directing (Leading)

Directing is the executory function — it sets people in motion. Its four sub-functions are supervision, motivation, leadership and communication.

TipFour Pillars of Directing
Pillar What it does Theory anchor
Supervision Overseeing the work of subordinates Span of control, Likert’s four systems
Motivation Inspiring willingness to work Maslow, Herzberg, McClelland, Vroom
Leadership Influencing people toward goals Trait, behavioural, contingency, transformational
Communication Exchanging meaning Topic 3 of this chapter

Directing is pervasive, continuous and concerned with human behaviour — and is the function in which the manager most clearly behaves as a leader rather than as an administrator. The detailed treatment of motivation and leadership belongs to the OB chapter.

2.6 Controlling

Controlling is the function that closes the loop: it measures actual performance against planned standards, identifies deviations, and triggers corrective action. Koontz defines it as “the measurement and correction of performance to make sure that enterprise objectives and the plans devised to attain them are accomplished” (koontz2010?).

2.6.1 The control process

flowchart LR
  S[1. Establish<br/>standards] --> M[2. Measure<br/>actual performance]
  M --> C[3. Compare with<br/>standards]
  C --> A{4. Deviation?}
  A -- Yes --> CR[5. Take<br/>corrective action]
  A -- No --> OK[Continue]
  CR -. feedback .-> S
  style S fill:#E3F2FD,stroke:#1565C0
  style CR fill:#FFEBEE,stroke:#C62828

2.6.2 Types of control

By timing relative to the activity:

  • Feedforward (preventive) control — before the activity. Inspecting raw material before production.
  • Concurrent (real-time) control — during the activity. A supervisor on the shop floor; a SCADA dashboard.
  • Feedback (post-action) control — after the activity. Variance analysis at month-end.

By focus:

  • Strategic, tactical, operational controls, mirroring the levels of planning.
  • Financial, quality, inventory, behavioural controls, by what is being controlled.

2.6.3 Techniques of control

TipCommon Control Techniques
Technique What it controls Where it lives
Budgetary control Costs, revenues, capex Finance
Standard costing & variance analysis Cost performance Finance / production
Statistical Quality Control (SQC) Process quality Production
Break-even analysis Sales–cost–profit relationship Finance / marketing
Ratio analysis Financial performance Finance
Internal audit Compliance and process integrity Audit
Management Information System (MIS) Information for decisions IT / management
Balanced Scorecard Multi-dimensional performance Strategy
PERT / CPM Project schedules Operations

Robert N. Anthony’s distinction between strategic planning, management control and operational control (1965) is a useful frame at the postgraduate level (anthony1965?).

2.7 Coordination — the Essence

Mary Parker Follett described coordination as “the orderly arrangement of group effort to provide unity of action in the pursuit of a common purpose” (follett1941?). Coordination is not a sixth function — it is the thread that runs through all five.

TipFollett’s Four Principles of Coordination
Principle Meaning
Direct contact People at all levels meet face-to-face, not only through paper
Early stage Coordination must begin during planning, not after execution
Reciprocal relationship Every part affects and is affected by every other part
Continuity Coordination is a continuous, never-ending process

2.8 Practice Questions

Q 01 Five Functions Easy

Which of the following is not a managerial function in the Koontz–Weihrich classification?

  • APlanning
  • BOrganising
  • CMarketing
  • DControlling
View solution
Correct Option: C
Koontz–Weihrich's five functions are Planning, Organising, Staffing, Directing/Leading, Controlling. Marketing is a business function, not a management function.
Q 02 Function Matching Medium

Match the function with its description:

(i) Planning (a) Filling positions in the organisation
(ii) Organising (b) Measuring and correcting performance
(iii) Staffing (c) Deciding in advance what to do
(iv) Controlling (d) Grouping activities and assigning authority
  • A(i)-(c), (ii)-(d), (iii)-(a), (iv)-(b)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(d), (ii)-(c), (iii)-(b), (iv)-(a)
  • D(i)-(b), (ii)-(a), (iii)-(d), (iv)-(c)
View solution
Correct Option: A
Planning → deciding in advance; Organising → grouping activities; Staffing → filling positions; Controlling → measuring and correcting.
Q 03 Delegation Easy

"Authority can be delegated, but ____ cannot." Fill in the blank.

  • APower
  • BResponsibility
  • CWorkload
  • DDecision-making
View solution
Correct Option: B
A bedrock principle of organising: responsibility cannot be delegated. A manager remains accountable to the superior for whatever the subordinate does.
Q 04 Coordination Easy

Coordination is best described as:

  • AThe sixth function of management
  • BA separate department in the organisation
  • CThe essence of management running through all functions
  • DSynonymous with cooperation
View solution
Correct Option: C
Coordination is the essence, not a separate function. Mary Parker Follett described it as the orderly arrangement of group effort for unity of action.
Q 05 Control Timing Easy

A control system that operates before the activity begins is called:

  • AFeedback control
  • BConcurrent control
  • CFeedforward control
  • DPost-action control
View solution
Correct Option: C
Feedforward = before; concurrent = during; feedback = after. Inspecting raw material before production is a feedforward control.
Q 06 MBO Easy

Management by Objectives (MBO) was popularised by:

  • AF.W. Taylor
  • BHenri Fayol
  • CPeter Drucker
  • DHenry Mintzberg
View solution
Correct Option: C
Peter Drucker introduced MBO in The Practice of Management (1954). The standard test of objectives is SMART.
Q 07 Control Process Medium

Which of the following is not a step in the standard control process?

  • AEstablishing standards
  • BMeasuring performance
  • CForecasting the future
  • DTaking corrective action
View solution
Correct Option: C
Standard control steps are Standards → Measure → Compare → Corrective action. Forecasting belongs to planning.
Q 08 Span of Control Easy

A "wide span of management" tends to produce a structure that is:

  • ATall
  • BFlat
  • CMatrix
  • DCentralised
View solution
Correct Option: B
Wide span → fewer levels → flat. Narrow span → more levels → tall.
ImportantQuick recall
  • Five functions: Planning–Organising–Staffing–Directing–Controlling. POSDCORB adds CO-ordinating, Reporting, Budgeting.
  • Planning steps (Koontz): opportunity → objectives → premises → alternatives → comparison → choice → derivative plans → budgeting.
  • Organising tagline: authority delegated, responsibility never.
  • Directing rests on four pillars: supervision, motivation, leadership, communication.
  • Control process: standards → measure → compare → corrective action. Three timings: feedforward, concurrent, feedback.
  • MBO — Drucker, 1954. SMART — Specific, Measurable, Achievable, Relevant, Time-bound.
  • Coordination = essence, not a sixth function. Follett’s four principles: direct contact, early stage, reciprocal, continuity.