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Group 1: Samantha Belanger, Adam LeBlanc, Nedzad Malagic, Jeffrey Nason
Donna Raymond
OL-215 Strategic Management
June 20, 2006
The Four Functions of Management
Planning
Organizing
Controlling
Leading
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INTRODUCTION
Successful management requires dedication to following a process. This is known as the
management process, and it consists of four management functions; planning, organizing,
controlling, and leading. Planning is a process of determining what your goals are and how they
will be achieved. Organizing is a process of delegating the tasks to the appropriate resources in
order to accomplish your goals. Controlling refers to the monitoring of the work being done to
determine whether changes or corrections need to be made. Leading is the art of inspiring and
motivating people to work their hardest to achieve the company’s goals. Each of these
management functions will be examined in more depth in the following sections.
PLANNING
Planning is one of four management functions and it could be defined in many ways.
First, planning is defined as setting goals for future organizational performance and deciding on
the task and resources needed to be used in order to attain the said goals. To meet the goals,
managers should invest significant resources for training and incentives to motivate employees.
Other definition says that planning is coping with uncertainty by formulating future courses of
action to achieve specified results (Kinicki, Williams 140).
Planning is an important managerial function, even though it has few disadvantages, it takes time
to prepare a plan. Sometimes you might be forced to make a quick decision based on a plan that
is not perfect. Planning helps you to check your progress. It helps to coordinate your activities,
think ahead, and cope with uncertainty. A lack of planning or poor planning can hurt an
organization’s performance (Kinicki, Williams 141).
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Planning increases the likely success of any business venture because it helps to focus
owners/managers’ attention on longer-term business goals and direction, identify areas of
internal strengths and weaknesses, identify possible threats and constraints on the business,
identify and objectively assess business opportunities, pinpoint needs and resources you might
otherwise overlook, and discover waste in the use of assets and resources. Also, planning helps
you to benchmark your business performance against others of your size, secure appropriate
funding tounderpin growth, and define possible contingency plans to address foreseeable
problems ("Importance of Business Planning").
The planning process starts with a couple of attributes: a vision statement and mission
statement. A vision statement describes in graphic terms where the goal-setters want to see
themselves in the future. A mission statement is its purpose or reason for being. Powerful vision
statements are very important for an organization to succeed in today’s world. As process goes
on, we can distinguish different types of planning: strategic planning, tactical planning, and
operational planning.
All three kinds of planning lead to achieving a goal. As with planning, there are three
types of goals: strategic, tactical and operational. Goals that an organization wants to achieve
should be specific, measurable, attainable, results-oriented, and with target dates.
Goals can motivate in a few ways. Goals make you selectively perceptive. They focus
your attention on what is relevant and important and exclude other matters. In addition, goals are
especially effective if they are personally meaningful to you. Goals do not just direct your
thoughts, they also direct or regulate your actions. Goals increase your persistence; a goal that is
important to you will motivate you to persevere, to stay the course, to hang on when the going
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gets tough. Having important goals encourage you to develop strategies and action plans for
achieving those goals (Kinicki, Angelo, and R. Kreitner).
Every business has goals and every business needs a business plan, which is a summary
of how a business owner or manager intends to organize entrepreneurial endeavor and implement
activities necessary and sufficient for the venture to succeed. Business plans are used internally
for management and planning. They are also used to convince outsiders such as banks or venture
capitalists to invest money into a venture. Business plans are noted for often quickly becoming
out of date. One common belief within business circles is that the actual plan may have little
value, but what is more important is the process of planning, through which the manager gains a
greater understanding of the business and of the options available. Managing your business with
the assistance of a business plan is more likely to increase profitability and efficiency, as well as
contribute to the future development of the business ("Business Plan").
Next to business planning, also significant, is strategic planning. Strategic planning
consists of the process of developing strategies to reach a defined objective. Strategic planning
tries to create more desirable future results by influencing the outside world or adapting current
programs and actions to have more outcomes that are favorable in the external environment.
Strategic plans typically look five or more years into the future. They differ in this respect from
tactical plans, which look two to four years into the future; and from operational plans [such as
budgets], which have an annual scope ("Strategic Planning").
“Good plans shape good decisions. That is why good planning helps to make elusive
dreams come true,” said Lester R. Bittle in his book “The Nine Master Keys of Management”.
Planning is a necessary action in today’s world. If more business did some form of planning, the
80% failure rate of business in the first five years would be reduced. A study mentioned in
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"Business Plans for Dummies" by Paul Tiffany states that companies with just the strategic
section of a business plan have 50% more profits and revenue than non-planning businesses
(Tiffany, Paul, Steven D. Peterson, and John B. Schulze).
ORGANIZING
The second function of management is organizing. “Organization is not an option, it is a
fundamental survival skill and distinct competitive advantage” says Pam Woods, who is the
president and founder of Smart Worklife Solutions. Woods has created a very successful
business on the fact that many people have a lack of organizational skills. Woods has a list of
ten things to help her clients on the way to an organized life. These are a few of the tips:
1. Design processes to manage paper flow.
The theory is to create a system in which paperwork is only touched once. Paperwork is a daily
necessity that creates more and more work. With a system in place to handle paperwork once, a
file can always be found quickly saving time and money.
2. Know how long to keep important papers.
Many times space and time can be saved by throwing away paperwork that is no longer
necessary.
3. Use a calendar.
A calendar can be used to keep track of appointments but specifically the times of the
appointments to make sure they are met on time.
4. Organize everything in your life.
A personal life that is in order will help to keep a smooth running stress free work life.
5. Adjust your organizing system for new and changing circumstances.
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Everybody experiences changes everyday so the organizational system must be flexible enough
to change in any way necessary.
These tips are key for any CEO or president that has mounds of paperwork to keep track
of. A calendar will help to keep track of your appointments easily. An organized desk helps the
worker think easier and work smarter.
The Professional Organizers Web Ring has a checklist that they use to help get their clients in
order. They are; declutter, systemize, coordinate, and categorize.
The above companies will come to your place of work and get you working smoothly and
with efficiency. However, if a CEO knows the rules that they go by, then he has a head start in
getting his office running smoothly. The key to all of these tips, is that once they have been
instituted the smart CEO will keep the system going. These processes will get paperwork sorted
out, but there will be chaos soon after if the habits are not formed and kept up.
LEADING
The third function of management is leading. According to Dictionary.com, two of the
definitions for leading includes: 1) to show the way by going in advance, and 2) to guide or
direct in a course. (Dictionary.com) Successful leaders know how to show the way and also
when to guide the direction of movement. Leaders deal with overwhelming situations all the
time, but don’t get overwhelmed themselves. Whether the situation deals with other employees
or customers, the competent leader continually develops leadership skills and influences his way
to correct any problems.
Successful leading is not rocket science. Often times we are placed in charge of groups
or teams that need additional guidance in accomplishing the mission at hand. Using highly
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trained communication skills, the leader’s goal is to create a cohesive team that performs the
functions or tasks required in an efficient manner. How does one accomplish this?
First, you must learn about your companies’ mission and vision statements so you can
ensure the direction you take leading is in alignment with what is expected. Second, you must
learn to manage individual behaviors. These behaviors can range from but are not limited to:
Values, attitudes, and stress behaviors. Next up, a leader must properly motivate his group or
team. Motivation may appear in many different forms. Some of the more popular forms
include: monetary or non- monetary compensation. Others motivational factors are through
specific jobs matched to the appropriate people, and goal setting (challenging but achievable).
Additionally, a successful leader must display decisive decision making power and influence. In
addition to the aforementioned qualities, the leader will convey to the group or team that he is
there not only for the mission but for them as well and take the blame if things don’t go as
planned.
Lastly, communication skills are a must; as any workforce is diverse. Knowing what
barriers of communication exist then mastering how to defeat them will help eliminate any gray
areas there are in understanding tasking. Communication is not just putting your voice out to the
troops. It is also about becoming an effective listener, reader, writer, and speaker.
There is an importance of defining your leadership style. There are seven different
effective leadership styles that are recognized by many. “Each of the seven segments represents
a specific style of leadership. One of them will be yours. It is the style that comes naturally to
you, and within which you are comfortable and competent. It tends to express how you feel
about expediting tasks, the manner in which you relate to those whom you lead and collaborate
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with and the type of leader that others perceive you to be.”
(http://www.refresher.com/!knbstyle.html)
There is no right or wrong style of leadership to follow. We all will have a natural
tendency to use the style we are most comfortable with, which might not be the best approach;
the key is to be aware of the other styles and know when to use them to be assured the best
chances of success.
Leading as a management function is a complicated but necessary process in today’s
successful business world. Effective leaders motivate, direct, and influence people to work
successfully towards all organizational goals. Successful leaders understand the barriers to
communications and how to defeat them while using the many different styles of leadership for
whatever situation arises!
CONTROLLING
The last management function is controlling. Controlling is monitoring performance,
comparing it with goals, and taking corrective action as needed. The controlling function usually
comes after planning and organizing. This is to ensure that the desired results are attained.
Managers who succeed in controlling their area will become proficient in the following areas;
analyzing reasons for unacceptable changes in performance, evaluating alternative actions, and
choosing and implementing change. (Anderson 1) This section will describe six reasons why
control is needed, four steps in the control process and the three types of control. (Kinicki 522)
There are six reasons why control is needed in the management process.
Adapt to change and uncertainty.
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The environment is constantly changing and it is important that managers stay up to date and
deal with changes and uncertainties. For example, the technology world is constantly being
upgraded. Managers in the world today need to make sure they are up to date with these
upgrades. (Kinicki 522)
Discover irregularities and errors
Small mistakes can snowball into bigger mistakes and could cause major problems for the
company. For example, if someone is entering orders into a sales database and they are off by
$1.00 or so it may not seem like a huge problem if you are only looking at one order. However,
if the same mistake is constantly being made on a lot of orders, the company could end up losing
a lot of money. (Kinicki 523)
Reduce costs, increase productivity or add value
Control systems can eliminate waste, reduce labor costs, increase output and add value to your
products. Having continuing quality insurance is a preventive method. (Kinicki 523)
Detect opportunities
A control system can help managers detect opportunities that could go unnoticed. An example
of this would be a store marking down a particular item. If this results in an increase in customer
demand then management should look to see of other price changes might increase demand for
similar products. (Kinicki 523)
Deal with complexity
As companies become larger they may branch off into other product lines or markets or open
facilities in other countries. Managers will need to organize and coordinate all of these new
complex elements. (Kinicki 523)
Decentralize decision making and facilitate teamwork
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Top management should try to push decision making at the lower levels of the company and
encourage teamwork. (Kinicki 523)
Control systems generally fall into four control process steps. The first one is to establish
standards. A control standard is the desired performance level for a given goal.
The next step is to measure performance. You want to be able to measure the actual
outcome. Managers can acquire performance measures by three main sources; written reports,
oral reports, and personal observations.
The third step is to compare performance to standards. Managers need to distinguish if
the desired outcomes compare to the actual outcome.
The last step of the control process is to take corrective action, if necessary. Managers
need to decide of changes need to be made in order to obtain a desirable outcome. The text
explains three possibilities for this. A) Make no changes B) Recognize and reinforce positive
performance. For example, bonuses, raises or even a verbal “good job”. C) Take action to
correct negative performance such as retraining. (Kinicki 525)
There are three types of control that managers use; feed forward, concurrent, and
feedback. These types of control vary according to timing. They are time oriented for future,
present, and past.
Feed forward control is a future-directed control that takes place before operations began.
It is also intended to prevent anticipated problems. An example of this would be a fire drill.
(Kinicki 527)
Concurrent control is for the present. It takes place when operations are in progress and
is also intended to minimize problems when they occur. An example of this would be a low
battery warning. (Kinicki 527)
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Feedback control is control for the past. This control takes place after the operations are
complete. It is intended to correct problems that have already happened. An example of this is
when you need to re-train an employee. (Kinicki 527)
CONCLUSION
It is every business leaders desire to have a successful business. Some have what it takes
and others simply follow the guidelines of a more successful business leader. However, in every
business plan that is a success, you will find examples of the four areas that have been
mentioned. When you consider each of the four areas, they connect to each other to form a
natural business plan. A good business starts in the planning stage. Once the plans have been
set, the organizing of the business takes over. Once the business has been started, controlling of
the business begins. These are followed up by the leadership area to ensure that the business is
running smoothly and profitably. As Stephen Covey said, “Management is efficiency in
climbing the ladder of success; leadership determines whether the ladder is leaning against the
right wall."
WORKS CITED
Anderson, Peggy, and Marcia Pulich. “Managerial Competencies Necessary in Today’s
Dynamic Health Care Environment. The Health Care Manager (2002): 1-11.
Buist, Ken, Does Your Leadership Have Style?, http://www.refresher.com/!knbstyle.html
"Business Plan". Wikipedia. Electronically retrieved May 15, 2006 from
http://en.wikipedia.org/wiki/Business_plan
Covey R. Stephen. “Leading Thoughts. . .Building a Community of Leaders”.
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Electronically retrieved from http://www.leadershipnow.com/managementquotes.html.
Dictionary.com, http://dictionary.reference.com/search?q=leading
"Importance of Business Planning". Australian Industry Group. Electronically retrieved
May 15, 2006 from
http://www.aigroup.asn.au/scripts/cgiip.exe/WService=aigroup/ccms.r?pageid=86
Kinicki, Angelo, and R. Kreitner. Organizational Behavior: Key Concepts, Skills and
Best Practices. (2nd Ed.) Boston: McGraw-Hill/Irwin, 2006.
Kinicki, Angelo, and Brian K. Williams. Management- a Practical Introduction. New
York, NY: McGraw-Hill/Irwin, 2006.
Organizers Web Ring. 2006. Professional Organizers Web Ring. June 5, 2006.
http://www.organizerswebring.com
"Strategic Planning". Wikipedia. Electronically retrieved May 15, 2006 from
http://en.wikipedia.org/wiki/Strategic_planning
Tiffany, Paul, Steven D. Peterson, and John B. Schulze. Business Plans for Dummies.
(2nd Ed.) John Wiley & Sons Inc, 2004.
Woods, Pam N. “Smart Work Life Solutions.” Worklifecoach.com. Pam Woods, 2004.
June 6, 2006. http://www.worklifecoach.com/case.htm