Maharashtra Board Class 12 Organization of Commerce and Management Chapter 2 Functions of Management PDF Download

Functions of Management

2.1 Introduction

We have discussed various management principles in the first chapter in detail. These principles are very important in managing the organization. While achieving any objective, we need to go through various functions. For example, in joint hindu family business, the KARTA is doing proper planning for every work and for every member. The KARTA organizes various things which are required to fulfill the objective. He also takes help of other members for support. For smooth functioning of family as well as family business the KARTA directs, guides, coordinates and keeps strict control on every task. Whatever, the KARTA is doing with the help of others is called as a management. Similarly, the success of every business organization is an outcome of effective and efficient management.

The tasks which are taken to achieve organizational goal is called management. Management is a set of principles which relate to the various functions such as planning, organizing, staffing, directing, coordinating, controlling etc. which are helpful in achieving organizational goals.

Teacher's Note

In India, many family businesses like your local grocery shop or small factory work on planning and control just like the KARTA of a joint family. The KARTA is like a manager who plans, organizes, and controls everything.

Exam Trick

Remember: KARTA does planning, organizing, directing and controlling. This is management. Just like your teacher plans the class, organizes the bench, directs students and controls the discipline.

Points to Remember

Management means getting work done through others.
Management has six main functions.
The KARTA manages the family business by planning and control.
Every organization needs good management to succeed.
Management is a continuous process in all organizations.

2.2 Functions of Management

According to L.A.Allen, "Management is what manager does". This definition focuses on the role of manager in the form of different functions. The functions of manager start with planning and end with controlling. But every function is interrelated with other function. They are inseparable in nature. Management functions concern with all levels of management. Different management thinkers have classified functions of management differently.

According to Henry Fayol, "To manage is to forecast and to plan, to organize, to command and to control."

Luther Gullick has given a keyword 'POSDCORB' for management functions where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting and B for Budgeting. Reporting and Budgeting functions are summarized in the function called as Controlling.

Teacher's Note

POSDCORB is like the steps you follow when you organize a class picnic: Plan the place, Organize the transport, Select who will go, Direct the children, Coordinate with teachers, and Control the budget.

Exam Trick

Remember: POSDCORB. Just like ABC is alphabet, POSDCORB is the alphabet of management functions. Write this down and you will remember all six functions.

Points to Remember

Management functions start with planning and end with controlling.
All management functions are linked to each other.
L.A. Allen said management is what the manager does.
Henry Fayol gave the definition of managing.
POSDCORB is a keyword that covers all management functions.

2.2.1 Planning

Meaning

Planning is the basic function of management. Every function of management is based on planning. It includes deciding the things to be done in advance. Planning is an intellectual process of logical thinking and rational decision making. It focuses on organization's objectives and develops various courses of action. Designing a proper planning and implementing accordingly is the key of achieving the objectives of an organization.

In short, planning is a detailed programme of future courses of action.

Definition

Following are some of the important definitions of planning:

1) Koontz and O'Donnell: "Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap from where we are and where we want to go it makes possible things to occur which would not otherwise occur."

2) James Stoner: "Planning is the process of establishing goals and a suitable course of action for achieving these goals."

Importance of Planning

It is the fundamental function which gives an outline about where to go, how to go and reduces the risk of uncertain future with the help of forecasting. The importance of planning is as follows:

1) Helps to set clear objectives: Planning is concerned with setting objectives, targets, and formulating plans to achieve them. It helps managers to analyze the present condition of the organization and on that basis to identify the ways of attaining the desired position in future.

2) Provides path of action: Planning ensures that the goals or objectives are clearly stated. They act as a guide and they provide direction for doing the right things at the right time with right way. It helps employees to know what organization has to do and what they must do for achieving the goals.

3) Planning improves performance: It helps managers to improve future performances of employees by establishing objectives and selecting a course of action. It is beneficial for the organization. Planning leads to efficient working of the employees. Due to proper planning, the employees can work according to timely guidelines. This improvement in performances results into higher profitability of the organization.

4) Minimizes the risk: Planning is based on forecasting technique. It is the process of looking into the future and anticipating the future changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or risks cannot be eliminated totally but they can be anticipated and can be tackled with preventive measures. It minimizes the risk of future or uncertainties of future.

5) Planning leads to optimum utilization of resources: Organizational plans are prepared by taking into consideration the availability of resources and proper allocation of resources for various activities. It also facilitates optimum utilization of resources which brings higher efficiency and better results. One can avoid wastage of resources by proper planning.

6) Helps in decision making: There are various alternatives in front of the management. For achieving goals planning helps the management to select the best alternative by considering all positive and negative outcomes of all the alternatives. Decisions are taken after selecting alternative courses of action to achieve a predefined goal. It helps the manager to take rational decisions.

7) Useful in setting the standards for controlling: Planning set out standards for controlling. So, the actual performance can be compared with the standards and managers can find out the deviation, if any between the actual and the standard performance. Such deviation can be bridged by taking controlling steps. Therefore, planning provides basis for control. It is also important for maintaining discipline at working place of organization.

8) Facilitates Coordination of all activities: Planning facilitates the coordination of activities. It reduces overlapping among activities. All activities of business organization are closely linked with each other which is considered in the process of planning. Sound planning inter-relates all the activities and resources of an organization. Thus, various departments work as per the overall plan and coordination is achieved.

9) Facilitates other management functions: Every organisation functions towards achieving goal and goal is set at the planning stage. Unless the plan is ready, other management functions such as organizing, staffing etc. cannot be undertaken thus, planning facilitates all other functions of management.

10) Promotes innovative ideas: Planning is the basic function of management. It is a process of decision making which involves promotion of innovative ideas after critical thinking. Ultimately, these innovative plans result into attainment of the goals of the organization. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the organization.

In short, planning plays vital role in every walk of life of an organization as well as of an individual. Future is highly uncertain and the business environment is changing. With the help of proper planning, the risks and uncertainties can be minimized definitely. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Teacher's Note

When you plan your studies before an exam, you decide what to study, when to study, and how to study. This is planning. Good planning helps you get good marks.

Exam Trick

Remember: Planning = Deciding in advance. Think of it like a movie plan - director plans the scene before shooting. Your teacher plans the lesson before teaching.

Points to Remember

Planning means deciding what to do in the future.
Planning helps set clear goals and targets.
Planning reduces risks and uncertainty.
Planning helps use resources in the best way.
Planning is the first function of management.

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