FUNCTIONS OF MANAGEMENT

Management has been described as a social process involving responsibility for

economical and effective planning & regulation of operation of an enterprise in the
fulfillment of given purposes. It is a dynamic process consisting of various
elements and activities. These activities are different from operative functions like
marketing, finance, purchase etc. Rather these activities are common to each and
every manger irrespective of his level or status.
Different experts have classified functions of management. According to George
& Jerry, There are four fundamental functions of management i.e. planning,
organizing, actuating and controlling. According to Henry Fayol, To manage is to
forecast and plan, to organize, to command, & to control. Whereas Luther Gullick
has given a keyword POSDCORB where P stands for Planning, O for
Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting &
B for Budgeting. But the most widely accepted are functions of management
given by KOONTZ and ODONNEL
i.e. Planning, Organizing, Staffing, Directingand Controlling.
For theoretical purposes, it may be convenient to separate the function of
management but practically these functions are overlapping in nature i.e. they are
highly inseparable. Each function blends into the other & each affects the
performance of others.

1. Planning
It is the basic function of management. It deals with chalking out a future
course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals. According to KOONTZ,
Planning is deciding in advance - what to do, when to do & how to do. It
bridges the gap from where we are & where we want to be. A plan is a
future course of actions. It is an exercise in problem solving & decision
making. Planning is determination of courses of action to achieve desired
goals. Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals. Planning is necessary to ensure
proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion,
uncertainties, risks, wastages etc.

2. Organizing
It is the process of bringing together physical, financial and human
resources and developing productive relationship amongst them for
achievement of organizational goals. According to Henry Fayol, To
organize a business is to provide it with everything useful or its functioning
i.e. raw material, tools, capital and personnels. To organize a business
involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

Identification of activities.

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.

3. Staffing
It is the function of manning the organization structure and keeping it
manned. Staffing has assumed greater importance in the recent years due
to advancement of technology, increase in size of business, complexity of
human behavior etc. The main purpose o staffing is to put right man on
right job i.e. square pegs in square holes and round pegs in round holes.
According to Kootz & ODonell, Managerial function of staffing involves
manning the organization structure through proper and effective selection,
appraisal & development of personnel to fill the roles designed un the
structure. Staffing involves:

Manpower Planning (estimating man power in terms of searching,

choose the person and giving the right place).

Recruitment, Selection & Placement.

Training & Development.

Remuneration.

Performance Appraisal.

Promotions & Transfer.

4. Directing
It is that part of managerial function which actuates the organizational
methods to work efficiently for achievement of organizational purposes. It
is considered life-spark of the enterprise which sets it in motion the action
of people because planning, organizing and staffing are the mere
preparations for doing the work. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising,
motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:

Supervision

Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their

superiors. It is the act of watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates
with zeal to work. Positive, negative, monetary, non-monetary incentives
may be used for this purpose.
Leadership- may be defined as a process by which manager guides and
influences the work of subordinates in desired direction.
Communications- is the process of passing information, experience,
opinion etc from one person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and
correction of deviation if any to ensure achievement of organizational
goals. The purpose of controlling is to ensure that everything occurs in
conformities with the standards. An efficient system of control helps to
predict deviations before they actually occur. According to Theo Haimann,
Controlling is the process of checking whether or not proper progress is
being made towards the objectives and goals and acting if necessary, to
correct any deviation. According to Koontz & ODonell Controlling is the
measurement & correction of performance activities of subordinates in
order to make sure that the enterprise objectives and plans desired to
obtain them as being accomplished. Therefore controlling has following
steps:

Establishment of standard performance.

Measurement of actual performance.

Comparison of actual performance with the standards and finding

out deviation if any.

Corrective action.

Models of Organizational Behavior

LO 1 meaning and importance of ob
o Explain key elements of organizational behavior
L0 2 Discuss models of OB
o Discuss Theories of management x,y,z
o

Compare and contrast models of OB autocratic, custodial,

supportive, collegial and system

OB Systems
All organizations achieve goals by creating, communicating and operating s
system. (Newstrom 27) Some systems are consciously created and regularly
looked at and updated. The purpose of these systems is to help managers
shift everything in the organization people, technology, structure and
environment - to get results, or outcomes for the organization.
Three criteria
Progressive Organizations measure their results or outcomes by three
criteria
Performance
Product and services quality and quantity, level of customer service
Employee satisfaction
May be measured by - lower absenteeism, tardiness or turnover
Personal growth and development
Employees gain lifelong knowledge and skills leading to continued
employability and career advancement.

Performance

Employee
satisfaction

Personal
Growth and
Development

FIGURE 1 THREE CRITERIA TO MEASURE OUTCOMES OF OB SYSTEMS

A system comes out of the beliefs and intentions of those who create it owners - and from the managers who run it. The model that an organization
uses comes from assumptions and beliefs about the way things are, the
purpose of these activities and the way they should be.
The thinking of owners and managers comes from fact premises and value
premises.
Fact premises
Fact premises are a persons view of how the world behaves. The view
comes from science and personal experiences, from the important things a
person learns. Fact premises come from direct and indirect lifelong learning
and experiences and help guide our behavior.
Value premises
Value premises are different. Value premises are how desirable something is.
Value premises are beliefs we hold. We control these. We can choose,
change or replace our value premises, but this is not always easy because we
hold them deeply.
Owners and Managers set up organizations based on this thinking.

Vision is what the organization can be a desirable future.

Mission identifies the business the organization is in, markets, types of
customers and the reasons for it to exist.
Goals are achievements the organization is aiming for in a set time. For an
organization to succeed, management and employee goals must merge.

This organizational culture is a reflection of the formal organization with

policies, structures and procedures. Managers use a leadership style,
communication skills, and knowledge of interpersonal and group interactions
to create a quality of life for employees. If this is done correctly, employees
will be motivated to reach organizational goals. Thus, a good system results in
motivation. Motivation, together with employee skills and abilities, leads to
goals being reached and people being satisfied.
Good OB builds mutual support with manager and employee jointly influencing
each other and jointly benefittingpower with people, not over them.
Modern OB is based on human values of treating people with dignity.
McGregors Theory X and Theory Y
Theory X says that most people dont like to work and will avoid it if they can.
Theory X managers believe that they need to force and threaten people to
work.
Theory Y says that people can direct and control themselves, working towards
the goals set by a company.
Ouchis Theory Z says that workers, managers and can share control, work as
a team to accomplish the companys goal.
Theory The
X
Theory
Y
Theorypremises,
Z
organizational
modelfeeds
into value
Employees
dislikehelp
work shape
Employees
view
work is aEmployees
like work
which
vision.
Vision
stretching..of
and will try to avoid it.
as a natural part of life.
mission and goals pinpoint targets for achieving that
Employees prefer to be
Employees prefer
mission. Together, models, values, vision, mission and
controlled and directed. limited control and
Employees help make
goals
create the organizational
culture.
Employees
seek exist and
direction.
decisions
(Newstrom
30)
security, not
Employees
will seek
responsibility.
responsibility under
Employees take
proper work conditions.
individual responsibility
Employees must be
Employees perform
intimidated by
better in work
Employers and
managers to perform.
environments that are
managers share control
Employees are
not intimidating.
motivated by financial
Employees expect long
rewards.
Employees are
term employment,
motivated by many
slower rates of
different needs.
promotion
Activity
Complete the x and y self assessment.
Which type of manager do you want to work for?
Which type of manager will you be?
CLASS DISCUSSION

Discuss Theory X Y Z. Which theory if any do you believe in? Do you

think that both exist in different places? Can you give examples?.

Five Models of Organizational Behavior:

We will look at five models of organizational behavior in this course.

Autocra
tic
Model

Custodi
al
Model

Collegia
l Model

Support
ive
Model

System
s Model

FIGURE 2 FIVE MODELS

These models are the most common models in use over the last 100 years.
They are in order. Some of the oldest are still practiced.
Models are possible explanations which explain how things work in an
organization. Models are guides to understanding owners and management
behavior in particular. Top managers can and do influence the whole
organization.
However, these models may be in use within a department or branch or in the
whole organization. No model can explain everything.
Managers choose models based on people, technology, environment and
structure. Models can change over time depending on circumstances.

Activity
What do you know about about Prince Alwaleed Bin Talal Bin Abdulaziz, Dahi
Khalfan Tamim, Dalia Mogahed, Mohammed Alabbar? (Note: these were the
first four in Arabian Businesses Most Powerful Arabs List March 2010)
About Mark Zuckerman, Bill Gates, Steve Jobs, Carly Fiorino, Raja Essa Al
Gurg, Juma Al Majid, HH Sheik Hamdan bin Mohd Al Maktoum, Majid Al
Futtaim.?
How does their management thinking affect their
organizations?

1 Autocratic Model

This model came about during the industrial revolution, in the 1800s and
1900s. It depends on power The manager has the power to demand you
do this or else and an employee who does not follow orders is punished.
The manager has formal, official, authority over employees.
This model assumes that employees have to be directed and pushed into
doing the work. In this model, management does the thinking, employees
obey orders and depend on the manager. Employees are tightly controlled.
The manager can hire, fire and perspire them.
Employees may obey managers but employees may not respect
management.
Typically, employees receive minimum pay for minimum expected
performance. Employees may have lower skills. Often, employees work in
the authority model because they have to.to provide subsistence for
themselves and their families.
Its weakness is that it leads to micro management With micro
management, managers control all details of daily operations. Managers
control time and processes, they put their needs above those of employees,
they insist on complicated approval processes for even the smallest things
and closely monitor all results.
The problem with the autocratic model and micro management is that it
leads to low employee morale, poor decision-making (no one will make a
decision because he/ she is afraid of the decision being over turned) and high
turnover. As well, employees kept quiet about hating the workplace, they
certainly made their feelings known at home and in the community.
This model can get things done BUT it has high human costs. It can be useful
in crisis situations, within armies or with short-term employees. (Newstrom 34)
The autocratic model was acceptable 100 years ago. However, todays
understanding of peoples needs as well as changing society values show
better ways of to organize behavior.

2. Custodial Model

In the late 1800s, employers realized that employees might work better if their
basic needs more satisfied, if they were more secure and had a better quality
of work life. This was called paternalism - taking care of employees by
providing them with benefits to meet their security needs.
The custodial approach depends on economic resources money for wages
and benefits - to motivate employees. The company has to have enough
money to cover these costs. By the 1930s most employers were offering
welfare programsfor example, housing, medical care and insurance, fewer
working hours sick pay, pensions and paid vacation time off.
The problem with the custodial model is that it leads to dependence on the
organization by the employee because of the security offered. Employees do
not want to leave the organization, not so much because they like the job, but
because they like or depend on the benefits that go with it. They cannot afford
to quit.
In this model, employees may focus on economic rewards. They may be
reasonable content, but may not be highly motivated just passively
cooperative.
Companies that adopt the custodial approach normally have a lower staff
turnover. However, employees do not produce their best work and are not
motivated to grow to their full potential. The custodial model is a good
foundation for organizations to grow to the next approach. ( Newstrom 35)

3. Supportive Model
The supportive model came from research done in the 1920s and 1930s. It
depends on leadership, not authority or money. Through leadership,
managers provide a work situation in which employees can develop.
The supportive model assumes that employees want to work and will take
responsibility. Employees are encouraged to be involved in the organization.
Employees are more strongly motivated because their status and
recognition needs are better met than with earlier models.
The supportive approach is not about money, but about the way people are
treated at work. A supportive manager helps employees solve problems and
accomplish their work. However, some managers may agree with the model
but not actually practice it at work.
This model is followed widely, especially in the West, because it responds to
employee drives for complex needs. It is especially useful in production work
places. Employees in developing countries are aware of management
practices around the world and are demanding more modern approaches.

4. Collegial Model

This model began about 50 years ago. Collegial means people working
together cooperatively. In this model, management builds a feeling of
partnership with employees. The environment is open and people participate.
The collegial model is about team work. Managers are coaches to help build
better teams. Employees are responsible they feel obliged to others on the
team to produce quality work. Employees must be self-disciplined. Many
employees feel satisfied that they are making a worthwhile contribution. This
leads to self actualization and moderate enthusiasm in the way they perform.
The collegial model is especially useful for creative work, like marketing or
communications or in thinking environments, like education or planning.
(Newstrom 38)

5. The System Model

This is the most recent model. In this model, people want more than money,
job security and cooperative teams. Employees today want trust, an ethical
workplace, managers who show care and compassion and a workplace that
has a sense of community.
The system model focuses on identifying developing and managing the
strengths within employees. Managers focus on helping employees develop
feelings of hope, optimism, self confidence, empathy, trustworthiness, esteem,
courage, efficacy and resiliency.
In the system model, Managers protect and nurture their employeesto
develop a positive workplace culture which leads to organizational success
and committed employees.
Both managers and employees need social intelligence in this model with
managers as facilitators. (Newstrom 39).

In the system model, managers and employees see the mutual benefits and
obligations they share in the complex system (the organization). Everyone has
psychological ownership for the organization, its products and services.
Everyone feels possessive, responsible and at home in the organization.
Employees can reach a state of self motivation. Their highest order needs are
met. They have passion and commitment to organizational goals, not just
their own personal wants and needs.

TABLE 1 FIVE MODELS OF ORGANIZATIONAL BEHAVIOR (NEWSTROM 33)

Autocratic

Custodial

Supportive

Collegial

System

Based on

Power

Economic
resources

Leadership

Partnership

Trust, sharing

Managerial
Orientation

Authority

Money

Support

Teamwork

Caring,
compassion

Employee
Orientation

Obedience

Security and
benefits

Job
performance

Responsible
behavior

Psychological
ownership

Employee
psychological
result

Dependence
on boss

Dependence
on
organization

Participation

Selfdiscipline

Self
motivation

Employees
needs met

Subsistence
(survival)

Security

Status and
recognition

Selfactualization

Wide range

Performance
result

Minimum

Passive
cooperation

Awakened
drives

Moderate
enthusiasm

Passion and
commitment
to
organizational
goals

Conclusions
Models have changed over time. The choice of model depends on employee
needs and the situation. Any of the models work in some situations. There is
a trend toward the newer models.
The Model used depends on the knowledge and skills of managers, the
expectations of employees, the policies and ways of life in the organization
and the nature of the work e.g. low skilled, high programmed work, temporary
work, or intellectual work.

Evolving Usage and Contingency

There is no best model. Management is to identify the model it is actually
using and then assess its current effectiveness.
Managers must also be flexible. Every organization has a changing
environment and task conditions. A good manager should respond, if
necessary, by changing the model which he or she is using.
Relation to Human Needs
All models are related to human needs. Each model is built on the others and
is progressive because employees and organizations progress to situations
where newer needs arise.
Increasing use of some Models
There is a trend toward supportive, collegial and system models. Top
managers in multi-national corporations cannot be authoritarian and still be
effective. Decisions need to be made closer to operations, the front line. In
the Middle East, some organizations will be forced to redefine the old
authoritarian and custodial models and move towards more participative ones.
As an example of this, in January 2011, many Arabs demonstrated in the
streets of Tunisia, Egypt, Lebanon, Jordan and Yemen. They demanded the
removal of old authority figures and requested more of a supportive or
collegial model.
Managerial Flexibility
Managers need to identify the current behavioral model but also must keep it
flexible Managers need to read, reflect, to interact with others, and to be
receptive to challenges to their thinking from collegues and employees.
(Newstrom 42)

Review Questions
1 What is the meaning of an organizational behavior system?
2 What criteria do managers use to assess the end results of an OB

3
4
5

system?
Describe fact and value premises. List an example of each.
What is the difference between mission, vision and goals.
What are the three managerial assumptions described in the text?

Give examples of each from your own experience.

When would a manager use each of the assumptions? What factors

would a manager consider when making the choice?

Compare and contract each of the five models of organizational

behavior and give the advantages and disadvantages of each.

What is the underlying assumption (Theory X or Theory Y) of each of
the four models? Give reasons for each of your answers

Review
Insights
An insight is a new and clear perception. It is an ability to see something
clearly. Insights are new knowledge or new ways to view something.
Insights are things you want to remember. (Newstrom 24)
Highlight in your own words ten insights from this unit.
1
2
3
4
5
6
7
8
9
10

Critical thinking
Think back on the material in this unit. (Newstrom 25)
What three questions would you raise about the material?

Reflection
A reflection is what you think and feel about something. (Newstrom 25)
Express your personal thoughts and feelings or reactions to any
of the ideas or topics in this unit. Be prepared to share these with
the class.
MASLOWS HIERARCHY
http://www.netmba.com/mgmt/ob/motivation/maslow/