Functions of management: planning to controlling
Management functions run as a cycle: plan, organise, staff, direct, control, with coordination as the essence that binds them all.
The management cycle
- back to Planning
Fayol's list was planning, organising, commanding, coordinating, controlling. Koontz and O'Donnell made staffing a separate function.
The planning process (Koontz and Weihrich)
- 1Be aware of opportunitiesscan the market, competition and own strengths
- 2Set objectiveswhat is to be achieved, and by when
- 3★Develop planning premisesassumptions about the future environment
- 4Identify alternative courses of action
- 5Evaluate the alternatives
- 6★Select the best alternativethe point of decision
- 7Formulate derivative (supporting) plans
- 8Quantify the plans as budgets
★ one-way, controls the pace
Koontz's types of plans
| Plan | Meaning | Example |
|---|---|---|
| Mission or purpose | The basic reason the firm exists | Make quality healthcare affordable |
| Objectives | End points that all activity aims at | Raise market share to 20% in three years |
| Strategy | Broad plan to reach objectives, given competition | Enter rural markets with small packs |
| Policy | General guide to thinking; leaves room for discretion | Promote from within wherever possible |
| Procedure | Chronological sequence of steps for a task | Steps for processing a purchase order |
| Rule | Specific action required or forbidden; no discretion | No smoking on the shop floor |
| Programme | Package of goals, steps and resources for a one-off aim | Plan to set up a new plant |
| Budget | A plan expressed in numbers | Sales budget of ₹50 crore for the year |
Staffing, directing, coordinating and controlling
| Function | What it covers | Key point for NET |
|---|---|---|
| Staffing | Manpower planning, recruitment, selection, placement, training, appraisal, pay | A separate function for Koontz and O'Donnell; not one of Fayol's five |
| Directing | Supervision, motivation, leadership, communication | Fayol called it 'commanding' |
| Coordinating | Integrating the efforts of units towards common goals | Follett's four principles: direct contact, early stages, reciprocal relations, continuity |
| Controlling | Setting standards, measuring, comparing, correcting | Feedforward (before), concurrent (during), feedback (after) |
Control tools and MBO
- Control process: set standards → measure actual performance → compare with standards → correct deviations.
- Management by exception: only significant deviations reach the manager; the idea is traced to Taylor.
- Traditional tools: budgetary control, break-even analysis, statistical data, personal observation.
- Modern tools: ratio analysis, PERT/CPM, management audit, responsibility accounting, MIS.
- MBO (Drucker, 1954): superior and subordinate set goals jointly, review progress regularly and appraise performance against the goals.
- Standing plans (policies, procedures, rules) are used again and again; single-use plans (programmes, projects) serve one purpose.
NET asks you to sequence the planning or control process, expand POSDCORB, match plan types (policy, procedure, rule, budget), and recall who gave MBO and the principles of coordination.
Typical MCQ: “Is staffing one of Fayol's five elements of management?” No. Fayol listed planning, organising, commanding, coordinating and controlling. Gulick and Koontz added staffing. Trap: assuming every list of functions is the same.
Typical MCQ: “Which type of plan allows no discretion at all?” A rule: it states exactly what must or must not be done. Trap: a policy guides thinking but leaves room for judgement.
POSDCORB: 'Please Organise Staff, Direct, COordinate, Report, Budget'. Planning looks ahead and control looks back: they are Siamese twins.