The Five Functions of Management

The Five Functions of Management

Creative Problem Solving

Planning

Organizing

Staffing

Directing

Controlling

The Foundation of ManagementExcel

Bernard L. Erven

Department of Agricultural Economics

Ohio State University Extension

Our Management Excel student:

• A manager who happens to manage a farm or horticultural business.

• A manager challenged to make efficient use of resources.

• A manager challenged with getting things done through people.

• A manager who has opportunity to use of all the tools of management that any other manager uses.

• A manager who has a way of life like any other manager.

Management Excel is about changing people not about changing businesses. We change people by helping them improve their management skills. Our expectation is that with these tools, they are then likely to change their businesses.

Management

In Management Excel, we start with an assumption of the universality of management. Management is management. Management is generic. Management principles are general rather than specific to a type of firm or organization. However, management is universal only if the manager has become familiar with the specific situation in which it is applied. Production technology, customer characteristics and the culture of the industry are examples of specifics that managers need to learn to be effective in applying their generic management skills.

A definition:(1)

Management is creative problem solving. This creative problem solving is accomplished through four functions of management: planning, organizing, leading and controlling. The intended result is the use of an organization's resources in a way that accomplishes its mission and objectives. (Figure 1.1, From Higgins, page 7)

In Management Excel, this standard definition is modified to align more closely with our teaching objectives and to communicate more clearly the content of the organizing function. Organizing is divided into organizing and staffing so that the importance of staffing in small businesses receives emphasis along side organizing. In the management literature, directing and leading are used interchangeably. (Note figure of Management Excel wheel)

Planning is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.

Organizing is establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.

Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.

Directing is influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives.

Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.

Each of these functions involves creative problem solving. (Figure 4.2 from Higgins, page 118) Creative problem solving is broader than problem finding, choice making or decision making. It extends from analysis of the environment within which the business is functioning to evaluation of the outcomes from the alternative implemented.

An Important Qualification to Success

Management success is gained through accomplishment of mission and objectives.