Scope of Management functions and relationship with the controlling

What is management and definition of management scope?

Management is a term variously defined by different authors. For this reason, below we first present some of its definition to be able to export them from links.

Thus, Donnelly, Gibson and Ivancevich Management define it as, “the process as it is made by one or more persons, and consists in coordinating the activities of other persons in order to achieve the results that one person could not achieve alone.”(1)

Weihrich and Koontz, in addition, define it as, “the process of shaping and maintaining an environment in which individuals, working together in groups, efficiently achieve desired outcomes.”(2)

James A. O’Brien Management function describes as a leadership process that involves managerial functions of planning, organizing, directing, and controlling. In doing so, managers plan organizational activities, organize the staff and activities, direct and control their own management activities by using feedback loops. Feedback has a duty to point out the discrepancies and to direct towards the implementation of necessary modifications in order to achieve business goals (3). Also the definition of management can be quoted with definition in the lexicon of Economics, where was stated “activity aimed at achieving specific, pre-set goals, but with the efforts of other people. Management is the process of guiding the behavior of others toward the execution of a task. It combines the factors of production to achieve certain goals and deals with “overcoming complexity”. Basic functions of management scope are: planning, organizing, setting up staff, leadership, and control.“(4)

Looking at these definitions as the basic scope of management functions (and others not listed here), it can be noticed that all emphasize that the scope of management is a process in which individuals are joining forces with the aim of achieving a more efficient target. This goal can be expressed quantitatively (profit contribution of cover, income) and qualitatively (environmentally friendly production, high product quality, employee care, good post-sales service of products). In general, these goals are overlapping, so a high-quality product delivers a positive image of a business entity, and that indirectly brings higher profits due to higher sales. To accomplish the desired goals, that persons (hereinafter to be called managers) are responsible for managing and performing certain functions, as already stated in the definition of the lexicon of Economics.

How to boost effectiveness of Management Functions with new design of Decision Support Systems? Find out, Download PDFs! It’s downloaded > 2.650 times!

______________

(1) Donnelly, Gibson, Ivancevich: Fundamentals of Management; BPI Iorwing, Boston, USA, Seventh Edition, 1990, page. 7. Quote from Avelini Holjevac I.: Kontroling upravljanje poslovnim rezultatom; Hotelijerski fakultet Opatija, 1998. page.1.

(2) Weihrich H. i Koontz H.: Management; 10th edition, Publisher MATE Zagreb, 1994, page.4

(3) O’Brien James.A.:Management information system, a managerial end user perspective; 2nd edition, Richard D Irwing, INC, 1993. page.338.

(4) Baletić, Z.: Ekonomski leksikon; Leksikografski zavod Miroslav Krleža Zagreb i Masmedia, Zagreb, 1995., page. 511.

List of Management functions

Briefly, there are five core functions that constitute Scope of Management functions: Planning, Organizing, Staffing, Leadership and Controlling.

Scope of Management

1. Planning

The first management function in scope of management functions that managers must perform is PLANNING. This function plan is created to accomplish the mission and vision of the business entity. Under the mission is considered the reason for the establishment, while under the vision is considered where a business entity is aiming. The plan must define the time component and plan necessary resources to fulfill the plan. Here can also be shaped goal / s that are to be achieved and strategy to be used at the same time. Accordingly, a plan of organization is developed together with required personnel; the method of leading people is defined and controlling instruments for monitoring the realization of plans. The guiding idea in the making of mentioned items is the realization of the objectives and fulfilling the mission and vision of the business entity.

As is evident from the previous paragraph, each organization should make a good first step, a good plan because without it, the organization takes a great risk of mistakes and thus compromises their business.

2. Organizing

Organizing is the second function manager. Where he had previously prepared a plan, he now establishes an appropriate organizational structure in the business organization. In part, it determines the ranges of management, type of organizational structure, authority in the organization, types and ways of delegating and developing lines of communication. The organization and its subsystems are placed under the plan, which was created as part of the functions, i.e. planning. In performing construction and organization, in particular, one must pay attention to formal and informal lines of communication because if these lines are not adequately monitored, the possibility of collision between them will result in delays and / or even failure to achieve the goal.

3. Staffing

Staffing, as the next function of management, consists of a selection of appropriate staff for the organization to reach a goal / goals easier and more efficient. According to today’s experience is well known that it is difficult to financially evaluate, quality and efficient staff. Staff is one of the more valuable, if not the most valuable resource in any successful organization. For this reason, good planning of personnel policies, as a function of management, and corresponding execution of that selection of high quality people is becoming increasingly important. The task of this management function is to set rules related to employment and personnel policies. Within rules following items are determined:

• policy of employment (whether the target organization’s development of own staff to develop within the organization or the staff mostly taken from other organizations),
• required expertise and theoretical knowledge to perform certain tasks (identification of necessary skills),
• the policy of promotion ,
• assessment of employees,
• training of staff,
• conflict resolution,
• and other settings of personnel policies.

4. Leadership

Leadership as the penultimate function is the cornerstone of management. As part of this function methods are determined of encouraging people (staff) to achieve their common goal / s of a business entity. Entity (unit, division, department and etc.) on its head must have the person who is ready to lead and to transfer to assistants and colleagues own enthusiasm for the goal / goals. Briefly, this means to motivate them.         Otherwise there is a great opportunity and incentive to report a jump ball in the final achievement of results which lead to a miscarriage of goals. There are many motivation theories, among them Maslow’s famous hierarchy of needs and the Herzberg Two-Factor Theory. All of them aim to try to explain a way of encouraging staff to perform tasks more efficiently, and to find factors that will give personnel satisfaction, to motivate them. To perform this function, managers are often additionally educated in the field of psychology because the motivation and motivators are very complex issue. The reason for this is the individuality of each person, and therefore a combination of motivators for everyone else affected.

For example, certain individuals may be motivated by the possibility of promotion (which is closely related to personnel functions), while others may be motivated by a pleasant business environment (organizational function) and / or better bonuses (including organizational function).

For defining leadership also should be stressed that there are different ways (styles) of leadership that are still classified versatile by different authors. So, if we look at the styles of authority there are three basic types: autocratic style of leadership, democratic or participative style and laissez faire.

Read more in Scope of Management – Part2, Scope of Management Part3  and Controlling and Management.