As you already know, management will always be an important mission whether you are a startup entrepreneur or business owner of an existing business, a small, medium, or big company, or the industry where your organization operates. You must manage if you work with people and through organized people. So, the question is, what are the management functions?

Understanding Management

What is the role of the managers?

Simply said, the role of managers is to achieve desired results with the help of people and available organizational resources. Because management is considered a universal category because it uses resources to achieve goals and maintain high performance, we can say that the definition of management can be:

Achieving organizational goals in the most effective and efficient way, through planning, organizing, leadership, and controlling of organizational resources.

In the simplest words, we can say that management is the coordination and administration of employees or team members to achieve a goal.

Effective managers must possess managerial skills, including planning, communication, organization, and leadership skills.

The Four Functions of Management

Since Henri Fayol, together with Frederick Taylor, founded scientific management, there has been no generally accepted view on what management functions.

For example, Fayol considered forecasting (planning), organizing, commanding, coordinating, and controlling as managerial functions.

In the research that I have consulted more than 100 literature sources, I’ve found that the most frequently used managerial functions are planning, organizing, and controlling. But, then there are many different functions from different authors depending on their own specific view of the functions.

For example, the research finds that directing, coordinating, communicating, and motivating are also present, but they are part of leadership or leading. I found the function evaluation in several sources, but again, it is part of controlling functions.

The conclusion from this research is that there are four functions of management:

• planning,
• organizing,
• controlling, and
• leading.

Planning Function

Planning, the first of the four functions of management, is an introduction to the selection of intentions and goals and also the first activity for the successful implementation of management. The many elements that go into plans must be carefully selected before they are considered. They are made for different intervals. Simply, the plan is a means of action and a way to achieve the goal. If the planning is effective, its realization can be expected.

Effective planning involves considering various factors, such as market conditions, internal capabilities, and available resources, setting objectives, creating a plan with action steps to reach those goals, and identifying business challenges.

Planning is a collaborative process that involves all levels of management collecting information, analyzing data, and making informed decisions based on their specific scope of authority.

With the planning function, managers simply prepare conditions for the company’s future operations. Better planning leads to better living and working conditions, and taking action without a plan is a mistake.

Three Types of Planning

Plans are made for different time intervals. Long-term planning depends on where the manager is in the organizational structure (top, middle, or first-line). The higher the manager is in the structure, the higher the scope of the plans will be. Generally, the planning function can be realized by management with:

• Strategic planning (long-term and focused on the planning phase regarding the future direction of the whole company),
• Tactical planning (more medium-term and focused on a specific function or department in the organization) and
• Operational planning (short-term plan focused on planning everyday operations of different organizational functions and departments).

Strategic planning

The output of the strategic planning phase will be a long-term strategic plan covering a longer period in the future, depending on the company’s industry and the actual and potential factors that may affect its operation.

For example, strategic plans for a fast-growing industry (such as the IT industry) would cover several years, while those for a slow-growing industry would be five to ten years or more.

In most cases, strategic plans are based on the strategic objectives to which the company should strive and on the management vision. For example, the company currently has a 20% market share, and it is planned that this share will increase to 25% in the next five years. Or, the company aims to increase profit by 7% in the next five years.

When creating a strategic plan, there are many unknown parameters, but this should not scare the management team creating the plan because they only need to put on “paper” what they plan to achieve and do.

In each organization, strategic planning is the role of the upper management levels.

Tactical planning

Tactical planning, on the other hand, is more focused on medium-term or short-term actions and decisions that will help the company achieve its strategic goals. This can include annual objectives set by middle management for each department, tasks, budget allocations, and resource allocation.

The main purpose of tactical planning is to ensure that the company’s resources are used efficiently and effectively to achieve the strategic objectives. It involves breaking down the larger strategic plan into smaller, more manageable steps that can be implemented in a shorter period of time.

Tactical planning also takes into account any changes or adjustments needed in response to current market conditions or unforeseen challenges with the strategic plan. Unlike strategic plans which cover a longer time frame, tactical plans are more flexible and can be adjusted as it is required by the internal and external conditions.

These plans are the responsibility of the middle management, or department managers, who must translate each company’s objectives from the strategy into their departmental objectives.

Operational planning

Operational planning is a crucial part of tactical plan that involves the allocation of resources, setting specific goals and timelines, and establishing key performance indicators (KPIs) to measure the success of the plan. This ensures that all team members are aware of their responsibilities and are working towards achieving the same objectives.

One important aspect of operational planning is budget allocation, or how much money will be allocated to each department or project, as well as tracking expenses and ensuring that they stay within the designated budgets.

Resource management is also a key component of tactical planning and involves identifying the resources required for each action step of the operational plan, whether human resources, technology, or materials and appropriate resource allocation.

Operational planning is the responsibility of the lower management or first-line manager, who must create weekly, monthly, or quarterly operational plans for their work unit that will help to achieve tactical goals.

Successful Planning with Project Management Tools

Today, we have so many different project management tools that can be used by managers regarding planning.

You can use tools like Asana, Jira, Basecamp, or any other tool on the market to set long-term vision and goals, create a plan to reach those goals, determine workload and capacity, enlist the help of project managers, and identify business challenges.

Organizing Function

During joint action, each person must know his role, which the managerial organizing function will enable.

So, organizing is the second of the four functions of management that simply regulates the role of each individual in the organization’s structure. It is an instrument of management, and in its structure must be defined all tasks that need to be performed according to employee’s abilities and motivations.

Also, the organizing function is a management function that must identify workforce needs, have insight into the available market, hire new employees and appropriate team members, select jobs, etc., in order to effectively achieve the company’s desired goals.

Organizational Structure

The first thing the organizing function must ensure is developing and structuring work to accomplish organizational goals. Proper organization is crucial not only for achieving the company’s goals but also for ensuring effective communication channels and allocating roles and responsibilities for each team member.

RACI Matrix for Effective Organizing

You can use a RACI Matrix Template to manage projects better and ensure everyone’s on the same page. This tool is great because it defines roles and core responsibilities, clarifies decision-making processes, and ensures accountability throughout the project. This can be especially useful in larger organizations where there are multiple teams working on different tasks.

A RACI Matrix comes from the acronym:

• Responsible,
• Accountable,
• Consulted, and
• Informed.

This matrix helps to define each team member’s role in a project clearly. The responsible person is the one accountable for completing the task or making decisions. The accountable person is responsible for the overall success of the project. The consulted individuals provide input and expertise on specific tasks, while the informed individuals are kept up-to-date on progress and decisions.

Using a RACI Matrix can help prevent confusion or overlap of responsibilities within a team and can be a central hub for managing projects, ensuring each team member has a clear direction.

Leading Function

The leading function is the third of four functions of management with the main aim to influence the contribution of people in the organization and has a dominant role; more precisely, it is reflected in many areas of management.

Any manager will agree that the biggest problems come from people, their desires, demands, and behavior as individuals or groups. So, management is an effective means of motivating subordinates, choosing an effective channel for communication, and resolving conflicts in managerial actions.

Characteristics of a Successful Manager

Successful managers are effective leaders who possess qualities such as a growth mindset, cooperation, and empathy. So, this function involves guiding and motivating a team toward a common goal.

You can read more about common traits of effective leaders here.

Situational leadership styles

Different leadership styles include different ways of directing, coaching, supporting, and delegating, and successful managers must adapt their own style to different challenging situations.

Directing is a situational leadership style that involves the manager giving clear instructions and closely monitoring performance. This approach is best suited for situations where employees are new to their roles or tasks or when a task requires specific guidance.

Coaching is also a situational style that provides support and guidance while allowing employees to make decisions and take ownership of their work. This style effectively develops employee skills and encourages autonomy inside the organization.

Supporting is a leadership style that focuses on providing emotional support and building trust within a team. This approach is beneficial when dealing with interpersonal issues or during change, as it helps foster positive relationships among team members.

Delegating, on the other hand, is assigning tasks and responsibilities to team members and make them responsible to complete delegated tasks independently. This style allows employees to develop their skills and take ownership of their work while also freeing up time for the leader to focus on other important tasks.

Transformational styles

Effective leadership will also include supporting team members, encouraging innovation, and resolving any conflicts that arise while performing the work for the organization according to the plans.

Another leadership style that will help management to achieve this is transformational. This style involves inspiring and motivating employees through a common vision and goals. This style is effective in driving innovation and change within an organization and creating a strong sense of purpose among employees.

For example, servant leadership is a more recent approach that prioritizes the needs of others before the leader’s own. Leaders who follow this style prioritize supporting and serving their team members rather than seeking recognition or power.

Controlling Function

The controlling function is the third of the four functions of management.

This function creates measures and activities that should ensure the realization of the plan. Group and planning activities are carried out to see where some deviations have occurred and what can be done to correct them. The controlling function is the main instrument for evaluating the success in the realization of the plans.

To ensure that company goals in plans are met, controlling involves monitoring progress toward goal achievement and taking corrective action always when it is necessary based on deviation between expected outcome and achieved outcome.

Common steps in the controlling process include:

1. establishing performance metrics,
2. monitoring progress, and
3. taking corrective action.

This function is not only about control of employees, which employees can often see as a form of punishment. In many cases, they are right because I have seen many managers use their managerial power and control to punish employees whom they don’t like. However, effective controlling goes beyond one strong control because it involves identifying areas of improvement, celebrating successes, and ensuring that key strategic goals are met.

Effective Management in Practice

How the Four Functions of Management Work Together

The four functions of management don’t operate in isolation but are interrelated and mutually dependent. All these functions alone would have no effect without their mutual coordination. Good coordination allows each individual to make a maximum contribution to the achievement of the goals of a company with their work.

For example, effective leadership depends on a well-organized team, while, on the other side effective organization depends on a clear plan. Also, effective control measures will rely on clear leadership and direction.

Improvement of Management Skills

Pursuing formal education, such as an MBA, can equip aspiring managers with a clear understanding of what is needed to manage today’s business environment and achieve organizational goals.

Formal education allows you to learn various management disciplines, including strategic planning, organizational behavior, and leadership. If you also want to improve your management skills, check these 11 top management training programs.